Chapter 4: Reportable Compensation
LEOFF Reportable Compensation
Plan 2 Reportable Compensation
The following types of payments qualify as LEOFF Plan 2 basic salary and are reportable:
- Basic salary
- Deferred wages if earned for services rendered are basic salary. Deferred wages include, but are not limited to:
- Member contributions to LEOFF;
- Salaries or wages deferred according to sections 401(k), 403(b), 414(h), 457 or other similar sections of the US Internal Revenue Code.
- Retroactive basic salary increases received for a pay period that a member worked is a salary or wage for services rendered and is reportable.
- Cafeteria plans-Compensation received in any form under the provisions of a "cafeteria plan," "flexible benefits plan," or similar arrangement according to section 125 of the US Internal Revenue Code is basic salary only if the member can receive cash or deferred payments instead of the fringe benefits.
- Overtime-Additional pay earned for working time in excess of regularly scheduled shift(s) is a salary or wage for services rendered and is reportable. Overtime includes, but is not limited to:
- Additional pay for working on a holiday.
Example:
A fire fighter works on Christmas day. As compensation for working a holiday, the member is given the option of taking some other day off with pay or of receiving an extra day's pay. If the member opts for the extra day of pay, this payment is overtime and is reportable. If the member opts to take a day off, this is paid leave, qualifies as basic salary and is reportable.
- Callback pay for being called back to work;
- Court pay for appearing in court or performing other duties outside of a member's regularly scheduled shift.
- Additional pay for working on a holiday.
- Paid leave-Payments received from an employer for authorized paid absences from work are basic salary for LEOFF Plan 2. Paid leave is basic salary and is reportable only to the extent that it is the equivalent of the basic salary a member would have earned had the member been working. The portion of any payment that exceeds that amount is not basic salary and is not reportable.
Reportable leave payments include:
- Leave payments earned for services rendered
Example:
Assume a member accrues eight hours sick leave per month. The accrued leave in the member's sick leave balance is earned for personal services rendered during a payroll period. When the member is absent from work and uses the sick leave, the sick leave payment is basic salary and is reportable.
- Leave payments earned for services rendered
- Leave payments not earned for services. If an employer authorizes a period of paid leave but does not require the use of leave previously earned for services rendered, the payment is not a salary or wage for services rendered. However, RCW 41.26.520 authorizes service credit for all periods of paid leave. Because the periods are creditable, the pay received is considered basic salary to the extent that it is equal to the basic salary the member would have earned had he or she been working and is reportable.
- Payments upon reinstatement or in lieu of reinstatement are paid leave and qualify as basic salary. The payments are reportable for the payroll periods when the person would have earned the payment had he or she been working.
- In order for a payment in lieu of reinstatement to qualify as paid leave, the person's termination date must occur after the payroll period(s) when the payment would have been earned.
- Payments under WAC 391-45-410 are basic salary for the period(s) covered by the reinstatement.
- Payments upon reinstatement or in lieu of reinstatement are basic salary only to the extent they equal the basic salary a member would have earned had the member been working.
- Union leave-Periods of authorized leave to serve as an elected official of a labor organization which meet the requirements of RCW 41.26.520 qualify for service credit. The salary payments provided by the employer-subject to reimbursement from the union-qualify as basic salary to the extent that they do not exceed the highest paid job class covered by the collective bargaining agreement negotiated between the labor organization and the employer.
- Salary or wages not attached to a position-A salary or wage for services rendered to an employer is basic salary regardless of whether the services are attached to a position.
Example:
If an employee receives additional salary based upon his or her education, that additional salary is basic salary even if his or her position does not require that level of education. The payment of a higher salary based upon education attainment is part of the total compensation for the services provided by the employee.
- Performance bonuses-Payments made for meeting or exceeding performance goals set by an employer are a salary or wage for services rendered and qualify as basic salary. In order to qualify as basic salary, a performance bonus must be documented in an employer policy or specific agreement between the employer and member prior to earning the bonus.
Example:
An employer offers an annual bonus to a member if he or she meets a certain performance goal; e.g., stays accident free for a year. If the member meets the goal and is paid the bonus, the bonus would be considered basic salary.
- Shift differential-Additional payments to a member for working swing shift or night shift are a salary or wage for services rendered. The payments are basic salary and are reportable.
- Disability payments-Under certain circumstances, a LEOFF Plan 2 member is entitled to a disability leave supplement for periods of disability leave. (See RCW 41.04.500-550.) The following types of disability payments are considered basic salary and are reportable to DRS.
- Disability leave supplement-The member-paid portion of the disability leave supplement funded through use of the member's accumulated sick or vacation leave is basic salary and is reportable.
- Disability leave banks-If an employer maintains a disability leave bank which may be used to make salary replacement payments for members during periods of disability, such payments are paid leave and are reportable. (If the leave provided is based upon leave earned by another employee then it is a form of shared leave and is not reportable.)