CHAPTER 3: OTHER ADMINISTRATIVE REGULATIONS

Return to CHAPTER 3: OTHER ADMINISTRATIVE REGULATIONS

SUBSECTION 4.3.2.3
WAGE COMPUTATIONS

4.3.2.3.1

Lagged Payroll

Effective Date:

July 1, 1995

RCW 42.16.010 establishes semi-monthly pay periods as a basis for paying all state officers and employees. The first pay period is from the first to the fifteenth of the month. The second pay period is from the sixteenth through the last calendar day of the month. Actual paydates are lagged but cannot be later than ten days following the close of each pay period, except when the paydate falls on a Sunday. In this case, the paydate is the following Monday. OFM establishes the paydates through WAC 82-50-021.

4.3.2.3.2

Paydates

Effective Date:

July 1, 1995

4.3.2.3.2.a
Semi-monthly paydates

Agencies shall pay the salaries of all state officers and employees on the semi-monthly paydates identified in WAC 82-50-021.

4.3.2.3.2.b
Exceptions

An agency may request in writing, and the Director (or official designee) of OFM may grant in writing, paydate exceptions in the following instances:

4.3.2.3.2.b(1)

For short-term periodic, non-career state employees;

4.3.2.3.2.b(2)

For student employees of colleges and universities;

4.3.2.3.2.b(3)

For liquor control agency managers who receive a percentage of monthly liquor sales as part of their compensation; and

4.3.2.3.2.b(4)

For a pay schedule of shorter duration than the official paydates established in WAC 82-50-021 provided that:

The agency still maintains a lagged, semi-monthly payroll, and
The official pay periods established by RCW 43.16.010(1) must be in effect.

4.3.2.3.2.c
Termination of Exceptions

The Director (or official designee) of OFM may terminate any paydate exceptions. (See RCW 42.16.010(2).)

4.3.2.3.2.c(1)

The termination notice from the Director (or official designee) of OFM to the agency head must be in writing.

4.3.2.3.2.c(2)

The agency head shall receive the notice by July 1.

4.3.2.3.2.c(3)

The agency shall conform to WAC 82-50-021 on January 1 of the following year.

4.3.2.3.2.d
RCW 42.16.010 permits agencies to pay overtime, penalty pay, and special pay on the next paydate if:

4.3.2.3.2.d(1)

The employee fails to make an accurate and timely report of the information needed to determine the payment; or,

4.3.2.3.2.d(2)

The employer lacks reasonable opportunity to verify the claim.

4.3.2.3.3

Pay Period, Workdays, and Rate Computations

Effective Date:

July 1, 1995

4.3.2.3.3.a

Full-Time Employees

When employees work a full semi-monthly pay period (RCW 42.16.010 and WAC 82-50-021), their pay rate shall be one-half of the actual monthly gross pay. Time worked, for gross pay computations, includes paid leave and holidays.

Exceptions: Gross pay computations for full-time employees change when they work less than a full semi-monthly pay period, are on a leave-without-pay status, or their pay rate changes during the pay period.

4.3.2.3.3.a(1)
Compute gross pay by:

Calculating the ratio of time worked in days or hours to the scheduled time available for work in days or hours for that pay period.
Scheduled time available for work includes paid leave and holidays.
In cases of promotion or demotion, two calculations are done--one for each salary level. Both calculations are based on the percentage of the days or hours worked to total days or hours available for the pay period at each salary level.
In addition to basic salary, gross pay includes remuneration for all other compensable services and available to employees on designated paydates (RCW 42.16.010). See Section 4.3.2.3.2(d) for a paydate exception provided by that statute.

Other compensable services include overtime, assignment pay, call-back, standby, compensatory time, shift differential premium, Washington Management Services recognition payments, and other special pay provisions as provided for by law, personnel board rules, agency policy or rule, or contract.

