CHAPTER 3: OTHER ADMINISTRATIVE REGULATIONS

Semi-monthly Salary

Actual Hourly Rate

Hours Available For Pay Period

When Time Loss Payment Made

Time Loss Compensation Payment Dollar Value

Amount of Sick Leave

Actual Hourly Rate During Payment Period

Hours to be restored

(nearest 10^th of an hour)

Return to CHAPTER 3: OTHER ADMINISTRATIVE REGULATIONS

SUBSECTION 4.3.2.4
LEAVE

4.3.2.4.1

Shared Leave

Effective Date:

July 1, 1995

4.3.2.4.1.a	General Guidelines
	This program allows a state employee to donate annual leave to another state employee to use for sick leave purposes. When taken, this leave is classified as Shared Leave and tracked separately over the state career of the recipient employee (donee). RCW 41.04.650 through 41.04.670 describe the program as follows:
	". . .state employees. . .to come to the aid of a fellow state employee who is suffering from or has a relative or household member suffering from an extraordinary or severe illness, injury, impairment, or physical or mental condition which has caused or is likely to cause the employee to take leave without pay or terminate his or her employment."
	Under the authority in Chapter 82-54 WAC, OFM establishes shared leave regulations. These regulations apply to state agencies transferring leave under this program. WAC 356-18-112 and WAC 251-22-250 through 300 establish the definition and eligibility requirements for the Shared Leave Program for employees. Per WAC 356-18-112, an employee is eligible to request participation when the employee (donor or donee) is able to use accrued vacation leave.
	Within these rules, the head of each agency decides the agency’s level of participation in the program. The agency also establishes appropriate policies encompassing these regulations and sets the internal procedures used in managing the program.
4.3.2.4.1.b	Definitions
4.3.2.4.1.b(1)	Employee¾ Any employee entitled to accrue sick leave or annual leave and for whom an agency has maintained leave records.
4.3.2.4.1.b(2)	Donor—The employee making the donation of leave.
4.3.2.4.1.b(3)	Donee—The employee receiving the donation of leave (recipient).
4.3.2.4.1.b(4)	Donated Leave¾ The dollar value of the hours of leave a donor donates through the Shared Leave Program.
4.3.2.4.1.b(5)	Shared Leave¾ The donated leave converted to hours by the receiving agency at the donee’s rate of pay. This may be more or less than the literal hours donated depending on the relative salary rates of the respective employees.
4.3.2.4.1.c	Shared Leave Program Requirements and Restrictions
4.3.2.4.1.c(1)	Salaries and Wages
	Employees on shared leave continue to receive the same salary, wage, and employee benefits that they normally receive when using annual or sick leave. (See RCW 41.04.665(7).)
4.3.2.4.1.c(2)	Shared Leave Requester
	An employee (also a relative or household member) requesting shared leave shall submit a medical statement supporting the request. A licensed physician (or health care practitioner) should:
	Verify the severity or extraordinary nature of the condition; and,
	The expected duration of the condition.
	The certificate is valid through the expected duration of the condition and can be extended if necessary. (See WAC 356-18-112 and WAC 251-22-270.)
4.3.2.4.1.c(3)	Minimum annual leave balances
	Employees may donate annual leave if this does not cause their annual leave balance to fall below eighty hours.
	Exception: RCW 41.04.665 allows employees of a community college who do not accrue annual leave but do accrue sick leave to donate sick leave. This donation is limited to a maximum of six days a year. The donation cannot cause the employee’s sick leave balance to fall below sixty days.
4.3.2.4.1.c(4)	Maximum shared leave per person
	An employee may not receive more than 261 days of shared leave for the entire duration of state employment. For this purpose, eight hours shall constitute a day (RCW 49.28.010) unless otherwise required by statute, regulations, or employment contract.
4.3.2.4.1.c(5)	When shared leave can be used
	WAC 356-18-112 and WAC 251-22-290 require an employee to use all other paid leave balances (i.e., sick leave, annual leave, compensatory time, and exchange time) before using shared leave. Personal holidays are not considered leave for this purpose.
4.3.2.4.1.c(6)	Prohibition of donation of excess annual leave
	An employee may not donate excess vacation leave (hours in excess of 240) that the employee would not be able to take due to an approaching anniversary date.
	Prior to the donation, the donor’s supervisor (or equivalent) determines how much of the excess leave the employee could use prior to the employee’s anniversary date.
	Only the usable portion is donable.
	Because only approved usable excess leave can be donated, employees do not need a second approval to receive any remaining excess donated leave back should a reversion occur.
4.3.2.4.1.c(7)	Shared leave can transfer within a state agency and account; or, it can transfer between accounts or agencies.
4.3.2.4.1.c(8)	Transfer of annual leave requires approval from the agency head or designee of both the donor and donee agencies.
	The agency’s procedures and authorized designee(s) should be defined in the agency’s policy on shared leave.
4.3.2.4.1.d	Computation of Leave Transferred
	In transferring leave from the donor to the donee, it is the donor’s dollar value of the leave that transfers and purchases shared leave for the donee at the donee’s salary rate.
	Calculate the dollar value of donated leave using the donor’s total current salary rate times the hours donated.
	For the donee, divide the dollar value received by the donee’s total current salary rate to determine the leave hours to record.
	Definition of Formula Elements for Calculating Shared Leave:

