Teacher pay debacle isn’t over — and it’s worse than you think

Last week, the San Francisco Unified School District’s main office was besieged: Bleary-eyed teachers, equipped with bedrolls and sleeping bags, hunkered down at 555 Franklin St. For three days, they camped out, protesting the botched rollout of a costly payroll processing system that has induced chaos by underpaying or mispaying hundreds, if not thousands, of teachers. 

The district has big problems, and the revelation that it was stiffing its workforce, which Mission Local broke on March 9, is just the latest in what feels like a concatenation of debacles. Among so many other problems, the district is short-changing teachers while it is, itself, short-changed; the newly formed Board of Education is tasked with chipping away at a deficit that exceeds $125 million.   

Perhaps, inadvertently, the present morass could inspire a means of alleviating that shortfall. You could charge people to sleep at the district office. Call it SFUSDBnB. 

The spectacle of desperate, unpaid teachers sleeping on the office floor grabbed the headlines, as you’d expect. As did the spectacle of the $13.7 million (so far) EmPowerSF payroll system failing so totally and spectacularly. On Thursday the teachers lifted their three-day siege after their union and the district hammered out a deal; SFUSD pledges to make educators whole, with interest, and fix future problems in a timely fashion. 

But light paychecks are just the tip of the iceberg here. The errors EmPowerSF has made — underpaying, overpaying, deducting money for retirement plans but not putting that money into retirement plans, overdeducting, underdeducting, failing to pay for services that were then canceled — have been so haphazard, so random, and so broad, it feels as if the district’s mainframe was scrambled after being struck by lightning. 

No such luck. There’s probably insurance for that. This was not an “Act of God;” it took the San Francisco Unified School District to foul things up this royally. Because this situation is even worse than it has thus far been portrayed. 

Mission Local has talked to dozens of teachers in the past week. With taxes due on April 18, many were shocked to discover their withholdings were, without fanfare, reduced in 2021, making for an unpleasant tax-time surprise in 2022. The San Francisco Unified School District did not answer our questions about this. 

As a result of those reduced withholdings, teachers accustomed to, and anticipating, a healthy refund have instead found themselves owing a healthy amount to Uncle Sam. And this would’ve occurred even if the district hadn’t shifted to EmPowerSF in January, 2022. 

But it did. What’s more, to accommodate that January, 2022, launch, educators received a 13th paycheck in December, 2021, instead of the customary early-January check. Their union signed off on this move.

But this extra check also increased educators’ taxable income and, in some cases, bumped them and their families into higher tax brackets. 

“The SFUSD withholding problem and the 13th check, in concert, left us with a tax bill of over $9,000,” says Leyla Momeny, a special-education teacher at Lakeshore Elementary School.

“We paid it, but I keep thinking that this could have been avoided. With sufficient notice about the 13th check, for example, we would have taken steps to reduce our taxable income by increasing retirement deductions. Although, honestly, EmPowerSF would have likely messed that up, too.”

That feels like a safe bet. Ay, there’s the rub: For so many teachers, right when they’re being hit with unexpectedly high tax bills, EmPowerSF has kept them from receiving full and regular payments. 

But it’s done more than that. Its lightning-strike randomness is on par with ransomware purveyors’ finest. Deductions are made from paychecks, but not redistributed to retirement accounts; tax withholdings vary by a factor of 10 from month to month; teachers are paid at incorrect rates (or not paid at all); decades’ worth of accumulated sick days are improperly deleted; and, to top it off, workers complain that the erratic and untrustworthy system is clunkier, more time-consuming and more opaque than its antiquated predecessor. 

Lauren Stupek, an English, literature and drama teacher at Phillip and Sala Burton Academic High School, tells us EmPowerSF has neither deducted money for her retirement plan in 2022, nor sent any money to her retirement plan. “But I called my retirement people, and they say I haven’t contributed since October.” 

That predates EmPowerSF. And that’s extra concerning, because retirement deductions were taken from her paycheck  in October, November and December — and that money hasn’t yet landed in her retirement account. 

“Forty teachers on my Facebook group said this is a problem for them,” she said. “The coverage has been about how people aren’t getting their checks, but so many more issues are coming to light, and you’d never know. You have to go in there and check.” 

(The district says that retirement funds are being processed by a third-party administrator, and pledges that every employee will have their contributions deposited into their corresponding accounts.) 

“Anything you can think of going wrong with a paycheck is going wrong with our paychecks,” sums up veteran Burton economics teacher David Knight. “Plus things you never thought could go wrong with a paycheck.” 

Still, Infosys, the international information technology company that’s being paid to enact EmPowerSF, continues to get paid — and paid and paid. Its contract was upped from $9.5 million to $11.1 million last year, and then, only months later, upped again to $13.7 million.

“Infosys is meeting the terms of their contract,” the district tells us, “and being fully supportive to the SFUSD team.”

At least someone is happy. At least someone is getting paid on the regular.  

In the name of technical advancement, the district appears to have saddled itself with a less agile system. One of many examples of this is the 10 Covid-19 days teachers were allotted so they don’t burn an entire year’s worth of sick time to isolate. The district, however, was unable to expediently craft a “covid code” for the EmPowerSF system. 

