



STATE OF CONNECTICUT 

NANCY WYMAN
COMPTROLLER 
OFFICE OF
THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 061061775 
MARK OJAKIAN
DEPUTY COMPTROLLER 
MEMORANDUM NO. 200150
August 20, 2001
TO THE HEADS OF ALL STATE AGENCIES
Attention:

Chief Administrative and Fiscal Officers, Business
Managers and Payroll and Personnel Officers

Subject:

Interest Penalty, Maintenance and Service (NP2) Bargaining
Unit, for Active, Retired or Separated Employees

I. AUTHORITY
 Pursuant to Section 5276b of the Connecticut General Statutes, an
interest penalty of 5% per annum is to be paid for late implementation of
the provisions of the NP2 Interest Arbitration dated June 15, 2001. The 5%
is payable for the period June 15, 2001 until the date an employee receives
all the retroactive amounts due him/her under the award.
II. CALCULATION OF INTEREST PENALTY

Comptroller's Memoranda No. 200142 and 200144 directed agencies to
pay the retroactive amounts due on the Arbitrated Award between the State of
Connecticut and NP2 bargaining unit in the pay check dated August 24, 2001.


How the interest penalty is calculated depends upon in which pay check
the award was implemented, the pay check dated August 24, 2001 or the pay check
dated September 7, 2001. Regardless of the check date, two separate interest
penalty calculations must be performed to comply with the retroactive
amounts due on the Arbitrated Award between the State of Connecticut and the
NP2 bargaining unit.

 A. Agencies that implement the award in the pay check dated August 24, 2001
should calculate the interest penalty as follows:

 1. Retroactive Payments from July 1, 1999 through June 30,
2001

 70 days/360 days multiplied by 5% multiplied by the retroactive lump
sum payment.
Example: If retroactive amount was $1,000:
70 days/360 days x .05 x $1,000 = $9.72
 Multiply the retroactive lump sum amount paid by the number of days
between June 15, 2001 and the date of payment of the retroactive amount,
August 24, 2001 (which is 70 days) divided by 360; then the product
multiplied by 5%.

 2. Retroactive Payments from July 1, 2001 through July 26, 2001 and
the scheduled payment of July 27, 2001 through August 24, 2001

 54 days/360 days multiplied by 5% multiplied by the lump sum payment.
Example: If the lump sum amount was $300:
54 days/360 days x .05 x $300 = $2.25
 Multiply the lump sum amount paid by the number of days between July
1, 2001 and the date of the payment, August 24, 2001 (which is 54 days)
divided by 360; then the product multiplied by 5%.

 B. Agencies that implement the award in the pay check dated September 7,
2001 should calculate the interest penalty as follows:

 1. Retroactive Payments from July 1, 1999 through June 30, 2001

 84 days/360 days multiplied by 5% multiplied by the retroactive lump
sum payment.
Example: If retroactive amount was $1,200:
84 days/360 days x .05 x $1200 = $14.00
 Multiply the retroactive lump sum amount paid by the number of days
between June 15, 2001 and the date of payment of the retroactive amount,
September 7, 2001 (which is 84 days) divided by 360; then the product
multiplied by 5%.

 2. Retroactive Payments from July 1, 2001 through August 23, 2001 and
the scheduled payment of August 24, 2001 through September 7, 2001


 68 days/360 days multiplied by 5% multiplied by the lump sum payment.
Example: If the lump sum amount was $400:
68 days/360 days x .05 x $400 = $3.77

 Multiply the lump sum amount paid by the number of days between July 1, 2001 and the date of the payment, September 7, 2001 (which is
68 days) divided by 360; then the product multiplied by 5%.

 Agencies that do not implement the award in the August 24, 2001 pay check
or the September 7, 2001 pay check must calculate to the check date the
payment is made.

 Agencies should refer to Office of Labor Relations General Notice No.
9623  Payment of Interest Payments for Interest Arbitration Awards dated
May 10, 1996.
III. PAYROLL PROCEDURES

Agencies that will be implementing the award in the pay check dated August 24, 2001 should pay the interest penalty in the pay check dated
September 7, 2001.

 Agencies that implement the award in the pay check dated September 7,
2001 should also pay the interest penalty in the pay check dated September
7, 2001.

 Interest Arbitration Award

 1. OnLine: Screen 047 or 190; R3; Amount; D/OE Code 1U.


2. Remote Job Entry: ZT Transaction; Same as above.

 Agencies should use Major/Minor 01920, Interest Penalty  Payroll Awards
as the expenditure object code.

 Interest paid on a wage award is not considered wages (IRS Revenue Ruling
72268). Therefore, the subject interest penalty would not be subject to
withholding for income taxes, employment taxes, and retirement
contributions.
IV. GENERAL

Questions may be directed as follows:


Payroll Procedures: Office of the State Comptroller, Payroll Services
Division, (860) 7023463;


Remote Job Entry: Office of the State Comptroller, Payroll Services Division,
(860) 7023458;

 Memorandum Interpretation: Office of the State
Comptroller, Policy Services Division, (860) 7023440;


Contract Issues: Agency Personnel Officer.

NANCY WYMAN
STATE COMPTROLLER
NW:CH
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