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

INTERDEPARTMENTAL MEMORANDUM

June 10, 2005

To: The Honorable Leonard C. Boyle, Commissioner
Department of Public Safety
1111 Country Club Road
Middletown, Connecticut 06457
Subject: Retroactive Payments and Interest Penalty for State Police (NP-1) Bargaining Unit Employees

I. AUTHORITY

The interest arbitration award between the State of Connecticut and the Connecticut State Police Union (CSPU, NP-1) bargaining unit for the period July 1, 2004 through June 30, 2007.

II. RETROACTIVE PAYMENTS

The following pay plans benefited from enhanced top steps effective April 1, 2005: Trooper Pay Plan, the Sergeant Pay Plan and the Master Sergeant Pay Plan.

III. INTEREST PENALTY

Pursuant to Sections 5-276b of the Connecticut General Statutes, an interest penalty of 5% per annum is to be paid for late implementation of the provisions of the NP-1 arbitration award issued April 13, 2005.

IV. CALCULATION OF INTEREST PENALTY

An interest penalty of 5% is payable for the period April 13, 2005 until the date the eligible employee receives all the retroactive amounts due him/her under the arbitration award.

*In the examples below, the check date of June 24, 2005 is being used. Agencies must calculate to the actual check date of the payment.

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

Example: If the lump sum amount was $300:
 
72 days/360 days x .05 x $300 = $3.00

Multiply the retroactive lump sum amount paid by the number of days between April 13, 2005 and the date of the payment, *June 24, 2005 (which is 72 days) divided by 360; then the product multiplied by 5%.

V. PAYROLL PROCEDURES FOR INTEREST ARBITRATION AWARD

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. PAYROLL PROCEDURES FOR RETROACTIVE SALARY INCREASE

On the Additional Pay Page: Amount; Earnings Code RTR.

VII. GENERAL

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, Fiscal Policy Division, (860) 702-3440;

NANCY WYMAN
STATE COMPTROLLER

NW:CG

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