Date:March 16, 2007
Bulletin Number: 708

Public Employees Federation (PEF) and Rent Regulation Services Unit  (RRSU) April 2007 Merit Step Payments


To inform agencies of a new Control-D report (NPAY779) that will list potentially eligible employees for the Merit Step payment and instructions to add or delete eligible employees.

Affected Employees
Merit step eligible employees in Bargaining Units 05 and 67.

Effective Date(s)

Payment will be processed in Pay Period 1L, paychecks dated April 26, 2007 (Institution) and May 2, 2007 (Administration).


Chapter 419 of the Laws of 2004 which implemented the negotiated agreement between PEF and the State of New York for 2003-2007 and a GOER side letter dated January 10, 2005 provide for the payment of a merit step to eligible PEF employees beginning April 1, 2007.

Chapter 9 of the Laws of 2005 which implemented the negotiated agreement between RRSU and the State of New York for 2003-2007 and a GOER side letter dated January 10, 2007 provide for the payment of a merit step to eligible BU67 employees beginning April 1, 2007.

Eligible employees with a Pay Basis Code of ANN, 21P or CAL will receive the initial Merit Step payment in April 2007. Employees who become eligible in the future will be processed in the next available cycle:

  • ANN employees will be processed in either April or October
  • 21P and CAL employees will be processed in September

After an employee receives a Merit Step payment, the merit step becomes part of the employee’s base salary.

An employee’s Geographic Differential is not reduced by the amount of the Merit Step. A future bulletin will be issued regarding any Geographic Differential implications.

Note: A bulletin will also be issued in the near future to inform agencies of OSC’s automatic processing of the Merit Step payments and to provide instructions for payments not processed automatically.

PEF April 1, 2007 Salary Schedule (Attachment A)

RRSU April 1, 2007 Salary Schedule (Attachment B)

Eligibility Criteria

To be eligible for the Merit Step payment, employees must satisfy all of the following criteria:

One (1) complete year of service at the Job Rate of the salary grade

  • One (1) year of service is defined as 26 pay periods and does not need to be continuous.
  • For employees with a Pay Basis Code of CAL or 21P, the 10-month school year satisfies the one year of service requirement.
  • Job Rate in a higher NS equated grade (on the NYS Position page) counts towards Job Rate credit service in a lower grade.
  • Lateral Transfers: If the bargaining unit changes on a lateral transfer but the employee remains at the Job Rate (or higher), the service will count towards credit for the Merit Step payment.
  • Full periods of Sick Leave with or without pay will not count towards the one year at Job Rate requirement.
  • Promotions/Reclassifications: Employees will be considered for advancement to the merit step of the new grade after completing one year at Job Rate in the new grade payable on the next appropriate pay cycle.

Note: One full year in the higher grade must be completed before consideration of the Merit Step payment even if the Increment Code did not change because of the Job Rate to Job Rate rule.

  • Demotions will be treated the same as Longevity Lump Sum payments as described in Payroll Bulletin No. 623 (PS&T Longevities):
  • An employee who is not eligible for the payment becomes eligible if the employee returns to a lower graded position between April 1, 2007 and March 31, 2008, provided the employee otherwise would have been eligible if the employee had been in the lower graded position at the time of payment and remains in the lower graded position for at least six (6) pay periods; and
  • The promotion was temporary and the employee has been reinstated to the employee’s previous position or has been appointed to another lower graded qualifying position; or
  • The promotion was permanent, but the demotion occurred:
    • in lieu of layoff; or
    • voluntarily during the probationary period; or
    • as a result of failure of a probationary period.
  • Reallocations: Employees who are reallocated will be treated as if the employee was in the new grade for the time rendered in the previous grade.

