Purpose:

The purpose of this bulletin is to provide agencies with information and procedures regarding the new promotion method of calculating affected employees’ salaries and the processing of necessary salary corrections.

Affected Employees:

Employees in a CSEA (Bargaining Units 02, 03, 04, 47) N/S hourly position who move to a graded position in any bargaining unit effective on or after 10/01/2019 are affected.

Background:

Chapter 165 of the Laws of 2017, which amends Section 131.5 of the Civil Service Law, and the N/S to Grade side letter to the 2016-2021 CSEA Agreement, provide for a revised method of calculating salaries for affected employees retroactive to 10/01/2019. This revised method is in addition to the Civil Service Law, Section 131.5 rules, which are still applicable.

Payroll Bulletin No. 835.1 Revised Method of Calculating Salaries for Employees upon Movement from a CSEA N/S Position to a Graded Position in any Bargaining Unit has been updated to reflect these revisions. 

Effective Dates:

The revised method of calculating salaries for affected employees is effective 09/26/2019 (Institution) and 10/03/2019 (Administration).

Eligibility Criteria:

To be eligible for the revised method of calculation, an employee must have been in a CSEA N/S hourly position immediately prior to moving to a graded position and the movement is determined to be a promotion based on comparison of the employee’s hourly rate to the hourly equivalent of the graded position (see Payroll Bulletin No. 835.1).

N/S service in any of the following will not be considered as creditable service when reconstructing the employee’s salary:

• Office of Court Administration
• City University of New York (CUNY)
• Thruway Authority
• Teachers’ Retirement System
• Dormitory Authority
• State University of New York (Grade 980s only)
• Legislative Payrolls
• Judicial Payrolls
• Comp Rate Code of FEE and BIW

Revised Method of Promotion Calculation:

If the movement from the CSEA N/S hourly position to the graded position is determined to be a promotion, the following calculation should be applied:

• Annualize the employee’s CSEA N/S hourly rate immediately prior to the movement to the graded position by multiplying the rate by 2088 (disregard any resulting cents).
• Compare the annualized salary to the CSEA salary schedule of the associated N/S hourly position in effect on the movement effective date to determine what grade to assign to the N/S hourly position (highest grade range that supports the N/S salary). The promotion percentage will be determined based on the range in grade from the assigned grade to the graded position.
• Before applying the promotion percentage:
  • Determine the creditable workdays to use for the salary reconstruction of the lower assigned grade by totaling the number of hours worked for the period the hourly rate is within the range of the assigned grade (Earnings Code RGH only) and dividing by 7.5 or 8 hours, as appropriate rounded down. The creditable workdays are used to derive the N/S hourly position anniversary date and performance advance payment cycle. 
  • Determine the N/S hourly position anniversary date by subtracting the creditable workdays from the graded anniversary date.
  • Beginning with hiring rate of the assigned grade, reconstruct the salary based on the N/S hourly position anniversary date giving credit for performance advances and raises as appropriate.
• Apply the promotion percentage to the reconstructed salary as outlined above and compare the result to the hiring rate or the 130.4 Impracticable to Recruit (if applicable) of the graded position (employee receives the greater of the two).
• The anniversary date and increment code of the graded position will be determined based on the effective date of the promotion.

Promotion Recalculation (Fixed Incremental Salary)

In addition to the initial NS to Grade promotion salary due at the time of movement to a graded position, an employee may be eligible to receive a promotion recalculation. If the employee’s reconstructed salary is less than the job rate of the lower grade and the employee would be due a performance advance in the lower grade before a performance advance in the new grade is payable, the promotion recalculation would be paid in the next performance advance rating cycle of the reconstructed grade based on the NS hourly position anniversary date.

The Fixed Incremental Salary (FIS) is calculated by adding the value of the performance advance to the reconstructed NS salary determined above (not to exceed the job rate of the lower assigned grade) and increasing the result by the promotion percentage. This salary must be entered into the FIS Amount field of the transaction submitted on the Job Action Request page for the graded appointment. In addition, the Increment Cd field must be 0004 or 1004 depending on the payment cycle of the employee’s NS hourly position anniversary date. This information will be used to pay the FIS amount in the next performance advance rating cycle.

