Deferred Pay as a Payroll Option for Academic Year Faculty

• Full-time faculty on Academic Year contracts can opt in to deferred pay beginning Spring 2025. Pay will be deferred for the 2025-26 AY contracts. Once deferred pay is selected, there is no need to opt in again. However, these faculty may also elect to return to standard pay in future years.
• Must start the Academic Year on deferred pay; faculty who begin mid-year must wait to join deferred pay until the following year.
• Faculty must have a 1.0 FTE appointment for the entire academic year.

Faculty members who were on the deferred pay system prior to 2017 are currently on the legacy deferred pay system. To offer deferred pay to all academic year faculty, the payroll and work periods need to be aligned.

Salary for the 2025-26 contract will remain unchanged; however, faculty will not receive four paychecks in late Summer 2025 as they would under the legacy deferred pay system. They will receive the July 3, 2025, paycheck plus a $1400 stipend to offset the cost of benefits, then they will have an eight-week gap until pay begins for Fall 2025 under the new pay schedule. They will not receive a paycheck for the following dates:

• July 18, 2025
• Aug. 1, 2025
• Aug. 15, 2025
• Aug. 29, 2025

Paychecks will resume on Sept. 12, 2025. This will be the first paycheck of the 2025-26 appointment.

Payments for benefits must continue during the payroll disruption and, during this time, U of I’s third-party benefits administrator will bill faculty on the old system directly for each of the four pay periods for the cost of their benefits. To ensure that employees can cover their core benefits, each person on the old deferred pay system will receive a $1400 stipend on July 3, 2025 — as part of their paycheck. The $1400 stipend will lessen the impact of the necessary contributions toward benefits. The benefits coverage during this period will not be affected as long as you make the payments during the transition period.

This stipend is taxable. The supplemental stipend may not cover the full cost of the benefits depending upon voluntary elections; the stipend is intended to help lessen the financial burden during the transition period. To make changes to benefits, such as HSA contributions, please contact benefits@uidaho.edu to determine if changes are allowed by plan rules and IRS regulations. Review deductions to ensure all payments are made during this transition period.

To estimate your benefits expenses during the Summer 2025 transition, do the following:

• Log on to MyUI.
• Select the Employee Resources card.
• Click on the myBenefits tab.
• Select the “View all” link on the bottom left side of your benefits summary. Your per pay period costs will be reflected on the bottom right of the “Your Cost” column.
• Take the “Your Cost” number and multiply it by four to estimate the amount you may be billed for your benefits coverage during the payroll reset period.

Please note, your 2024 benefits elections will be reflected on myBenefits through December 31, 2024. After January 1, 2025, your 2025 benefits elections will be displayed. If you have additional questions, please contact Benefits at benefits@uidaho.edu.

The new deferred pay system requires a reset in the payroll schedule from 19.5 pay factors to 20 pay factors. The contract period and job duties remain the same for positions, but the Banner system requires an even number of weeks in the pay schedule (and not split pay periods) to avoid errors and manual work. In other words, the academic year will remain on the 39-week work schedule, but the payroll will be paid out over 40 weeks. The summer schedule will remain the same.

No, deferred pay will be one of two options for payroll offered to faculty on AY contracts. Standard pay is the default way to be paid and this aligns with the academic contract. Faculty desiring the deferred pay option must make an affirmative selection.

No. You received that incentive to stop using the old spread pay system.

The old system of spread pay relies on paying faculty before their contract starts, which creates significant challenges. The updated process will allow the administrative systems (Banner) to manage these deferred pay schedules in the manner intended and reduce the administrative burden associated with managing those pay schedules. Likewise, the new system allows for contracts for standard pay and deferred pay to operate with the same payroll schedule assumptions. We can only have one payroll system for academic year faculty. It is no longer possible to support two distinct payroll systems for academic year faculty.

Yes, but they will have to manage a one-time disruption in four pay periods in late summer 2025.

No, you will still be paid the same amount for your work according to your contract.

Faculty who hold administrative appointments (e.g. associate dean, department chair, program director, etc.) and who receive an administrative stipend can opt into having their base salary paid as deferred pay, but the administrative stipend must be paid over the AY (nine months). This is because these positions often fluctuate or start at different points in the year. The new system has difficulty accommodating the variability with these types of positions and so this part of the appointment will be treated separately.

No. Faculty are only eligible to be on deferred pay if they have a 1.0 FTE appointment for an entire academic year.

This information is forthcoming and a solution will be in place by the time of implementation.

If you have direct deposit, you can split your paycheck into another account with your current bank or split your paycheck to another bank with another account. View the instructions to set up direct deposit and split your paychecks. You can decide how much you would like to save. To make up the different gaps in pay, these are the percentages you would need to save from your academic year paycheck to manage that gap fully on your own beginning at the start of AY 25:

Four paycheck gap for the legacy deferred pay schedule reset

15%

Summer 14 week gap between academic year 2025 and 2026 (note: the summer period is normally 13 weeks, but it is 14 weeks in this schedule due to U of I’s biweekly pay schedule)

27%

Currently, several local and national banks offer high interest rate savings accounts. As you budget for the gaps in pay, you might consider saving a percentage of funds into a higher interest rate savings account for a better return on these funds.

There are other ways to save and invest your funds. Please consult your financial advisor about these options.

U of I also offers low-cost loans for employees through a voluntary benefit program. These are repaid through U of I payroll deduction.