Date:August 16, 2007
Bulletin Number: 743

September 2007 Merit Step Eligibility Information for Employees Represented by the Public Employees Federation (PEF) with a 21P or CAL Pay Basis Code


To inform agencies of the availability of Control-D report NPAY779 (Merit Step Eligibility Listing) that will list potentially eligible employees for the Merit Step payment and to provide instructions on how to add eligible or to delete ineligible employees from the payment.

Affected Employees

Merit Step eligible employees in Bargaining Unit 05 with a Pay Basis Code of 21P or CAL.

Effective Date(s)

September 2007 Merit Step payments for PEF employees are payable on either September 1, 2007 for employees with a Pay Basis Code of CAL or the first day of the academic year for employees with a Pay Basis Code of 21P. Payments will be included in Administration checks dated 9/19/07 and Institution checks dated 9/27/07.


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.

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

An employee’s Geographic Pay Differential is not reduced by the amount of the Merit Step payment (see Payroll Bulletin No. 721)

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.

Eligibility Criteria

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

  1. 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 (1) year of service criteria.
    • Job Rate in a higher NS equated to grade position (on the NYS Position page) counts toward Job Rate 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 the Job Rate service.
    • Full periods of Sick Leave with or without pay will not count toward the Job Rate service.
    • 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 (1) 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.

    • Merit Step payment rules for demotions will be identical to Longevity Lump Sum payment rules as described in Payroll Bulletin No. 623:
      • An employee who is not eligible for the payment becomes eligible if the employee returns to a lower graded position between September 1, 2007 and August 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.
  1. Five (5) years of cumulative State service.
    • All service counted toward the one year at Job Rate criteria described above will also count toward the five (5) year requirement.
    • Sick Leave with Pay will count toward the five (5) year criteria.
    • Service performed in the following will not count toward the five (5) year criteria:
        • Thruway Authority
        • Teachers’ 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 (5) year cumulative service criteria:
        • RCM (Reinstate Civil Service Commission Action)
        • RDR (Reinstate Court Order Directive)
        • PRF  (Preferred List)
        • RER (Reinstate Roster)
        • RFD  (Reinstate Disability)
        • 713   (Reinstate Disability
  1.  “Satisfactory” performance evaluations for the previous three (3) years.
    • “Unsatisfactory” ratings given during that period and subsequently reversed on appeal will satisfy this criteria.
  1. No finding of guilt in any Notice of Discipline (NOD) for the previous three (3) 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.
  1. The employee has taken advantage of agency sponsored job-related training opportunities during the previous three (3) years.

Additional Payment Criteria:

  • Employees must have a Pay Basis Code of 21P or CAL.
  • Employees must be Active, on Paid Leave of Absence (except with reason of SKL) or on Leave of Absence with reason of WDL, WSP, WPS.
  • PEF employees must be in grade 4 or 7 through 18 or NS equated to one of these grades (on the NYS Position page).
  • 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 contains employees who may meet eligibility criteria #1 and #2 above and is available to agencies for review.  There will be two reports for each pay cycle; one will contain employees with 21P Pay Basis Code and one will contain employees with CAL Pay Basis Code.  Agencies must review employees on these reports to verify eligibility criteria #1 and #2 and determine whether employees meet eligibility criteria #3, #4 and #5.  To assist agencies with determining whether or not an employee meets all eligibility criteria, the effective date of an “Unsatisfactory” rating reported to OSC and the effective date of a promotion within the last calendar year will be included on the report.

OSC will automatically process Merit Step payments for all employees appearing on the NPAY779 (unless the employee has a job change that affects eligibility) in Pay Period 11L (Administration) and 12L (Institution).  Therefore, agencies must notify OSC of any employees who do not meet all five (5) eligibility criteria thus making them ineligible for the payment.

Potentially Eligible Employees Who May Not Appear on the Control-D Report NPAY779

  • Employees with multiple Job records who may have five (5) years of cumulative service.
  • Employees who may meet qualifying criteria #1 and #2 but the requirement of five (5) years cumulative State service is pre-PayServ due to a break in 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 not appearing on the NPAY779 as stated above must be added to the Merit Step Correction Report.
  • Additions or deletions to the NPAY779 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) 402-4949.  Additionally, agencies must send an email to the Salary Determination mailbox 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 August 24, 2007.
  • Any changes made to an employee’s Job record that affect eligibility after the NPAY779 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 the date of payment.
  • 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) criteria listed above.  Agencies must not remove these employees from the payment based solely on the employee's salary or status.  Eligible employees who are above the merit step will have an MST row inserted to indicate the employee meets all eligibility criteria but is not entitled to any additional monies.  OSC will use the eligibility verification for employees on leave to update salaries upon the employee’s return to the payroll.

  • 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.  Salaries for employees who are deemed ineligible by the agency after the payment is made will be corrected but the overpayment is non-recoverable.
  • Employees previously deemed ineligible to receive the Merit Step payment and who appear on the current NPAY779 must be re-evaluated to determine if the employee meets the criteria for the September payment.
  • Agencies must communicate eligibility status when employees transfer.
  • Agencies must track employees on Military Stipend and Sick Leave and pay the Merit Step payment manually upon the employee’s return.


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