4.3.2.3.3.a(2)

Use the following formula to compute pay for fractional semi-monthly pay periods:

Gross

Actual Time (Hours/Days) Worked in Semi-monthly Pay Period

X

Monthly Salary Rate

Pay

=

Scheduled Work Time (Hours/Days) Available

2

In Semi-Monthly Pay Period

Example: If an employee with a monthly rate of $2,400 works 24 hours in a pay period containing 88 scheduled working hours, the pay would be computed as follows:

	24	x	$2,400	=	$327.27
	88		2

	In the case of a promotion from $2,400 to $2,800 a month, effective on the third work day in the pay period, two calculations are required using the appropriate actual hours and pay rates:
	First Computation:

	16	x	$2,400	=	$218.18	(Payment for first two days of pay period)
	88		2

Second Computation:

72

x

$2,800

=

$1,145.45

(Payment for first two days of pay period)

88

2

Total gross:

$218.18

+

$1,145.45

=

$1,363.63

(Total payment for pay period)

4.3.2.3.3.a.3
Colleges and Universities

With written OFM approval, colleges and universities may use the employee’s annualized straight time hourly pay rate for calculating leave-without-pay salary reductions. The annualized hourly rate is determined by dividing the monthly rate by 174, the average number of working hours during a month. If an institution of higher education historically has used an average number of monthly working hours rate other than 174, written OFM approval is required to continue using the other rate.

4.3.2.3.3.a.4
State Elected Officials

Use calendar days, including all holidays or workdays, when computing a partial pay period for elected state officials.

Gross

Calendar Days To Pay in Semi-monthly Pay Period

X

Monthly Salary Rate

Pay

=

Calendar Days in Semi-Monthly Pay Period

2

4.3.2.3.3.b
Employees Paid on an Hourly Basis

Compute employees’ gross pay by multiplying the hours worked in the semi-monthly pay period times their hourly pay rate. The gross pay computation includes paid leave, if eligible.

Gross Pay

Actual Hours Worked

X

Hourly Rate

Example: 25 hours worked X $10.00 hourly rate = $250.00

Holidays are paid proportionate to the amount of time in pay status during the month to that required for full-time employment, if eligible (WAC 356-18-030 and WAC 251-22-040).

Gross Total Month's Actual Hours Worked*X 8 X Hourly Rate

Holiday
=
Total Month's Work Hours Available*

Example: An hourly employee worked 90 hours (excluding annual and sick leave) out of 175 hours (includes 1 holiday) for the month of May 1 - 30, 19xx. The hourly rate is $10.00. During this period the employee took one day each of annual leave and sick leave.

90 actual hours worked + 8 hours annual leave taken + 8 hours sick leave taken = 106 hours. Total month’s work hours available: 175 Hours - 8 hours (holiday) = 167 hours.

Regular pay:

106 hours

x

$10.00

=

$1,060.00

Holiday pay:

106/167 hours

x 8 x

$10.00

=

$ 50.78

Total pay:

=

$1,110.78

4.3.2.3.3.c
Payments to Commissioners and Board Members

Commissioners and board members are classified in four groups.

4.3.2.3.3.c(1)
Members of a Class 1 Group

These members are volunteers and do not receive any compensation. Contact the Department of Labor and Industries regarding the appropriateness of medical aid coverage for these volunteers. Refer to RCW 51.12.035.

4.3.2.3.3.c(2)
Members of a Class 2, 3, or 4 Group

Consider members of a Class 2, 3, or 4 group as state employees and process their compensation through the payroll system. (See RCW 43.03.220 for group definitions.) For purposes of FTE computation, each day of pay is considered equal to eight hours.

4.3.2.3.3.c(3)
Compensation

Class 2, 3, or 4 groups employees qualify for compensation for each calendar day they attend official group meetings and/or perform statutory duties approved by their chairperson. Maximum daily rates are defined in RCW 43.03.230 through 43.03.250. A calendar day of compensation includes all meetings or work performed on that day, regardless of how many hours worked or meetings attended. Compensation may only be paid to a member if it is authorized under the law dealing with the specific group to which a member belongs or dealing in particular with members of the specific group.

4.3.2.3.3.c(4)
Exception

If a member is employed full-time by the federal government, any Washington State agency, or local governments and receives any compensation from such government for working that day, the member is ineligible for compensation as a board or commission member.

Administering agencies of the Boards or Commissions are to require a written statement from the public employers that no compensation for work was paid for the same days a board or commission paid the member.

4.3.2.3.3.c(5)
Expenditure Object Coding

These payments are coded to Subobject AE--State Special.

4.3.2.3.3.c(6)
The following taxes apply to the compensation paid to Class 2, 3, and 4 group members:

Federal Withholding Tax using the Daily or Miscellaneous Tax Table.
OASI and Medicare--Deduct the employee's portion of OASI and Medicare contributions.
Labor and Industries--Labor and Industry programs cover all compensated members of Class 2, 3, and 4 groups.
Contact Membership Services of the Department of Retirement Systems for information regarding the appropriateness of retirement contributions.