Five (5) years of cumulative State service

  • All service counted toward the one year at Job Rate requirement described above will also count toward the five year requirement.
  • Sick Leave with Pay will count toward the five year requirement.
  • Service performed in the following will not count towards the five year requirement:
    • Thruway Authority
    • Teacher’s Retirement System
    • Dormitory Authority
    • SUNY Grade 980 positions
    • HRY, FEE, or BIW pay basis codes (excluding paid Military Stipends)
    • Office of Court Administration payrolls
    • CUNY payrolls
    • Legislative payrolls
    • Judicial payrolls
  • Employees with more than a one (1) year break in Service who are rehired with one of the following Action/ Reason codes are eligible to use the service prior to the break to satisfy the five year cumulative service requirement:
    • RCM (Reinstate Civil Service Commission Action)
    • RDR (Reinstate Court Order Directive)
    • PRF  (Preferred List)
    • RER (Reinstate Roster)
    • RFD  (Reinstate Disability)
    • 713   (Reinstate Disability)

“Satisfactory” performance evaluations for the previous three years

  • “Unsatisfactory” ratings given during that period and subsequently reversed on appeal will satisfy this requirement.

No finding of guilt in any Notice of Discipline (NOD) for the previous three years. It does not include NODs dismissed by an arbitrator or withdrawn by the agency during that period, but it does include NODs that are settled or are pending resolution during that period.

The employee has taken advantage of agency sponsored job-related training opportunities during the previous three years.

 Additional Payment Criteria:

  • Employees must have a Pay Basis Code of ANN, CAL, or 21P
  • PEF employees must be in grade 4 or 7 through 18
  • RRSU employees must be in grade 18
  • Employees who are NS equated to one of the above grades (on the NYS Position page) may be eligible
  • Employees may be full or part-time
  • Employees must be in the qualifying position on the beginning date of the payroll period in which the Merit Step payment will be paid

Agency Actions

Control-D report NPAY779 is currently available for agency review. The report will contain employees who may meet eligibility criteria #1 and #2 above and will include an indication that an “Unsatisfactory” rating was reported to OSC with the effective date. OSC will automatically process Merit Step payments to eligible employees on the Control-D report in Pay Period 1L unless informed by agencies otherwise.

Agencies must review this report to verify eligibility criteria #1 & #2 and determine whether employees meet eligibility criteria #3, #4, and #5. Agencies must notify OSC of any employees who do not meet all five (5) eligibility criteria and therefore are not eligible for the payment.

Potentially Eligible Employees Who May Not Be on the Control-D Report

  • Employees with multiple Job records who may have five (5) years of cumulative service
  • Employees in all bargaining units with Increment Code 2222 representing Composite salaries who may be eligible to receive the Merit Step payment in either portion of the employee's composite salary.

Instructions for Making Changes and Verifying Payments

  • To be included in the automatic payment, qualifying employees as stated above must be added to the Merit Step Correction Report.
  • Additions or deletions to the preliminary Control-D report must be submitted on the Merit Step Correction Reports attached to this bulletin. (The forms may be duplicated if additional copies are needed.) These forms must be used to add employees who do not appear on the listing and to delete employees who are not eligible.
  • Agencies must fax the Correction Report to (518) 474-2601.  Additionally, agencies must send an email to SalaryDetermination@osc.state.ny.us to verify that a Correction Report has been faxed or to state that no changes are necessary.
  • Additions and deletions must be submitted as soon as possible.  Faxes and emails must be received no later than April 5, 2007.
  • Any changes made to an employee’s Job record that affect eligibility after a report is created and prior to payment may result in the payment not being paid automatically.
  • Agencies must not submit additions or deletions for employees based on anticipated job changes prior to Pay Period 1.
  • Certain employees may meet the eligibility requirements but the employee's current salary is above the merit step or the employee is currently on a leave. Agencies must still verify eligibility for these employees based on the five (5) eligibility requirements listed above. Agencies must not remove these employees from eligibility based solely on the employee's salary or status.
  • Employees will be held harmless (and therefore receive payment) if agencies fail to report information to OSC that would otherwise disqualify the employee from receiving the payment. Employees who are deemed ineligible by the agencies after the payment is made will have their salaries corrected but the overpayment is non-recoverable.


Questions regarding this bulletin may be directed to the Salary Determinations mailbox.