Q: The bi-weekly gross salary of one of your employees, Jane Smith, totals $1,500. Of this amount, $430 helps pay her dependent care account for her three-year-old child. What salary do you report on the monthly report?
A: Although Jane Smith’s taxable salary is reduced by the amount of her dependent care deduction, you would report her gross salary before the deduction — $1,500 — to us.
Q: After 19 years working for you, John Doe acknowledges he wants to work one more year, so he can say he put in two decades on the job. But times are tough, and you offer John $1,500 as an inducement to retire. Since John wants to take a vacation with his family, he agrees to your offer. Should you report this money on the monthly report?
A: No. Payments made in anticipation of retirement or as an inducement or incentive to retire, including payments an employee elected to take in either a lump sum or over a period of time, are never reportable.
Q: Last month Jane Doe worked 15 hours of overtime, for which she received an additional $225. Should you report this on the monthly report?
A: It depends on Jane’s tier. Overtime is reportable on your monthly report, but there are limitations for Tier 5 and 6 members.
In calendar year 2014, the overtime cap for Tier 5 ERS members is $16,882.63. Overtime payments that exceed the cap are not reportable. In addition, you should not collect (or report) contributions on any overtime payments above the cap. This overtime cap increases by 3 percent each calendar year. Please refer to our Tier 5 overtime limitation chart.
For Tier 6 ERS members, overtime is capped at $15,261 for State fiscal year 2014 (April 1, 2013 through March 31, 2014). The fiscal year limit will be adjusted for inflation based on the Consumer Price Index (CPI) annually.
Pensionable overtime worked by Tier 5 and 6 PFRS members is capped at 15 percent of the member’s salary. Overtime payments that exceed the cap are not reportable. In addition, you should not collect or report contributions on overtime payments above the cap.
Q: John Smith runs a program for the police in which cognitively impaired inmates are frequently visited by specially trained dogs. Given the type of work he does, John Smith is eligible to receive lump sum recurring payments for the care and maintenance of the animals. Should you include these payments on the monthly report?
A: Yes. You should report this on your monthly report.
Q: Alan Smith is a member of Tier 2 who was injured on the job. While he’s out of the office, Workers’ Compensation is paying him directly; he is not receiving any salary from you. At the end of the month, do you report him?
A: No. You should never report days worked or salary for members in Tiers 2 through 6 who are receiving payments directly from a Workers’ Compensation carrier.