4.3.2.3.4

Taxable Fringe Benefits

Effective Date:

July 1, 1995

Any property or service that an employee receives from an employer in place of or along with regular wages is a fringe benefit that may be subject to federal employment taxes. If taxable, these benefits are included in gross income and subject to federal income, OASI, and Medicare taxes. Refer to IRS regulations for the appropriate year regarding specific information.

Possible taxable fringe benefits include but are not limited to:

Commuter portion of agency provided vehicles
Certain clothing allowances
Reimbursement or payment of some moving expenses
Certain awards (all cash or cash equivalent awards are taxable)
Educational assistance
Unspent, unreturned travel advances

Contact Membership Services of the Department of Retirement Systems to determine which, if any, fringe benefits are included in earnable compensation for retirement purposes.

Return to CHAPTER 3: OTHER ADMINISTRATIVE REGULATIONS

4.3.2.3.2.a	Semi-monthly paydates
	Agencies shall pay the salaries of all state officers and employees on the semi-monthly paydates identified in WAC 82-50-021.
4.3.2.3.2.b	Exceptions
	An agency may request in writing, and the Director (or official designee) of OFM may grant in writing, paydate exceptions in the following instances:
4.3.2.3.2.b(1)	For short-term periodic, non-career state employees;
4.3.2.3.2.b(2)	For student employees of colleges and universities;
4.3.2.3.2.b(3)	For liquor control agency managers who receive a percentage of monthly liquor sales as part of their compensation; and
4.3.2.3.2.b(4)	For a pay schedule of shorter duration than the official paydates established in WAC 82-50-021 provided that:
	The agency still maintains a lagged, semi-monthly payroll, and The official pay periods established by RCW 43.16.010(1) must be in effect.
4.3.2.3.2.c	Termination of Exceptions
	The Director (or official designee) of OFM may terminate any paydate exceptions. (See RCW 42.16.010(2).)
4.3.2.3.2.c(1)	The termination notice from the Director (or official designee) of OFM to the agency head must be in writing.
4.3.2.3.2.c(2)	The agency head shall receive the notice by July 1.
4.3.2.3.2.c(3)	The agency shall conform to WAC 82-50-021 on January 1 of the following year.
4.3.2.3.2.d	RCW 42.16.010 permits agencies to pay overtime, penalty pay, and special pay on the next paydate if:
4.3.2.3.2.d(1)	The employee fails to make an accurate and timely report of the information needed to determine the payment; or,
4.3.2.3.2.d(2)	The employer lacks reasonable opportunity to verify the claim.

4.3.2.3.3.a	Full-Time Employees
	When employees work a full semi-monthly pay period (RCW 42.16.010 and WAC 82-50-021), their pay rate shall be one-half of the actual monthly gross pay. Time worked, for gross pay computations, includes paid leave and holidays.
	Exceptions: *Gross pay computations for full-time employees change when they work less than a full semi-monthly pay period, are on a leave-without-pay status, or their pay rate changes during the pay period.*
4.3.2.3.3.a(1)	Compute gross pay by:
	Calculating the ratio of time worked in days or hours to the scheduled time available for work in days or hours for that pay period. Scheduled time available for work includes paid leave and holidays. In cases of promotion or demotion, two calculations are done--one for each salary level. Both calculations are based on the percentage of the days or hours worked to total days or hours available for the pay period at each salary level. In addition to basic salary, gross pay includes remuneration for all other compensable services and available to employees on designated paydates (RCW 42.16.010). See Section 4.3.2.3.2(d) for a paydate exception provided by that statute.
	Other compensable services include overtime, assignment pay, call-back, standby, compensatory time, shift differential premium, Washington Management Services recognition payments, and other special pay provisions as provided for by law, personnel board rules, agency policy or rule, or contract.
4.3.2.3.3.a(2)	Use the following formula to compute pay for fractional semi-monthly pay periods:

Gross		Actual Time (Hours/Days) Worked in Semi-monthly Pay Period	X	Monthly Salary Rate
Pay	=	Scheduled Work Time (Hours/Days) Available		2
		In Semi-Monthly Pay Period

	72	x	$2,800	=	$1,145.45	(Payment for first two days of pay period)
	88		2

4.3.2.3.3.a.3	Colleges and Universities
	With written OFM approval, colleges and universities may use the employee’s annualized straight time hourly pay rate for calculating leave-without-pay salary reductions. The annualized hourly rate is determined by dividing the monthly rate by 174, the average number of working hours during a month. If an institution of higher education historically has used an average number of monthly working hours rate other than 174, written OFM approval is required to continue using the other rate.
4.3.2.3.3.a.4	State Elected Officials
	Use calendar days, including all holidays or workdays, when computing a partial pay period for elected state officials.

