Chapter 5: Special Conditions
School District and Educational Service District Pay Adjustments
Retroactive Pay
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:
- break the payment into the specific earning periods and report to DRS with a Status Code A as earned; or
- If the retroactive pay adjustment is paid equally over the remaining months of the school year, report the additional compensation as paid with a Status Code A. The pay cannot be reported in months that the employee did not work, usually July or August; or
- If the adjustment is paid as a lump sum, it can be reported with Status Code M in the month in which it is paid. If paid in July or August, report the lump sum in the last month of work for the employee, usually June.
Refer to Contribution Rate Changes and Using Status Code A or M for additional restrictions that may apply.
Questions and Answers
These are examples of how to report a retroactive payment.
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?
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.
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.
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.