Payroll Bulletin No. 2009-001
Payroll Bulletin
On
When employees
are called away from civilian employment to active
military duty and their active-duty military wages are less than the wages from
their civilian job,
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What this means for
Beginning
in January 2009, the differential wage payments (differential military pay)
that individuals serving on active duty in the uniformed services for more than
30 days receive, will be reportable compensation for retirement purposes.
Because
the hourly rate of pay for the differential wage payments is different from the
employee’s normal rate of pay, the Department of Retirement Systems has requested that the county calculate the
associated hours by dividing the differential wage payment by the normal hourly
rate of pay.
For
example, if an employee’s normal salary is $4,000 per
month and he normally works 160 hours per month, his normal rate of pay would
be $25 per hour. If the differential wage payment for a particular
month was $1,000, we would divide the $1,000 by the
hourly rate of $25 to get 40 hours. We would report $1,000 in compensation
and 40 hours to DRS for the employee.
If
the employee is a member of PERS 2 or 3, PSERS 2, or
LEOFF 2 and the reported hours for a month are below 90, the member will get a
partial service credit. The member should contact the Department of Retirement
Systems at 1-800-547-6657 for information about purchasing additional service
credit for the period of interruptive military service.
Beginning
in January 2009, individuals serving on active duty in the uniformed services
for more than 180 days will be given the opportunity to request a cash out of the unused portion of their medical flexible
spending account (FSA).
Any
qualified reservist distribution that is made is
subject to taxes and will be included in the gross income and wages of the
employee. Distributions will be reported on the
employee’s W-2 form for the year in which the distribution is paid.
Requests
must be sent to the Benefits and Retirement Operations
office at 401,