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City staff proposes switching to pay-in-arrears payroll; transition to be funded from reserves
Summary
Finance staff said moving the city's payroll from pay-in-advance to pay-in-arrears (likely a 5–8 day lag) would align Hampton with peer localities and reduce inefficiencies; staff said the transition week would be funded from fund balance and employees would be held harmless.
Finance Director Carl Daughtry recommended changing the city's payroll to pay in arrears to improve efficiency and match common local practice. "So we plan to implement pay in arrears for payroll processing," Daughtry said, noting local peers such as Newport News and Virginia Beach already use arrears, and the city is one of the last localities still on pay-in-current.
Daughtry described transition mechanics: staff would select a start date, fund the transition week from fund balance so employees are not disadvantaged, and set an arrears window likely between five and eight days depending on processing time. He said the aim is to implement the change before the new payroll system goes live in January 2024 and that details such as overtime calculations for public safety will be analyzed to prevent pay impacts.
