STATE OF CONNECTICUT
THE STATE COMPTROLLER
55 ELM STREET
HARTFORD, CONNECTICUT 06106-1775
MEMORANDUM NO. 2005-15
April 28, 2005
TO THE HEADS OF ALL STATE AGENCIES
|Attention:||Chief Administrative and Fiscal Officers, Business Managers, and Payroll and Personnel Officers|
|Subject:||Changes to Effective Date of Contract and Calculation of Retroactive Payments and Information on Interest Penalty for Administrative and Residual (P-5) Bargaining Unit Employees|
The arbitration award between the State of Connecticut and the Administrative and Residual (P-5) bargaining unit for the period July 1, 2003 through June 30, 2007 became effective on April 18, 2005. Comptroller's Memorandum No. 2005-12 incorrectly stated April 20, 2005 as the effective date.
II. RETROACTIVE PAYMENTS
Agency staff must calculate any retroactive payments through the pay period ending April 14, 2005, (check date May 13, 2005). This is a change from Comptroller's Memorandum No. 2005-12 which stated April 28, 2005 as the end date for this calculation. Please refer to Core-CT HRMS Daily Mail No. 2, dated April 27, 2005.
III. INTEREST PENALTY
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 arbitration award issued March 7, 2005. The 5% is payable for the period March 7, 2005 until the date an employee receives all the retroactive amounts due him/her under the award.
IV. CALCULATION OF INTEREST PENALTY
If payment will be made for the retroactive amounts in the check dated May 13, 2005, no interest is due.
If payment will be made after the check date of May 13, 2005, an interest penalty of 5% is payable for the period March 7, 2005 until the date the eligible employee receives all the retroactive amounts due him/her under the arbitration award.
* In the example below, the check date of June 10, 2005 is being used. Agencies must calculate to the actual check date of payment.
Retroactive Payments from June 25, 2004 through * June 10, 2005
95 days/360 days multiplied by 5% multiplied by the lump sum payment.
Example: If the lump sum amount was $300:
95 days /360 days x .05 x $300 = $3.96
Multiply the retroactive lump sum amount paid by the number of days between March 7, 2005 and the date of the payment, June 10, 2005 (which is 95 days) divided by 360, then the product multiplied by 5%.
V. PAYROLL PROCEDURES
Interest Arbitration Award
On the Weekly Elapsed Time Page; Amount; Time Reporting Code XINTA
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.
Questions may be directed as follows:
|Payroll Procedures:||Office of the State Comptroller, Payroll Services
|Memorandum Interpretation:||Office of the State Comptroller, Fiscal Policy
|Contract Interpretation:||Agency Personnel Officer.|
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