Base Salary Rate (BSR)	=	Current hourly rate	OR	Monthly Rate
				174 (or monthly hours)
*Fringe Benefits (FBR)	=	40% x BSR
Total Salary Rate (TSR)	=	BSR + FBR

*Formula for deriving the fringe benefit rate is in Section 4.3.2.4.1 (j).

Donor Formula for Shared Leave Transfer Calculation:

Dollar Value of Donated Leave

Donated Leave Hours

Donor’s TSR

Reduce the donor’s annual leave balance by the number of hours donated.

Donee Formula for Shared Leave Received:

	Shared leave hours credited to donee	=	Dollar Value of Donated Leave Received
			Donee’s TSR

Record the donee’s shared leave balance for the calculated shared leave hours received.

4.3.2.4.1.e	Recording Donated Leave Transfer(s)
	Accounting System(s) and Payroll Systems:
4.3.2.4.1.e(1)	Transfer the dollar value of donated leave using a Journal Voucher (A7) for transfers between treasury and/or treasury accounts.
4.3.2.4.1.e(2)	Use a warrant or a check for transfers between treasury and local accounts.
4.3.2.4.1.e(3)	Attach documentation to the JV or warrant or check, showing the name(s) of the employee(s) receiving the shared leave.
4.3.2.4.1.e(4)	Record the transfer in the appropriate accounting systems and payroll systems. Refer to section 2.2.3.3.2 for related accounting entries.
4.3.2.4.1.f	Shared Leave Records
	Code donated leave as shared leave and maintain it separately from all other leave balances. The agency head or designee must maintain the following shared leave information at a minimum:
	Number of leave requests received.
	Number of leave requests granted.
	Nature of request.
	Medical statement (certificate).
	Name and agency of donors.
	Amount of leave transferred in or out.
	Value of leave transferred in or out.
	Date leave was taken.
4.3.2.4.1.g	Unused Shared Leave
4.3.2.4.1.g(1)	Return any unused shared leave to the donor(s). Consider the shared leave ended when any one of the following events occurs:
	When the donee has not used the shared leave for a 30 calendar day period.
	When the donee voluntarily stops using the shared leave and instructs reversion of the remaining shared leave balance.
	When the donee is unable to use the remaining shared leave, (i.e., the employee terminates employment).
	The agency head or designee must approve in writing any exceptions to this reversion.
4.3.2.4.1.g(2)	Upon reversion, the Donee Agency completes the following steps:
	Determine the donee's shared leave hours remaining.
	Calculate the dollar value using the donee's original TSR and return the dollars to the appropriate donor agency or account (if applicable).
	Any reversion must use the same TSR basis that was used to provide the shared leave hours to the donee. Otherwise, the dollar value per reverted hour returned to the donor agency or account will be more or less than received, depending on how a donee's current TSR may have changed.
	Refer to Section 2.2.3.3.2 for accounting entries, including the entries to return shared leave value within an account.
	Reduce the donee's shared leave balances to zero. Also, restore the donor's annual leave hours if in the same agency.
	Formula for calculating the return of shared leave to the donor:

Dollar Value of Reverting
Shared Leave to Donor	=	*Shared Leave Hours Reminaing x Donee's Original* TSR**
Agency and/or account

Reduce the donee's available shared leave balance to zero and prepare transfer of the remaining dollar value of the leave back to the donor agency and/or account.

4.3.2.4.1.g(3)	Upon reversion, the Donor Agency completes the following steps:
	Receive the returned cash from another agency or account. If the donor was within the same agency and same account, then receive the dollar value only. (See Section 2.2.3.3.2.)
	Calculate the number of hours to restore to the donor using the donor's current TSR. The donor's current salary rate is used because that reflects the current cost of reestablishing annual leave hours.
	Restore the calculated annual leave hours to the donor.

Formula for converting the dollar value of returned leave to one donor:

Converting Dollar Value of Reverting

Dollar value of reverting shared leave

Shared Leave to Donor Hours

Donor's Current TSR

Record the calculated hours returned to the donor's annual leave balance.

4.3.2.4.1.g(4)	Calculating Reverting Shared Leave Hours from Multiple Donors:
	Where more than one employee donated leave to an individual, calculate reverting leave on a prorated basis using either the shared leave hours provided or dollars received by the donee. The following example uses dollars received.
	This is a three step process.

Step 1: Calculate this percentage for each donor:

	Percentage of residual shared	=	Shared leave dollars received from Employee 1
	leave returned to donor		Total dollar value of shared leave received

Step 2: Calculate the dollar value of shared leave reverting back to the donor:

	Dollar Value of Shared Leave	=	% calculated	x	Shared leave	x	Donee’s Original
	Reverting Back to Donors		in Step 1		Hours remaining		TSR

*Calculate this for each donor.

Step 3: Calculate leave hours returned to the donor:

	Residual shared leave returned to donor	=	Dollar value of reverting shared leave from Step 2
	converted to donor hours		Donor’s Current TSR

	Note: A special reversion situation occurs when a donee depletes the initial shared leave hours received, and then receives additional donations. In this case, should there be a reversion of the additional leave received, do not include in the reversion proration the donors and the hours of the initial donation. In effect, batches of donated shared leave are used on a first-in, first-out basis and reversion is limited to the remaining batch. Each batch (pool) is considered closed at the time its available shared leave balance reaches zero.
4.3.2.4.1.h	See Section 4.3.2.4.4.c(5) for the Impact of Time Loss on Shared Leave
4.3.2.4.1.i	Direct Questions on Shared Leave Calculations to OFM
	Direct any questions arising due to the transfer of funds or the adjustment of appropriation authority with regard to the Shared Leave Program to the OFM Accounting and Fiscal Services Division. The agency’s assigned OFM financial consultant (or designee) will determine the appropriate transfer or adjustment to be made.
4.3.2.4.1.j	Formula for Fringe Benefit Rate

Formula for Deriving the Fringe Benefit Rate:

	Benefits (Object B) as a percentage of Salaries and Wages	26.4%
	Accrued holidays, sick leave, annual leave	13.5%*
	Total	39.9%(Rounded to 40%)

* The additional 13.5% provides for holidays, sick leave, and annual leave that an employee could potentially earn while on shared leave. The following formula is the method OFM has historically used to derive the percentage.

