Memorandum to: All Agency Heads cc



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MEMORANDUM



TO: All Agency Heads
CC: Secretariat CFO’s; Secretariat HR Council; Agency Human Resources Directors; Agency Budget Directors; Agency Payroll Directors




FROM: Ruth N. Bramson, Chief Human Resources Officer



Martin Benison, State Comptroller



DATE: September 20, 2005
RE: Implementation of Chapter 77 of the Acts of 2005 Amending Chapter 137 of the Acts of 2003 Providing Compensation and Other Benefits to Employees of the Commonwealth Called to Active Military Service

We are pleased to announce that on August 26, 2005, Governor Romney signed legislation, Chapter 77 of the Acts of 2005, which amends Chapter 137 of the Acts of 2003 that provided compensation and other benefits to employees of the Commonwealth of Massachusetts who have been called into active military service since September 11, 2001. The legislation is part of an ongoing effort to reduce the economic hardship on our employees who have demonstrated such commitment, courage and dedication. What follows is the coverage of the amended legislation, followed by instructions for implementing this important initiative.



SCOPE OF COVERAGE

The legislation covers all employees of the Commonwealth who have been granted a military leave of absence after September 11, 2001 to serve on active duty in the Army National Guard, the Air National Guard or a reserve component of the armed forces of the United States. The new act applies to all employees called to active service, other than training, after September 11, 2001 through September 11, 2008, regardless of whether or not they are still on active duty as of the enactment of the legislation.


Note: Part time employees are covered but not intermittent or contract employees. Seasonal employees are covered, but only for military duty served during the normal time of their seasonal assignments.


EFFECTIVE DATE OF AMENDED LEGISLATION


This legislation is classified as an emergency law and therefore takes effect immediately and the benefits are retroactive to September 11, 2001.

BENEFITS PROVIDED

The Commonwealth will make provisions for the payment of the difference between the military base pay and the state base pay, if the state base pay is higher for the same pay period.


Military base pay. The amended legislation defines military pay to exclude all allowances, such as housing, uniform, combat pay, spousal allowance, etc. as well as overtime pay, shift differential pay, hazardous duty pay or any other additional compensation received for military service. This differs from Chapter 137 of the Acts of 2003 that defined military pay to include allowances and additional compensation.
Since the new calculation results in a lower amount of military pay being used to calculate the difference in military vs. state base pay, eligible recipients may be entitled to additional or increased benefits as outlined below.
State base pay. The applicable state salary is based on base pay and will not include any additional compensation, such as overtime pay, shift differential, hazardous duty pay, or any other additional compensation. For those paid under the provisions of the Technical Pay Law (TPL), use the TPL salary as the basis for determining the state base pay. Similarly, those paid at salary collision rates should have their collision salary used as the basis for comparison. Holiday pay will also be presumed to be part of the state salary.
No change in Seniority or Accrued Leave or Earned Overtime. In addition, both the original and amended versions of the legislation provide that employees covered by this act shall not lose any seniority or any accrued vacation leave, sick leave, personal leave, compensation time or previously earned overtime.

IMPLICATIONS OF AMENDED LEGISLATION

The 2005 amendment:



  • Instructs agencies to exclude allowances prior to the calculation of the difference between military pay and state pay on a going forward basis effective immediately.

  • Requires that agencies recalculate all amounts previously paid to employees under Chapter 137 of the Acts of 2003 under the new definition of military pay (see above) and pay any additional amounts owed to employees and former employees.

  • Employees that did not apply under Chapter 137 of the Acts of 2003 because their military pay with allowances exceeded their state pay may now be entitled to a pay differential under the new definition of military pay used in the amended legislation and will have to be notified of their possible eligibility under the 2005 amendment.



Funding for Benefits
Separate funding for these benefits has not been appropriated to date. However, given the amount of benefits that may be due based upon the change in legislation, some departments may be faced with potential deficiencies in payroll appropriations to cover these benefits. Therefore, departments should take whatever steps are necessary to try to calculate the total anticipated amounts that may be owed to eligible employees for amounts due from September 11, 2001 through the current fiscal year, and also potential ongoing amounts that may be due for future fiscal years 2007, 2008 and 2009.
Retroactive amounts due for time served between September 11, 2001 to the present will be considered current fiscal year obligations, since the entitlement to the benefit was created in FY2005. Departments that will need additional payroll appropriations for the current fiscal year should immediately contact their budget analysts at the Executive Office for Administration and Finance to pursue appropriate supplemental appropriations. Departments that will need additional payroll funds in FY 2007-2008 should modify spending plans and budget estimates accordingly to reflect these obligations.
INSTRUCTIONS FOR PROCESSING THE PAYMENT OF THE SALARY DIFFERENTIAL
Summary of Process:
The following procedures define tasks required by operating departments to verify compensation while minimizing the reporting burden on the employees and their families.
Notify all Employees with Military Status since September 11, 2001. The attached sample employee notification letter should be tailored under your Department’s letterhead (inserting employee name, address, department payroll address and fax number) and sent to all covered employees as soon as administratively possible. The letter lists the documentation required to process the pay differentials. Also attached is the pay information release form that each covered employee must complete and return.
This letter must be sent to all employees who are/were on military status since

September 11, 2001 regardless of whether they actually went on military leave.
Obtain confirmation of Military Base Pay. The employee, or someone acting on behalf of the employee, must supply documentation detailing the amount of military pay (as newly defined above) received to date. The attached release form gives permission to the Commonwealth (employing agency) to contact the military pay authorities, in situations where the employee is unable to supply the necessary Military Leave and Earnings Statements. These are issued semi-monthly and include most recent earnings under the column marked “ENTITLEMENTS” as well as cumulative year-to-date earnings at the bottom of the form, marked “YTD ENTITLE”. It is preferable, however, for the employee to obtain his/her own documentation and provide it to the operating department.


