Purpose:

The purpose of this bulletin is to inform agencies of OSC’s automatic processing of the April 2023 Retroactive Increases to Location Pay and Location Mid-Hudson Pay and provide instructions for payments not processed automatically.

Affected Employees:

Employees represented by the Public Employees Federation (BU 05) who meet the eligibility criteria are affected.

Background:

Chapter 190 of the Laws of 2023, which implements the 2023-2026 Agreement between the State of New York and the Public Employees Federation (PEF), provides for a retroactive increase in Location Pay for employees located Downstate who are currently receiving Earnings Code LOC and employees located in the counties of Dutchess, Putnam or Orange currently receiving Earnings Code LMH.

Effective Dates:

The retroactive increases to Location pay and Location Mid-Hudson Pay will be paid in paychecks dated 08/30/2023 (Administration Pay Period 10L) and 09/07/2023 (Institution Pay Period 10L) with the effective dates listed below:

Eligibility Criteria:

Employees who have received or currently receive Earnings Code LOC or Earnings Code LMH on the 2023 Payment Effective Dates listed above for the applicable Pay Cycle/Pay Period Type are entitled to the increase.

Earnings Codes and Payment Amounts

Earnings Code LMH - Orange, Putnam, Dutchess counties

Earnings Code LOC - Nassau, Suffolk, NYC, Rockland, Westchester counties

OSC Actions:

Location Pay (Earnings Code LOC) and Location Mid-Hudson (Earnings Code LMH)

OSC will automatically insert a row to update the Additional Pay page with the effective dates listed in the chart above for the April 2023 increases for all employees in BU 05 receiving Location Pay or Location Mid-Hudson Pay at the current amount.

OSC will automatically update any eligible subsequent rows.

Automatic Retroactive Processing

OSC will automatically calculate retroactive adjustments for Time Entry earnings that are calculated by the system that include Location Pay (Earnings Code LOC) or Location Mid-Hudson Pay (Earnings Code LMH) such as overtime (Earnings Code OCS).

If an employee receives a payment and has worked in more than one agency but has been paid by all agencies in the same Employee Record Number since the effective date of the payment, all retroactive adjustments will be paid in the most current agency.

If an employee receives a payment and has worked in more than one agency and has been paid in more than one Employee Record Number since the effective date of the payment, the retroactive adjustments will be paid in the most current agency of the Employee Record Number in which the payment was made.

Agency Actions:

To pay the April 2023 retroactive increases to Location Pay and Location Mid-Hudson Pay for Bargaining Unit 05 to eligible employees not processed automatically or who return from an authorized leave of absence, the agency must submit the following information on the Additional Pay page using the appropriate Earnings Code:

Agency Actions - Retroactive Processing

Reporting Retroactive Adjustments

Time Entry earnings codes that are submitted with an amount will not be adjusted automatically. Therefore, beginning in Administration Pay Period 11L, agencies must report the adjustment amount for earnings codes such as Extra Time Override (Earnings Code EXO).

Correcting an Automatic Retroactive Adjustment

When certain conditions exist in an employee’s record, the automatic retroactive adjustment may be incorrect. Therefore, the agency is responsible for identifying employees who meet the following conditions and, if necessary, submitting the necessary adjustment:

• If an employee has a check returned or exchanged on an AC-230 for dates on or after the effective date of the payment, the payroll system does not consider the AC-230 when calculating the automatic retroactive adjustment.
• Adjustments for earnings that are calculated automatically, such as OT for Annuals 2080 (OCS), will be calculated incorrectly if the dates previously reported as a single entry on the Time Entry page overlap the effective date of the payment. The system will calculate an adjustment for all earnings reported in a single entry based on the salary in effect on the Earnings End Date.
• For employees who had a change reported on the Job Data page, since the effective date of the payment and the action resulted in an overpayment of earnings, the automatic negative retroactive adjustment may not have been processed because the overpayment was either not recoverable or was recovered using an overpayment earnings code or an AC-230. In this case, the negative retroactive adjustment may be re-generated when the payment is processed. OSC will turn off (not process) the automatic negative adjustment for these employees since in most cases these overpayments were either not recoverable or recovered using another method.

If an overpayment of earnings is identified after the automatic payment is processed but before the paycheck is received by the employee, the employee must be notified of the overpayment and the adjustment that will be reported in a subsequent pay period.

Submitting an Adjustment

When an adjustment is needed for COVID-19 related overtime such as Covid-19 OT (Earnings Code CVO), Earnings Code ARC (Adjust Retro Raise for C19 OT) must be used to process the adjustment. When an adjustment is needed for non-COVID-19 related overtime or recall such as Out of Title Overtime (Earnings Code OTT), Earnings Code ARO (Adj Retro Raise for OT and RCL) must be used to process the adjustment. Please refer to Payroll Bulletin 1893 Reporting Adjustment to Overtime for more information. Agencies must continue to use Earnings Code AJR (Adjust Raise) for all other override Time Entry Earnings Codes requiring a manual adjustment that are a result of a retro salary increase.

