Chapter 4: Reportable Compensation

LEOFF Reportable Compensation

Plan 1 Not Reportable Compensation

The following are payment types that are not considered basic salary and are not reportable to DRS for LEOFF Plan 1:

1. Deferred wages not attached to a position are special salary or wages and are excluded from LEOFF Plan 1 basic salary.
   • Employer matching payments are not basic salary.

     Example:

     An employer offers to contribute to a deferred compensation plan only if the member elects to defer a portion of his or her salary. Because the member does not have an absolute right to receive the additional contribution for performing the duties required of his or her position, the payment is special salary and is not reportable.

   • Additional deferred compensation offered to an individual is not basic salary. This is a special salary or wage and is not reportable.
2. Educational premium payments-If an employer provides additional salary based upon the member's level of education, it is a special salary or wage and is not reportable.

   Example:

   An employer employs two different law enforcement officers in the position of sergeant. Although their duties are the same, one sergeant receives 3 percent more salary because he or she has a bachelor's degree, which the other lacks. The additional 3 percent is not attached to the position because it is not attached to any additional duties. It is not basic salary.

   • Payments conditioned upon acquiring and maintaining a designated certification such as emergency medical technician are a form of educational premium pay. It is a special salary or wage and is not reportable.
3. Cafeteria plans-Compensation paid under the provisions of a "cafeteria plan," "flexible benefits plan," or similar arrangement, according to the provisions of section 125 of the US Internal Revenue Code is a special salary or wage and is not reportable.
4. Leave cash outs or other severance pay are not reportable.
   • A cash out for unused accrued leave is a deferred salary. Cash out for unused accrued leave is a deferred salary or wage for services previously rendered. In LEOFF Plan 1, the payment is not basic salary but a special salary or wage and is not reportable.
   • Any form of severance pay based upon termination is not reportable.
5. Overtime, which is additional pay earned for working time in excess of regularly scheduled shift(s), is specifically excluded from basic salary for LEOFF Plan 1 and is not reportable.
6. Additional pay for working a holiday is considered overtime and is not reportable.
7. Callback pay is a special rate of pay for being called back to work and is not reportable.
8. Court pay is an additional payment for appearing in court or performing other duties outside of a member's regularly scheduled shift and is not reportable.
9. Deferred payments not attached to a position are not reportable.
10. Disability payments-Payments from an employer during periods of disability leave are not payments for services rendered and are not reportable.
11. Third party payments such as payments from an insurance company are not reportable.
12. Employer-paid taxes and employer-paid retirement contributions are not salary or wages and are not reportable.
13. Fringe benefits provided by an employer such as insurance premiums are not reportable.
14. Illegal payments are not basic salary and are not reportable.
15. Reimbursements or allowances in lieu of a reimbursement are not reportable.

    Example:

    An employer provides an annual stipend for the purchase of a uniform or other clothing required for the performance of a member's duties. The payment is a reimbursement for expenses incurred or expected to be incurred and is not basic salary.

16. Payments based on additional certification or qualifications-If a member receives payments based upon personal expenses incurred in maintaining a certification or qualification, the payment is reimbursement, not compensation, and is not reportable.
17. Standby pay-payment for time not actually worked when the member must be available to work if the need arises, is not reportable.

    Example:

    Some employers provide payments to a member at less than the member's regular hourly rate in exchange for the member being available to come into work after his or her shift if called. These payments are not basic salary.

18. Retirement or termination bonuses are not reportable.
    • Additional payments based fully or partially on notification of a member's intent to terminate or retire are not a salary for services rendered and are not reportable.
    • Payments based on retirement eligibility are specific to a member and are not attached to the position. These payments are not reportable.
19. Payments in lieu-A payment or any other transfer in lieu of an item that does not qualify as basic salary is not reportable.