A retroactive payment is additional salary paid to a full or part time employee for services already rendered. No additional hours or days are reported. An employer reporting retroactive pay can:
Refer to Contribution Rate Changes and Using Status Code A or M for additional restrictions that may apply.
These are examples of how to report a retroactive payment.
Q1: Transcripts received for a part time teacher in October require a retroactive increase due to a new salary placement. No additional service is associated with the pay. The additional pay will be paid out evenly over the remaining school year. How do you report the retroactive payment?
A1: Since there are no additional hours to report, there will be no impact to service credit. The additional compensation can be reported evenly over the working months of the school year with Status Code A.
If the adjustment was paid as a lump sum in October, it could be reported with Status Code M in the month that it was paid.
Q2: A bargaining group negotiates a retroactive adjustment to an hourly rate used to pay a group of employees for the current school year. The adjustment will be paid in July.
A2: Because no additional hours of service are associated with the pay adjustment, report the lump sum adjustment with Status Code M in the last working month, usually June.