To process a retroactive adjustment or correct an automatic retroactive adjustment, agencies must submit the following information on the Time Entry page or the Time Entry Interface (NPAY502) using the Earnings Code AJR, ARC or ARO:

Military Stipend Leave:

OSC will recalculate the military stipend amount for employees who were placed on a Paid or Unpaid Military Stipend Leave on or after the effective date of the payment as the result of new military orders.

• If the employee received a stipend, OSC will insert a row on the employee’s Job Data page effective the date the employee is entitled to the increase using the Action/Reason Code of Pay Rate Change/MSC (Military Stipend Change) and will increase the employee’s biweekly stipend amount. In addition, updates will be made to all subsequent rows requiring an increased biweekly stipend amount.
• If the employee did not receive a stipend but becomes eligible for a stipend as a result of the payment, OSC will insert the following in PayServ:
  • A row on the employee’s Job Data page effective the date the employee is entitled to a stipend using the Action/Reason Code of Paid Leave of Absence/MLS (Mil Stip) and the new biweekly stipend amount.
  • A row on the employee’s Job Data page for each affected subsequent row using the Action/Reason Code of Pay Rate Change/MSC (Military Stipend Change) and the new biweekly stipend amount.
  • A row on the Time Entry page using the Earnings Code MSP (Military Stipend Payment) to pay the stipend for each pay period the employee is eligible.
  • Any additional adjustment that is required due to the increased biweekly stipend amount that will not be calculated automatically will be reported by OSC on the Time Entry page using the Earnings Code AMS (Adjust Military Stipend).

Control-D Report Available After Processing:

The following Control-D report will be available after processing of the automatic increase:

NHRP703 Mass Salary Additional Pay Report

This report identifies all employees receiving an automatic increase for the April 2023 Retroactive Increases to Location Pay (Earnings Code LOC) and Location Mid-Hudson Pay (Earnings Code LMH). Fields on this report include EmplID, Employee Record Number, Employee Name, Earn Code, Grade, Salary Plan, Bargaining Unit, and Additional Pay Amount.

General Deductions:

All general deductions for employees whose Payroll Status is Terminated, Retired, or Deceased will be automatically canceled by OSC with the exception of percentage-based dues and the following:

Tax Information:

These monies are taxable income and are subject to all employment taxes and income taxes. These monies will be included in the employee’s taxable gross and will be reported on the employee’s Form W-2.

The adjustments (AJR, ARC, ARO, and Retro (RXX)) are supplemental taxable wages, will be included in the employee’s taxable gross and are subject to all employment and income taxes.

Federal, State, and New York City income tax withholding will be calculated using the Aggregate method. Yonkers income tax withholding will be calculated using the Flat Rate method. Yonkers Flat Rate Withholding is 1.95975% for Yonkers residents and 0.50% for Yonkers non-residents.

Special Wage Payments for Individuals Who Filed for Retirement Social Security Benefits:

Per Internal Revenue Service Publication 957, OSC will be reporting retro payments made to individuals who have filed for Social Security benefits to the Social Security Administration (SSA).

As PayServ does not include this information, OSC will be mailing a Request for Special Wage Payment Report to inactive individuals who are 62 or older in the calendar year and to active employees with the New York Retiree Indicator checked in Modify a Person who receive the retroactive payment. Recipients of this mailing will be asked to fill out the request and return it to OSC for inclusion on the Special Wage Payment report to SSA. This report will be submitted to SSA after the close of the 2023 tax year.

It is important that agencies ensure the New York Retiree Indicator box is checked for rehired retirees. Please see Payroll Bulletin No. 1728 for further details on the New York Retiree Indicator box.

Undeliverable Checks:

When a valid payroll check is undeliverable due to the agency’s inability to locate the employee, the agency should follow the Agency Actions identified in Payroll Bulletin No. 1786 - Non-Negotiated and/or Undeliverable New York State Payroll Checks.

Checks issued to eligible employees who are now deceased should be submitted as a stop payment request with a reason of Exchange in PayServ. The required AC 1476, Next of Kin Affidavit, and original death certificate should be submitted to the Payroll Reversal and Exchange mailbox at the same time as the stop payment request. If a Next of Kin Affidavit has been previously submitted for a deceased employee’s payroll check, OSC will accept a photocopy of this form along with a new Report of Check Exchange.

Payroll Register and Employee’s Paycheck/Advice:

All retroactive adjustments will be displayed on the Payroll Register using the appropriate Earnings Code and the amount paid and will be displayed on the employee’s paycheck stub or direct deposit advice using the appropriate Earnings Description and the amount paid unless the number of earnings codes exceeds 13. Agencies should utilize Locked Query LQ_PCD_PAYCHECK_EARNINGS_BY_ID to identify a complete list of regular earnings and retroactive adjustments if there are more than 13 earnings codes.

Questions:

Questions regarding this bulletin may be directed to the Payroll Earnings mailbox.

Questions regarding general deductions may be directed to the Payroll Deduction mailbox