Agencies can review calculation examples on the CSEA Hourly to Annual Promotion Calculation Guide.

OSC Actions:

OSC will automatically update the PayServ Job Data records of eligible employees for the retroactive period from 09/26/2019 through 05/01/2024 (Institution) and 10/03/2019 through 04/24/2024 (Administration). Automatic processing will be completed subsequent to the issuance of this bulletin. Therefore, OSC will inform agencies that processing is complete by posting a message on the PayServ Bulletin Board and by email to all agencies.

Job Data – Compensation

• On the effective date of the movement to the graded position, the salary will be updated for all eligible employees with a Payroll Status of Active, Leave With Pay, or Leave of Absence.
• A row will be inserted on the employee’s Job Data page with the updated salary using the following Action/Reason codes:
  • Action/Reason code of Pay Rate Change/NSG (N/S to Grade)
  • Action/Reason code of Pay Rate Change/CSL (Cor Sal) for all eligible subsequent effective dated rows regardless of status.
• The employee’s anniversary date of the graded position on the inserted row will remain the same, unless the employee has subsequent movement that impacts the anniversary date.
• The employee’s increment code of the graded position on the inserted row will remain the same, unless the employee has subsequent movement that impacts the increment code. 

OSC Automatic Retroactive Processing:

OSC will automatically calculate retroactive adjustments for regular earnings and Time Entry earnings that are calculated by the system based on annual salary, such as OT for Annual 2080 (Earnings Code OCS), OT for Annuals (Earnings Code OTA) and Holiday Pay (Earnings Code HPA), resulting from the change in salary.

Control-D Report Available After Processing:

The following Control-D report will be made available for agency review after the automatic retroactive payments have been processed. 

NHRP738 – Excel to Control D

Upon opening the NHRP738, the description CSEA Hourly to Annual Promotion Calculation appears in the page header. This report identifies all employees whose salary was increased as a result of applying the new promotion methodology for eligible employees. The report includes the Effective Date, Grade, and the New Compensation Rate. The report is available to an employee’s current agency as it may be different than the one where the NS to grade movement occurred.

Agency Actions - Beginning Administration Pay Period 3L or Institution Pay Period 3L:

Starting in Administration Pay Period 3 lag and Institution Pay Period 3 Lag agencies must begin applying the revised promotion calculation methodology as outlined above for CSEA N/S hourly employees upon movement to a graded position. If the resulting salary from the promotion calculation is the greater benefit to the employee, the following action reason codes(s) should be used upon transaction submission:

• Action/Reason code of Pay Rate Change/NSG (N/S to Grade)
• Action/Reason code of Pay Rate Change/CSL (Cor Sal) for all eligible subsequent effective dated rows.

Agency Actions – Retroactive Processing:

Reporting Retroactive Adjustments

Time Entry earnings codes that are submitted with an amount will not be adjusted automatically. Therefore, once OSC completes its automatic processing, agencies must report the adjustment amount for earnings such as Extra Time Override (Earnings Code EXO) and Regular Salary Override (Earnings Code RGO).

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.
• If earnings were previously reported using Earnings Code RGS (Regular Pay Salary Employee) and a date range that exceeded the number of days reported, the system will calculate the adjustment of earnings based on the number of workdays within the range.
• Adjustments for earnings that are calculated automatically such as OT for Annuals (Earnings Code OTA) or OT for Annual 2080 (Earnings Code 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 results 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.

Note: 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 Override (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 OT Override (Earnings Code OTO), Earnings Code ARO (Adj Retro Raise for OT and RCL) must be used to process the adjustment. Please refer to Payroll Bulletin No. 1893 – Reporting Adjustments 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 as 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 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).

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

The adjustments (Earnings Codes AJR, ARC, and ARO) and retroactive payments (Earnings Codes RXX) are supplemental taxable income and will be included in the employee’s taxable gross 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 (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 retroactive 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 2024 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 – New York Retiree Indicator 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 Report of Check Exchange (AC 1476-P), Next of Kin Affidavit (AC 934-P), 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 military information may be directed to the Military Stipend mailbox.

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