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. 2000 - 58

November 27, 2000

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 Interest Penalty for Retired and Separated Administrative and Residual (P-5) Bargaining Unit Employees

I. AUTHORITY

The arbitration award between the State of Connecticut and the Administrative and Residual (P-5) bargaining unit, for the period July 1, 1999 through June 30, 2003, was approved by Legislature on June 19, 2000. Due to a legal dispute, the contract had been held up by the judicial system. On October 3, 2000, the Superior court issued its decision that the award could be implemented.

Pursuant to Section 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 P-5 Interest Arbitration dated April 24, 2000. The 5% is payable for the period April 24, 2000 until the date an employee receives all the retroactive amounts due him/her under the award.

II. ELIGIBLE EMPLOYEES

Administrative and Residual Bargaining Unit employees who were actively employed on July 1, 1999 but have since retired or separated from State service.

Administrative and Residual Bargaining Unit employees who were actively employed on July 1, 1999 but were promoted into another collective bargaining unit, should contact their agency personnel officer to initiate any compensation due or there may be an over payment issue. Please refer to OLR memo dated November 14, 2000.

III. COMPENSATION

A. Retroactive General Wage Increases are effective as follows:

Effective Date    Increase
June 18, 1999 (Retroactive)    2% of Base Salary

December 31, 1999 (Retroactive)     

 2% of Base Salary

June 30, 2000 (Retroactive)     

 3.5% of Base Salary

B. Retroactive Annual Increments and Retroactive Lump Sum Payments for Maximum Step Employees and the Addition of an Eighth Step
 
Effective June 18, 1999, eligible employees who were at the maximum step of the salary schedule as of the annual increment effective dates should receive a 2.5 percent lump sum payment when the annual increment would have applied.
 
Effective June 30, 2000, the pay plan is modified by the adding of a full 8th step, which is 3.0 percent above step 7.

IV. RETROACTIVE PAYMENTS

When recalculating the retroactive payments, agencies are to calculate to the date of retirement or separation. For the pay periods 06/18/99 through 10/19/00 agency staff must calculate and process the following retroactive payments manually. Checks dated 12/29/00 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, retirement contributions and garnishments (if applicable). 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
June 18, 1999 2% of base salary 06/18/99 - 10/19/00 12/29/00
December 31, 1999 2% of base salary 12/31/99 - 10/19/00 12/29/00
June 30, 2000 3.5% of base salary 06/30/00 - 10/19/00 12/29/00
B. Retroactive Annual Increments and Lump Sum Payment at Maximum Step
 
Effective Date Period Covered Check Date
July 1, 1999 06/18/99 - 10/19/00 12/29/00
January 1, 2000 12/31/99 - 10/19/00 12/29/00
July 1, 2000 06/30/00 - 10/1900 12/29/00

V. CALCULATION OF INTEREST PENALTY FOR RETIRED AND SEPARATED EMPLOYEES

An interest penalty of 5% is payable for the period April 24, 2000 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 made will need to be calculated individually.
 
A. Retroactive Payments For Eligible A&R Employees Actively Employed Between June 18, 1999 and June 29, 2000 But Since Retired or Separated.
 
Multiply the retroactive amount paid by the number of days between April 24, 2000 and the date of payment of the retroactive amount (December 29, 2000*) divided by 360; then the product multiplied by 5%.
 
Example: If retroactive amount was $1000:
 
249/360 x 5/100 x $1000/1 = $ 34.58
 
B. Retroactive Payments For Eligible A&R Employees Actively Employed Between June 30, 2000 and October 19, 2000 But Since Retired or Separated.
 
Multiply the retroactive amount paid by the number of days between June 30, 2000 and the date of payment of the retroactive amount (December 29, 2000*) divided by 360; then the product multiplied by 5%.
 
Example: If retroactive amount was $800:
 
140/360 x 5/100 x $800/1 = $ 15.55
 
*Agencies that already made the retroactive payment must calculate to the check date of that payment.

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 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.

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 paid 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, 566-3236;
 
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) 702-3451;
 
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 to:

Retirement & Benefits Division, Audit Unit

55 Elm Street, Hartford, CT 06106

 

NANCY WYMAN

STATE COMPTROLLER

NW:EH

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