COMPTROLLER'S SEAL STATE OF CONNECTICUT

STATE OF CONNECTICUT

NANCY WYMAN
COMPTROLLER
OFFICE OF THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 06106-1775
MARK OJAKIAN
DEPUTY COMPTROLLER

MEMORANDUM NO. 2002-13

March 15, 2002

TO THE HEADS OF ALL STATE AGENCIES

Attention: Chief Administrative and Fiscal Officers, Business Managers, and Payroll and Personnel Officers
Subject: Retroactive Salary Increases, Retroactive Annual Increments and Lump Sum Payments for Retired and Separated Engineering, Scientific and Technical (P-4) Bargaining Unit Employees

I. AUTHORITY

The arbitration award between the State of Connecticut and the Connecticut State Employees Association concerning the Engineering, Scientific and Technical (P-4) bargaining unit for the period July 1, 2001 through June 30, 2005 took effect on March 8, 2002 by operation of CGS Section 5-278.

II. ELIGIBLE EMPLOYEES

Engineering, Scientific and Technical Bargaining Unit employees who were actively employed on July 1, 2001 but have since retired or separated from State service.

III. COMPENSATION

A. Retroactive General Wage Increases are effective as follows:

Effective Date Increase
July 13, 2001 (Retroactive) 3% of Base Salary

B. Retroactive Annual Increments

Employees will continue to be eligible for and receive annual increments in July or January during the term of this contract in accordance with existing practice.

C. Retroactive Lump Sum Payments for Maximum Step Employees

Effective July 1, 2001, eligible employees who were at the maximum step of the salary schedule as of the annual increment effective dates should receive a lump sum payment when the annual increment would have applied.

IV. RETROACTIVE PAYMENTS FOR RETIRED AND SEPARATED EMPLOYEES

When calculating the retroactive payments, agencies are to calculate to the date of retirement or separation from state service. For the period July 1, 2001 through

March 21, 2002, agency staff must calculate and process the following retroactive payments manually. Checks dated April 19, 2002 should reflect the additional compensation due as a result of the manual calculation of the retroactive difference due on the biweekly and overtime payments made to impacted former employees during the aforementioned dates and lump sums as applicable.

Payments should be identified separately and coded with the applicable DOE. Such payments are subject to mandatory deductions: federal withholding tax and state income tax annualized, social security tax and retirement contributions. Any lump sum retirement sick pay is subject to federal withholding, state income tax annualized and social security tax only.

A. Retroactive General Wage Increase (GWI)

Effective Date Salary Increases Period Covered Check Date
July 13, 2001 3% of base salary 07/13/01 - date of separation 04/19/02

B. Retroactive Annual Increments

Annual Increment Date Period Covered Check Date
July 1, 2001 06/29/01 - date of separation 04/19/02
January 1, 2002 12/28/01 - date of separation 04/19/02

C. Retroactive Lump Sum Payments for Maximum Step Employees

Effective Date Period Covered Check Date
July 1, 2001 06/29/01 - date of separation 04/19/02
January 1, 2002 12/28/01 - date of separation 04/19/02

V. RETIREMENT PROCEDURES

The additional retroactive compensation must be reported to the Retirement and Benefits Services Division in the manner described below as such additional payments may have an impact for retirement benefit purposes.

Each agency must provide the Retirement and Benefit Services Division's Audit Unit with a list of affected retirees accompanied by the worksheet detailing the calculations utilized for these adjustment payments. Worksheets for separated employees must also be provided with a clear notation on each worksheet indicating such status. 

VI. CALCULATION OF INTEREST PENALTY

An interest penalty of 5% is payable for the period August 7, 2001 until the date the eligible employee receives all the retroactive amounts due him/her under the arbitration award.

It is possible that one or more wage increases were due before the award was issued. Therefore, the amounts due will have to be split out and the number for which interest should be paid will need to be calculated individually.

Retroactive Payments from July 1, 2001 through April 19, 2002

255 days/360 days multiplied by 5% multiplied by the retroactive lump sum payment.

Example: If the retroactive amount was $300:
 
255 days /360 days x .05 x $300 = $10.63

Multiply the retroactive lump sum amount paid by the number of days between August 7, 2001 and the date of the payment of the retroactive payment, April 19, 2002 (which is 255 days) divided by 360, then the product multiplied by 5%.

Retroactive Payments from January 1, 2002 through April 19, 2002

108 days/360 days multiplied by 5% multiplied by the lump sum payment.

Example: If the lump sum amount was $100:
 
108 days/360 days x .05 x $100 = $1.50

Multiply the lump sum amount paid by the number of days between January 1, 2002 and the date of the payment, April 19, 2002 (which is 108 days) divided by 360, then the product multiplied by 5%.

Agencies should refer to Office of Labor Relations General Notice No. 96-23 - Payment of Interest Payments for Interest Arbitration Awards dated May 10, 1996.

VII. PAYROLL PROCEDURES

Agency staff must ensure that the employee's masterfile data (Pay Plan, Salary Group and Step, Hourly Rate and Bi-weekly Salary) are correctly coded.

Retired and separated employees who were deleted from the masterfile must be set up as new employees. You must enter a pay code 1, 2 or 3 for these individuals to avoid generating a regular pay check in the system. In lieu of 301 documentation, a memo must be submitted to the Comptroller's Payroll Services Division listing the employees added to the payroll system for the purpose of making this payment.

A. Payment of Retroactive Salary Increases and Retroactive Annual Increments (including other earnings if applicable)

1. On-Line: Screen 047 or 190; R1; Amount; D/OE Code 10.
 
2. Remote Job Entry: ZT Transaction; Same as above.

B. Payment of Retroactive Lump Sum(s)

1. On-Line: Screen 047 or 190; R1; Amount; D/OE Code 10.
 
2. Remote Job Entry: ZT Transaction; Same as above.

C. Interest Arbitration Award

1. On-Line: Screen 047 or 190; R-3; Amount; D/OE Code 1U.
 
2. Remote Job Entry: ZT Transaction; Same as above.

Agencies should use Major/Minor 01-920, Interest Penalty - Payroll Awards as the expenditure object code.

Interest paid on a wage award is not considered wages (IRS Revenue Ruling 72-268). Therefore, the subject interest penalty would not be subject to withholding for income taxes, employment taxes, and retirement contributions.

VIII. GENERAL

Questions may be directed as follows:

Salary Schedules: DAS-Personnel Division, 713-5205;
Payroll Procedures: Office of the State Comptroller, Payroll Services Division,
(860) 702-3463;
Remote Job Entry: Office of the State Comptroller, Payroll Services Division,
(860) 702-3458;
Memorandum Interpretation: Office of the State Comptroller, Policy Services Division, (860) 702-3440;
Contract Issues: Agency Personnel Officer.
Direct List of Affected Retirees and Separated Employees
With a Copy of Calculation Worksheet to: Retirement & Benefits Division
Audit Unit
55 Elm Street, Hartford, CT 06106.

NANCY WYMAN
STATE COMPTROLLER

NW:CH

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