	Gross		Calendar Days To Pay in Semi-monthly Pay Period	X	Monthly Salary Rate
	Pay	=	Calendar Days in Semi-Monthly Pay Period		2

4.3.2.3.3.b	Employees Paid on an Hourly Basis
	Compute employees’ gross pay by multiplying the hours worked in the semi-monthly pay period times their hourly pay rate. The gross pay computation includes paid leave, if eligible.

	Example: 25 hours worked X $10.00 hourly rate = $250.00
	Holidays are paid proportionate to the amount of time in pay status during the month to that required for full-time employment, if eligible (WAC 356-18-030 and WAC 251-22-040).

	Gross		**Total Month's Actual Hours WorkedX 8 X Hourly Rate***
	Holiday	=	Total Month's Work Hours Available*

	Example: An hourly employee worked 90 hours (excluding annual and sick leave) out of 175 hours (includes 1 holiday) for the month of May 1 - 30, 19xx. The hourly rate is $10.00. During this period the employee took one day each of annual leave and sick leave.
	90 actual hours worked + 8 hours annual leave taken + 8 hours sick leave taken = 106 hours. Total month’s work hours available: 175 Hours - 8 hours (holiday) = 167 hours.

Regular pay:	106 hours	x	$10.00	=	$1,060.00
Holiday pay:	106/167 hours	x 8 x	$10.00	=	$ 50.78
Total pay:				=	$1,110.78

4.3.2.3.3.c	Payments to Commissioners and Board Members
	Commissioners and board members are classified in four groups.
4.3.2.3.3.c(1)	Members of a Class 1 Group
	These members are volunteers and do not receive any compensation. Contact the Department of Labor and Industries regarding the appropriateness of medical aid coverage for these volunteers. Refer to RCW 51.12.035.
4.3.2.3.3.c(2)	Members of a Class 2, 3, or 4 Group
	Consider members of a Class 2, 3, or 4 group as state employees and process their compensation through the payroll system. (See RCW 43.03.220 for group definitions.) For purposes of FTE computation, each day of pay is considered equal to eight hours.
4.3.2.3.3.c(3)	Compensation
	Class 2, 3, or 4 groups employees qualify for compensation for each calendar day they attend official group meetings and/or perform statutory duties approved by their chairperson. Maximum daily rates are defined in RCW 43.03.230 through 43.03.250. A calendar day of compensation includes all meetings or work performed on that day, regardless of how many hours worked or meetings attended. Compensation may only be paid to a member if it is authorized under the law dealing with the specific group to which a member belongs or dealing in particular with members of the specific group.
4.3.2.3.3.c(4)	Exception
	If a member is employed full-time by the federal government, any Washington State agency, or local governments and receives any compensation from such government for working that day, the member is ineligible for compensation as a board or commission member.
	Administering agencies of the Boards or Commissions are to require a written statement from the public employers that no compensation for work was paid for the same days a board or commission paid the member.
4.3.2.3.3.c(5)	Expenditure Object Coding
	These payments are coded to Subobject AE--State Special.
4.3.2.3.3.c(6)	The following taxes apply to the compensation paid to Class 2, 3, and 4 group members:
	Federal Withholding Tax using the Daily or Miscellaneous Tax Table. OASI and Medicare--Deduct the employee's portion of OASI and Medicare contributions. Labor and Industries--Labor and Industry programs cover all compensated members of Class 2, 3, and 4 groups. Contact Membership Services of the Department of Retirement Systems for information regarding the appropriateness of retirement contributions.

	Any property or service that an employee receives from an employer in place of or along with regular wages is a fringe benefit that may be subject to federal employment taxes. If taxable, these benefits are included in gross income and subject to federal income, OASI, and Medicare taxes. Refer to IRS regulations for the appropriate year regarding specific information.
	Possible taxable fringe benefits include but are not limited to:
	Commuter portion of agency provided vehicles Certain clothing allowances Reimbursement or payment of some moving expenses Certain awards (all cash or cash equivalent awards are taxable) Educational assistance Unspent, unreturned travel advances
	Contact Membership Services of the Department of Retirement Systems to determine which, if any, fringe benefits are included in earnable compensation for retirement purposes.