STATE OF CONNECTICUT
THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 06106-1775
MEMORANDUM NO. 2004-19
May 10, 2004
TO THE HEADS OF ALL STATE AGENCIES
|Attention:||Chief Administrative and Fiscal Officers, Business Managers, and Payroll and Personnel Officers|
|Subject:||Retroactive Payments and Interest Penalty for Retired and Separated Social and Human Services (P-2) Bargaining Unit Employees|
The arbitration award between the State of Connecticut and the Social and Human Services (P-2) bargaining unit for the period July 1, 2002 through June 30, 2006 became effective on March 8, 2004.
II. ELIGIBLE EMPLOYEES
Social and Human Services (P-2) bargaining unit employees who were actively employed since July 1, 2002 and on or after the retroactive effective date of a contract wage increase but have since retired or separated from State service.
III. PAYROLL PROCEDURES FOR RETROACTIVE PAYMENTS FOR RETIRED AND SEPARATED EMPLOYEES
Payroll procedures for processing P-2 retroactive payments are contained in a March 31, 2004 memorandum to all agency payroll and personnel offices issued by the Department of Administrative Services, the Office of the State Comptroller and Core-CT. Refer to Office of the State Comptroller Memorandum No. 2004-08 for retroactive compensation information.
IV. CALCULATION OF INTEREST PENALTY
An interest penalty of 5% is payable for the period October 16, 2003 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 and another wage increase was due after the award was issued. Therefore, the amounts due will have to be split out and the number of days for which interest should be paid will need to be calculated individually.
*In the examples below, the check date of May 28, 2004 is being used. Agencies must calculate to the actual check date of the payment.
Calculation To Be Applied To Eligible P-2 Employees Actively Employed Between June 28, 2002 And December 25, 2003 Who Have Since Retired Or Separated
225 days/360 days multiplied by 5% multiplied by the retroactive lump sum payment.
Multiply the retroactive lump sum amount paid by the number of days between October 16, 2003 and the date of the payment, *May 28, 2004 (which is 225 days) divided by 360; then the product multiplied by 5%.
Calculation To Be Applied To Eligible P-2 Employees Actively Employed Between December 26, 2003 And April 1, 2004 Who Have Since Retired Or Separated
154 days/360 days multiplied by 5% multiplied by the lump sum payment.
Multiply the lump sum amount paid by the number of days between December 26, 2003 and the date of the payment, *May 28, 2004 (which is 154 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.
V. PAYROLL PROCEDURES FOR INTEREST ARBITRATION AWARD
1. On the Weekly Elapsed Time Page: Amount; Time Reporting Code XINTA.
2. On the Additional Pay Page: Amount; Earnings Code INT.
Agencies should use Account 50740, Interest Penalty - Payroll Awards as the expenditure account 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.
VI. 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 by name, employee number and retirement date 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.
Questions may be directed as follows:
|Payroll Procedures:||Office of the State Comptroller, Payroll Services Division, (860) 702-3463;|
|Memorandum Interpretation:||Office of the State Comptroller, Policy Services Division, (860) 702-3440;|
|Direct List of Affected Retirees and Separated Employees|
|With a Copy of Calculation Worksheet to:||Retirement & Benefits Division|
|55 Elm Street, Hartford, CT 06106.|
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