	Holidays	11 days a year
	Sick Leave	12 days a year
	Annual Leave	12 days a year
	Total	35 days a year
		X 8 hours per day
	Total	280 hours

4.3.2.4.2

Annual Leave Buyout at Termination

Effective Date:

July 1, 1995

	Compute termination leave payments by multiplying an average hourly rate times the number of annual leave hours accumulated. Determine the average hourly rate by multiplying .0063* times the monthly salary rate. The fraction of .0063 is based upon the number of work hours in an average month. Do not include premium pay such as standby, shift differential, and overtime in the monthly salary rate used as the basis for termination leave payment.
	*The formula for deriving the .0063 factor follows.
	Formula for Deriving the Annual Leave Buyout Termination Factor:

		1
(8 hours)	X	(365 days - 104 Saturdays and Sundays -
(1 Day)		- 11 Holidays - 12 days of annual leave)
		12 Months
	=	___1___
		158.66
	=	.0063

4.3.2.4.3

Accrued Sick Leave Buyout

Effective Date:

July 1, 1995

4.3.2.4.3.a	Authority
	In order to provide eligible state employees an attendance incentive program, RCW 41.04.340 establishes rules when monetary compensation may be paid for accrued sick leave. Compensation is permitted for only that portion of sick leave accumulated at a rate of one day (8 hours) per month.
	WACs 356-18-050 and 251-22-124 provide additional rules.
4.3.2.4.3.b	Eligibility Rules
4.3.2.4.3.b(1)	Continuing Employees
4.3.2.4.3.b(1)(a)	In January of the year following any year in which a minimum of sixty days (480 hours) of sick leave is accrued, and at no other time, an eligible employee may elect to receive compensation for the unused sick leave accumulated only in the previous year.
4.3.2.4.3.b(1)(b)	Compensation is payable at 25% for any of the prior year’s unused sick leave hours the employee elects to receive. However, no sick leave hours may be converted which would reduce the calendar year-end balance below 480 hours. Payment is based on the employee’s current salary.
4.3.2.4.3.b(1)(c)	Sick leave for which compensation has been received is deducted from accrued sick leave at the rate of 4 days for every 1 day paid.
4.3.2.4.3.b(2)	Terminating Employees
	Eligible employees (or their estates) who separate from state service due to retirement or death may elect to receive compensation for unused sick leave at the rate of 25% of accumulated accrued sick leave. The compensation is based on the employee’s salary at the time of separation.
4.3.2.4.3.c	Determination of the Current Hourly Rate
	The appropriate current hourly rate for sick leave buyout compensation depends on how an eligible employee is paid. Most situations are addressed in the following examples.
4.3.2.4.3.c(1)	For an employee paid a monthly salary based upon an official Washington State Personnel System Salary Schedule, divide the monthly salary rate by 174 (average number of hours in a month).
4.3.2.4.3.c(2)	For an employee paid a salary based on a contract stating the number of contract days, divide the contracted salary by the number of contracted days to obtain a daily rate. Then divide the daily rate by the appropriate number of hours per day established for that contract to derive the hourly rate.
4.3.2.4.3.c(3)	For an employee paid a salary based on a yearly contract, divide the yearly salary by 12. The hourly rate is then calculated by dividing the computed monthly salary by 174 hours.
4.3.2.4.3.c(4)	If an employee is paid an hourly rate in accordance with an agreement negotiated between an employee organization and the state or based on an hourly rate from an official Washington State Personnel System Salary Schedule, that hourly rate is the official rate for computing sick leave compensation.
4.3.2.4.3.d	Exemption from Retirement Credit
	Do not take retirement contributions on payments for sick leave buyouts. Compensation for unused sick leave is not used in computing retirement allowances.
4.3.2.4.3.e	Buyout Upon Disability or Death
	Sick leave buyouts made to employees who retire due to disability, or, to deceased employees’ survivors are exempt from OASI and medicare taxes.
4.3.2.4.3.f	Buyout Calculation

Calculation for a Continuing Employee:
Sick Leave hours unused in previous year in excess of 480 hours elected for buyout			x 25%
x Employee’s current hourly salary rate*	=	Buyout

Calculation for a Terminating Employee:
All unused Sick Leave hours remaining	x 25% x	Employee’s current hourly salary rate*
=Buyout

	*Refer to Section 4.3.2.4.3.c for determination of the current hourly rate
	Example: An eligible employee has 650 hours of unused sick leave as of January 1, 19xx. The employee has 48 hours of unused prior year sick leave.