Procedures for Paying the Salary Differential Going Forward
Step 1. Using the latest semi-monthly Military Leave and Earnings Statement provided by the employee or the employee’s representative, multiply the base by 24 to get annualized military entitlements.
Step 2. Divide the result from step 1 by the employee’s standard number of yearly work hours: 2088 for those who normally work 40-hour weeks, 1957.5 for 37.5-hour weeks.
Step 3. Subtract the result form step 2 from the state hourly rate (base pay only) found on the Compensation Page in HR/CMS to get the hourly differential.
Step 4. Multiply the result from step 3 by the employee’s standard number of biweekly hours to get the biweekly pay differential.
Step 5. On the Additional Pay page, enter the current pay period effective date, using Earnings Code “MLP” (Military Leave Pay) with an End Date corresponding to the projected end of the tour of duty.
Step 6. Repeat step 1-5 if the military or state pay changes. The employee is obligated to notify payroll authorities of any change in military pay or allowances.

Note: MLP earnings code will be available before the end of the next pay period. Operating Departments should keep accurate records of all payments made to employees under these instructions, including back-up supporting documentation.

If an employee is to receive differential earnings before the code is available, please use “ROR” (Retroactive Regular). These entries can be adjusted later using LCM Labor Adjustment Requests (LARQ).


Procedures for Paying the Retroactive Salary Differential
Step 1. Collect all monthly military pay statements from the start of active duty (as far back as 9/11/01) to the end or through the most recently issued statement if still on active duty.
Step 2. Calculate the total base military pay (as defined above to exclude all allowances, such as housing, uniform, combat pay, spousal allowance, etc. as well as overtime pay, shift differential pay, hazardous duty pay or any other additional compensation received for military service) using the semi-monthly Military Leave and Earnings Statements (LES) provided by the employee or employee’s representative.
If LES statements are not available, an acceptable alternative is a letter from the Active Duty Department of the particular service branch in which the employee was enlisted (contact information can be obtained by calling the Customer Service line of the Defense Finance & Accounting Service- (800-332-7411). These letters take about a month to obtain and will be faxed to the employee upon request.
Step 3. For the dates of active military duty, calculate the total base pay the employee would have received had he/she not been called to active duty.
Step 4. Subtract the amount from step 2 from the result of step 3.
Step 5. For the dates of active military duty, subtract the amounts previously paid (if any) to the employee from the result of step 4.
Step 6. On the Additional Pay page in HRCMS, enter current pay period effective date, earnings code” “MLP” (Military Pay) with an end date corresponding to the end date of the current pay period. Enter the Goal Amount equal to the amount of the retroactive payment.
Note:

  • MLP earnings code will be available before the end of the next pay period. Operating Departments should keep accurate records of all payments made to employees under these instructions, including back-up supporting documentation. If an employee is to receive differential earnings before the code is available, please use “ROR” (Retroactive Regular). These entries can be adjusted later using LCM Labor Adjustment Requests (LARQ)




  • When new earnings code “MLP” is available, it will be used to track and account for these expenditures. This information will also be critical if an agency needs to request additional funding to pay for this entitlement in future fiscal years 2007, 2008 and 2009.

HR/CMS INSTRUCTIONS



For employees who are currently on military leave


  1. To process payments under this act, place the employee on a paid leave of absence and enter the following:


Effective Date: Use the Sunday begin date in the current pay period.

Action: PLA (Paid Leave of Absence)

Reason: MIL (Military Leave)
2) Make sure to “zero out” the employee's default schedule in Time Reporter Data.
Effective Date: Use the following Sunday as the begin date

Tip: In weekly elapsed time, manually remove REG hours for the current pay period
3) End all Additional Pay Earnings.
Effective Date/End Date: Use a date in the previous pay period.
4) Refer to the above listed Procedures for Paying the Salary Differential to calculate the employee’s retroactive payment.
5) Enter the amount owed in Additional Pay using the MLP Earnings Code for the biweekly difference of pay to be used on a go-forward basis.
Effective Date: Use the Sunday begin date in the current pay period with an end date corresponding to the projected end of the tour of duty.
6) Refer to the above listed Procedures for Paying the Retroactive Salary Differential to calculate the employee’s retroactive payment.
7) Enter the amount owed in Additional Pay using the MLP Earnings Code.

Effective Date: Use the Sunday begin date in the current pay period with an end and

goal amount equal to the retroactive payment.




  1. View and confirm the paycheck data the day following data entry.



Additional Instructions:


  • Keep all leave plans active so that the employee will receive monthly accruals.




  • Keep all deductions active unless the employee has asked to end or change a deduction.




  • For employees who were out on military leave but have returned, please follow steps 6, 7, and 8 only.




  • If an employee has terminated, (s)he should be rehired to pay out the retroactive payment owed using the MLP code in additional pay.

Please direct any questions regarding HR/CMS to Commonhelp at 866-888-2808. Any policy questions regarding this memorandum should be directed to Larry Albert, Policy Developer, HRD using the following link: larry.albert@hrd.state.ma.us





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