"Lag" Balances Demystified

During the 1989, 1990 time frame, Wake County decided to implement a new payroll/HR system, giving up the "home grown" one we had used for years. Genesys was the chosen system, and the implementation process began. The pay cycle at that time was the 1st through the 31st, with payday being the last day of the month. Employees were paid current for base pay, but premium pay, LWOP, etc, lagged a month behind. It was decided that there needed to be a delay between the time timesheets cut off and payday so that there would be adequate time to process timesheets and to accurately calculate base pay as well as premium pay for the pay cycle. The pay cycle was changed from the 1st to the 31st to the current cycle of the 16th to the 15th, with payday being the last day of the month for the previous 16th - 15th.

The payroll software was switched from our old home grown software package to Genesys in the January 1991 pay cycle. In anticipation of that switch, the pay cycle was changed during the October 1990 pay cycle. At the end of September 1990, all salaried employees received their regular pay which covered the period September 1st to September 30th. At the end of October 1990, all salaried employees were to be paid for the time period of September 16th to October 15th (new pay cycle), and that is where the dilemma began as employees had ALREADY been paid their base pay for September 16th through September 30th.

We had two options:  1. We could pay employees at the end of October 1990 for October 1st to 15th, and everyone here at the time would have only gotten two weeks pay. 2. We could advance everyone here at the time two weeks pay so that they would get a regular check at the end of October. Management chose option #2 - to advance everyone two weeks pay. All regular salaried employees who were on our payroll in October of 1990 (except Paramedics) and who have not since termed and been rehired have what is known as a lag balance. The lag balance represents the amount of money each employee was loaned in October of 1990 so that they would have a regular paycheck that month. The agreement was (and still is) that the lag balance would be recovered from each employee's final paycheck. When lag is recovered, it is recovered at exactly the amount that was given in 1990, and is not adjusted to the employee's current salary.