	Calculation for a *Continuing* Employee:	(25% x 48 hours) Pay 12 hours
	Calculation for a *Terminating* Employee:	(25% x 650 hours) Pay 162.5 hours

4.3.2.4.4

Workers’ Compensation Time Loss Payments

Effective Date:

July 1, 1995

4.3.2.4.4.a
Purpose

This subsection pertains to determining when a state agency needs to recover time loss compensation received by employees while absent from work and in approved disability status under the state workers' compensation law.

4.3.2.4.4.b
Authority

4.3.2.4.4.b(1)

RCW 51.32.090 prohibits employees from receiving time loss compensation payments and regular salary or wages during the period covered by the disability. Regular salary or wages include sick leave, but exclude other paid leave.

4.3.2.4.4.b(2)

WAC 251-22-165 and WAC 356-18-080 contain the rules for determining time loss payment recoveries. The following procedures provide guidance in complying with these rules.

4.3.2.4.4.c
Agency Procedures For Time Loss Recovery Determinations

4.3.2.4.4.c(1)
Department of Labor and Industries notifications

The Department of Labor and Industries (L & I) notifies the agency of time loss compensation payment amounts made to the agency’s employees and the time periods covered.

4.3.2.4.4.c(2)
Agency receipt of notice

When an agency receives notice of time loss compensation payments, the agency determines the nature of paid leave received by the employee, if any, during the disability period covered by workers’ compensation.

4.3.2.4.4.c(3)
Employee options

Under WACs 251-22-165 and 356-18-080, employees elect one of the following options:

They can choose to receive time loss compensation payments exclusively.

They can choose to receive leave payments exclusively (excluding Shared Leave).

They can choose a combination of time loss payments and leave payments.

4.3.2.4.4.c(4)
An employee can elect to receive both time loss payments and pay for time taken as:

Annual leave

Compensatory time

Exchange time

Holidays

An employee is entitled to both payments for the same time period without any deductions for the time loss payments.

4.3.2.4.4.c(5)
Shared leave

An employee who qualifies for time loss compensation cannot use shared leave for the same time period.

If a time loss compensation payment is approved at a later date, all shared leave received must be returned to the donor(s).

The employee shall return any overpayments to the employing agency.

If the employee has to return shared leave, return the dollar value of the shared leave to the donor agency or account. Correct all leave records affected.

Refer to Section 2.2.3.3.2 of this manual for the appropriate accounting entries for shared leave recoveries.

4.3.2.4.4.c(6)
Sick Leave

If an employee elects to receive regular salary or sick leave for a disability period where time loss payments were also received, the agency must recover the time loss payments.

4.3.2.4.4.d
Time Loss Recovery Procedures

If the employee received paid sick leave for a period covered by time loss payments, recover the dollar value of the sick leave by having the employee select one of the two following methods.

4.3.2.4.4.d(1)
The employee keeps the time loss compensation payment but has a comparable salary reduction.

Compute the employee’s gross salary less the amount of the applicable time loss payment.

Compute federal income tax (FIT), OASI, and Medicare taxes on the employee’s reduced gross salary. Time loss payments are not subject to these taxes.

Compute retirement contributions on the employee’s gross salary before reduction for the time loss compensation payment.

Restore sick leave to the nearest 10^th of an hour using the employee’s hourly rate effective during the time loss period.

4.3.2.4.4.d(2)
The employee reimburses the agency for the amount of the applicable time loss compensation payment.

Treat the reimbursement from the employee as a recovery of current biennium salary expenditures/expenses.