So, Knight notes, after the January day during the Omicron surge when 14 teachers were out at Burton, the newfangled system wasn’t able to differentiate a covid day from a regular sick day. Teachers were, indeed, burning their year’s worth of sick days and were unable to claim the 10 covid days contractually owed to them.

Fixing this problem was one of the terms the teachers extracted from the district in their three-day sit-in. And that’s nice, but it shouldn’t have required a sit-in, and prompts deeper questions about the viability of the payroll system.  

The district has apologized for this painful and embarrassing fiasco. It has purportedly quadrupled payroll staff to deal with the problems. Teachers who’ve phoned the payroll department tell us they haven’t been told “I’m sorry,” but have been told the department will “take ownership” of the problem. 

But it warrants mentioning that the post-facto quadrupling of payroll staff was from five to 20 workers (in a district with nearly 10,000 employees). Teachers accuse the district of, in part, fomenting this crisis by understaffing in areas like payroll to pinch pennies, a move that has has turned out to be extravagantly counterproductive. 

And an apology won’t do much for teachers facing unanticipated tax burdens due to low withholdings or the 13th check. “That’s done with, and we owe the federal government the money,” sums up no-nonsense Washington High School counselor John Atchison.

But wait, there’s more. For some older teachers paying heavily into their 403(b) retirement fund, that 13th check caused them to over-contribute, resulting in a tax penalty, an onerous reshuffling of money, and jumping through hoops to ameliorate this situation, all on the eve of Tax Day. Some teachers, we’re told, were “kicked out” of their 403(b) plans for overpaying, and may not realize they must re-enroll. 

On the other end of the age spectrum, some younger teachers still paying off student loans were also tripped up by that 13th check. Since loan payment rates are calculated based on income, and since teachers’ 2021 income was artificially inflated by their receiving a check in late December instead of early January, their monthly payments just grew steeper. 

That’s rough. In reality, those teachers didn’t earn more, they just received the year’s final paycheck a couple days earlier than normal. And, naturally, with Tax Day coming and loan payments always on the horizon, EmPowerSF has made teachers’ cash flow that much more erratic and unreliable.  

Burton High’s David Knight is an economics teacher who has instructed more than a generation of students on “tax brackets … I teach them how progressive taxation really works.” 

It is a transferable skill. He is now left to grade the work of the district and, sadly, it’s not passing work. 

Knight has immersed himself in understanding the district’s next debacle, and that’s the forthcoming light July paycheck and “Deferred Net Pay.” 

Here’s what that’s all about: Most teachers don’t work in July. But many districts — and, starting only this year, San Francisco — use “Deferred Net Pay” to defer money from teachers’ 11 other paychecks to amalgamate into a July paycheck. 

There’s a complication, though: Contributions to workers’ retirement accounts are based on their incomes. So, slicing some money off for that July check with no offset would have the undesired consequence of reducing those contributions. 

Here’s the solution to that: You pay workers a little bit more, and then you defer an equal amount toward that July paycheck. It feels a bit like Daylight Saving Time; you’re making the blanket longer by cutting off one end and sewing it on the other, but it’s a system that works at many other districts. 

But it’s not going to work in San Francisco in 2022. That’s because, since EmPowerSF and Deferred Net Pay were only adopted in January, the July check will only have Deferred Net Pay siphoned from half a year, not a year. And, going over the actual monetary deduction, Knight (and others) have discovered that the district isn’t deducting enough. 

Over a full year’s paychecks, only enough money to make up half his monthly salary is being withheld. But, remember, there will only be six months of checks to pull from in 2022, meaning he anticipates receiving around one-quarter of his normal check. 

Well, that’s going to be a problem. The teachers’ contract unambiguously calls for 12 equal checks. “They can’t do that,” confirms Nathalie Hrizi of the United Educators. “This is a violation of our contract. They did not bargain that with us.” 

How could this happen? Knight sighs. He’s been a teacher in this district for 24 years. He’s not surprised. 

“They are taking out half of what they should, and they’re doing it for half the time,” he says. 

The additional, offsetting money the district is putting into his check, multiplied by six months, equals his monthly salary; “they are doing that part right.” The district, then, should be taking out an equal amount as Deferred Net Pay: “It’s that easy.” 

But that’s not happening. The district is deferring a fraction of the money it should, which is nice at the moment, but will lead to educators being shocked by their low July paychecks. 

Again, how could this happen? The veteran econ teacher did the math. And he thinks he’s found the culprit. The purpose of Deferred Net Pay is that 12 months pay is disseminated over 11 checks, with the deferred amount from each check funding a 12th check. That requires multiplying a teacher’s monthly pay by 1.09, which is 12/11. 

“Instead,” Knight says, “the district made the classic mistake of inverting the fraction. They’re multiplying by 11/12.” 

And that’s why his projected July, 2023, check is only 91.7 percent of what it should be. Eleven divided by 12 equals 0.917. You could look it up. 

If only the district officials at 555 Franklin had had a teacher to check their work. If they had, perhaps the  place wouldn’t have recently found itself stuffed with teachers for all hours of the day. 

What a pity that SFUSDBnB didn’t exist earlier. It could have saved everyone so much trouble.