Senate Bill (SB) 6157 was passed by the 2009 legislature. It allowed any compensation forgone by a Public Employees’ Retirement System (PERS) member, due to a furlough during the 2009-2011 biennium, to be included in the average final compensation calculation of that member’s retirement benefit. The qualifying factors are a reduction in hours and salary and the furlough must have been an integral part of the employer’s efforts to reduce expenditures.
SB 6503 was passed by the 2010 legislature and added members of the Teachers’ Retirement System (TRS), Washington State Patrol Retirement System (WSPRS), Law Enforcement Officers’ and Fire Fighters’ Retirement System, (LEOFF), and Public Safety Employees’ Retirement System (PSERS) who work for State Agencies or Institutions of Higher Education.
A furlough is a reduction in work hours and a corresponding reduction in salary. The term would also apply if an individual took a voluntary leave without pay as part of an employer’s expenditure reduction efforts.
All members of PERS.
Members of TRS, WSPRS, LEOFF, and PSERS who work for State Agencies or Institutions of Higher Education.
The member must have all or part of the 2009-2011 biennium in their average final compensation (AFC) time period.
Employers should report actual hours worked and compensation paid. If DRS determines that the 09-11 biennium could impact a member’s AFC period, the employer will be asked to verify the use of furloughs as part of an expenditure reduction effort. Also, the employer will be asked for the amount of compensation foregone by an employee due to the furlough, the hours that would have been worked and the period in which the work would have taken place. DRS is not prescribing the documentation employers should keep on the furloughs. This may be done by employer resolution, documentation in an employee’s personnel file, or any other method that will allow an employer to respond to future requests.
SB 6157 and SB 6503 provides only for lost compensation due to a furlough, it does not grant service credit.
Ben’s employer determines that its expenditure reduction efforts during the 2009-2011 biennium will include reducing Ben’s work hours. Ben is a fulltime employee earning $3,000 and will be subject to two furlough days per month for six months. If this period falls within Ben’s average final compensation period will it qualify under the law?
City of Summerville decides to give all of their employees a 2.5% cost of living increase instead of 5.0% they had hoped to give as a part of their expenditure reduction effort. Would this reduction qualify under the law?
No, this is not a reduction of salary and hours.
What other budget reduction situations generally will not qualify as a furlough under these provisions?
Should you have questions, please reply to this notice or call Employer Support Services at 360-664-7200 (option 2) or 1-800-547-6657 (option 6 then option 2).
Assistant Director of Administrative Services