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4.04: Special situations

4.04: Special situations

This section lists and explains types of compensation that require extra information to decide whether they are reportable.

Additional duties
Cafeteria plans (flexible spending accounts and flexible benefit accounts)
Other payments
Settlements, arbitration awards, tenure commission ruling, court orders, grievances
Stipends
Tax-sheltered annuity investments

 

Additional duties

Sometimes salary increases are intended to provide additional compensation to employees who have taken on additional duties and responsibilities (not resulting from an increase in volume of the same duties). Yet the additional duties are not enough to warrant reclassification to a higher job grade level or a different title. Additional duties are considered reportable compensation if both the following criteria are met:

  • The additional duties taken on are not compensated for in the normal base salary.
  • The payment is not resulting from an increase in volume of the same duties.

Example of reportable additional duties: A payroll officer assumes supervisor responsibilities for office staff during an unexpected leave by a school business official. A teacher substitutes in another classroom during a prep hour.

Example of nonreportable additional duties: A reporting unit adds a Young 5 program and the payroll officer is now processing payroll for 20 additional employees. A teacher receives additional compensation for an increase in students in the classroom. This additional work is an increase in volume of the same duties and is therefore nonreportable.

Contact ORS if you have any questions about the reportability of a payment.

Last updated: 11/01/2018

Cafeteria plans (flexible spending accounts and flexible benefit plans)

Several types of deferred savings plans provided by Section 125 of the IRS code fall under the very broad category of "cafeteria plans." Some of the items in Section 125 are reportable for retirement and others are not. Items of deferred compensation are reportable compensation under the retirement act, but fringe benefits are not. 

  • A flexible spending account - in which the employee's pretax dollars are set aside annually to be used for anticipated expenses - is reportable. In a flexible spending account, money is deducted from the employee's wages, and the employee determines the amount to be deducted. Money that is not paid in lieu of a fringe benefit and is tax-deferred is reportable, even though it is not subject to FICA or FUTA (unemployment tax).
  • A flexible benefit plan - in which employees select from benefit options provided by the employer - is nonreportable. This is also true for a flexible benefit plan in which only the healthcare benefit has several choice options. A flexible benefit plan is a way of providing fringe benefits, and retirement law does not consider fringe benefits (or cash received in lieu of a fringe benefit) to be reportable.

If your reporting unit offers a benefit plan defined by Section 125 that does not fit into any of these choices, please contact ORS Employer Reporting. We will review the plan and determine whether the payments are reportable.

Last updated: 02/10/2017

Other payments

"Other payments" are defined as compensation in addition to base salary paid. This compensation may be specific dollar amounts or a percentage of an employee's salary. Depending on their characteristics, these payments may or may not be reportable. An explanation of the payment should be included in the contract or bargaining agreement. Please contact ORS if you have any questions about the reportability of a payment. Some examples of other payments that are reportable or nonreportable are given below:

Examples of reportable "other payments"

  • A payment given in lieu of a step increase to all members of a bargaining unit who were at the top of the salary schedule. Payment can be given either as a one-time lump-sum payment or over a defined period. The payment can be given as a dollar amount or percentage of pay, and it must be included in the contract.
  • A payment given in lieu of a cost of living adjustment added to base salary. Payment can be given either as a one-time lump-sum payment or over a defined period. The payment can be given as a dollar amount or percentage of pay, and it must be included in the contract.
  • A payment tied to a surplus of funds available at the end of the year or tied to an increase in student enrollment, which is documented in advance in the contract.

Examples of nonreportable "other payments"

A payment tied to a surplus of funds available at the end of the year or tied to an increase in student enrollment, which is not documented in the contract. This includes one-time lump-sum payments as well as payments made over a defined period.

  • A payment that is unexplained, without definition, or without an expectation or a performance objective noted in the contract or union agreement.

Last updated: 02/12/2019

Settlements, arbitration awards, tenure-commission ruling, court orders

The retirement act grants credit when a member works and is compensated for personal services performed as a reporting unit employee. Sometimes there are situations in which service credit is granted when no service has been performed or reported. The retirement system may grant service credit when it is clear that an opinion issued by an objective third party indicates that the employer engaged in a wrongful action and the member is to be "made whole" for lost wages and/or benefits.

Do not report the amount of any settlement payment on your retirement detail report. Send a complete copy of all documents (with signatures) related to the decision, including the original grievance and the ruling, award, or settlement to ORS for a determination.

If ORS determines in its final disposition of the case that the credit can be recognized for retirement purposes, ORS will ask your reporting unit to submit wage and service information for the period in question. Once the adjustment has been made to the employee's retirement account, the employer account will be adjusted to reflect the additional employer contributions and member contributions (if applicable). These amounts will show on the employer statement. The employer will be responsible for collecting any member contributions due from the employee.

Examples of wrongful actions include but are not limited to:

  • Improper, unlawful, or unjustified termination of employment.
  • Improper layoff or improper recall from layoff.
  • Improper placement in a position.
  • Improper compensation for services rendered.

Last updated: 02/10/2017

Stipends

In order for a stipend to be considered reportable compensation, the reporting unit must describe it in detail so that ORS can determine whether it is remuneration for services rendered by the employee. Please contact ORS for a determination on the reportability of a stipend payment.

Last updated: 02/10/2017

Tax-sheltered annuity (TSA) investments or deferred compensation

Employee contributions to an elective tax-sheltered annuity (TSA) or a deferred contribution plan are reportable compensation.

An employer payment made to a TSA may or may not be reportable, depending on the specific reason for the payment.

If an employer contributes to a TSA on behalf of an employee as a form of compensation that would normally be considered reportable, the TSA payment is reportable.

Examples of TSA payments that are reportable include but are not limited to:

  • Salary or wages.
  • Longevity pay.
  • Merit pay.

If an employer contributes to a TSA on behalf of an employee for compensation that would normally be considered nonreportable, the TSA payment is nonreportable.

Examples of TSA payments that are nonreportable include but are not limited to:

  • Payment in lieu of insurance premiums.
  • Payment for other fringe benefits excluded from the definition of reportable compensation.
  • Payment that is an employer match of employee contributions to TSA.

Last updated: 01/06/2021