For payment purposes, compute the employee’s gross salary without reduction for the time loss payment. However, OASI and Medicare taxes must be reduced so as not to tax the effect of the time loss compensation payment recovered through a different reimbursement process.

Compute federal income tax withholding on the employee’s gross salary without reduction for the time loss payment. This becomes a self-adjusting item when the federal income tax return is filed by the employee.

Compute OASI and Medicare on the employee’s gross salary after reduction for the time loss payment.

Compute retirement contributions on the employee’s gross salary before reduction for the time loss payment.

Make year-to-date adjustments to the following:

Reduce year-to-date earnings subject to federal income tax, OASI and Medicare by the amount of the time loss compensation payment.

Adjust year-to-date OASI and Medicare taxes to reflect the OASI and Medicare adjustment made for reduction of the time loss compensation payment.

Restore sick leave to the nearest 10^th of an hour using the employee’s hourly rate effective during the time loss period.

Example: Time loss compensation payment of $400 received or refunded to the agency. The employee’s semi-monthly salary was $850 and the number of available hours in the 11 day pay period when the time loss payment was calculated was 88 (8 x 11).*

(1)	$850	=	$9.66	Actual hourly rate
	88
(2)	$400	=	41.4	Sick Leave hours to restore
	$9.66

*Note: Available hours are based on how many days are in a particular semi-monthly pay period and may vary depending on the pay period.

Return to CHAPTER 3: OTHER ADMINISTRATIVE REGULATIONS

4.3.2.4.4.a	Purpose
	This subsection pertains to determining when a state agency needs to recover time loss compensation received by employees while absent from work and in approved disability status under the state workers' compensation law.
4.3.2.4.4.b	Authority
4.3.2.4.4.b(1)	RCW 51.32.090 prohibits employees from receiving time loss compensation payments and regular salary or wages during the period covered by the disability. Regular salary or wages include sick leave, but exclude other paid leave.
4.3.2.4.4.b(2)	WAC 251-22-165 and WAC 356-18-080 contain the rules for determining time loss payment recoveries. The following procedures provide guidance in complying with these rules.
4.3.2.4.4.c	Agency Procedures For Time Loss Recovery Determinations
4.3.2.4.4.c(1)	Department of Labor and Industries notifications
	The Department of Labor and Industries (L & I) notifies the agency of time loss compensation payment amounts made to the agency’s employees and the time periods covered.
4.3.2.4.4.c(2)	Agency receipt of notice
	When an agency receives notice of time loss compensation payments, the agency determines the nature of paid leave received by the employee, if any, during the disability period covered by workers’ compensation.
4.3.2.4.4.c(3)	Employee options
	Under WACs 251-22-165 and 356-18-080, *employees elect one* of the following options:
	They can choose to receive time loss compensation payments exclusively.
	They can choose to receive leave payments exclusively (excluding Shared Leave).
	They can choose a combination of time loss payments and leave payments.
4.3.2.4.4.c(4)	An employee can elect to receive both time loss payments and pay for time taken as:
	Annual leave
	Compensatory time
	Exchange time
	Holidays
	An employee is entitled to both payments for the same time period without any deductions for the time loss payments.
4.3.2.4.4.c(5)	Shared leave
	An employee who qualifies for time loss compensation cannot use shared leave for the same time period.
	If a time loss compensation payment is approved at a later date, all shared leave received must be returned to the donor(s).
	The employee shall return any overpayments to the employing agency.
	If the employee has to return shared leave, return the dollar value of the shared leave to the donor agency or account. Correct all leave records affected.
	Refer to Section 2.2.3.3.2 of this manual for the appropriate accounting entries for shared leave recoveries.
4.3.2.4.4.c(6)	Sick Leave
	If an employee elects to receive regular salary or sick leave for a disability period where time loss payments were also received, the agency must recover the time loss payments.
4.3.2.4.4.d	Time Loss Recovery Procedures
	If the employee received paid sick leave for a period covered by time loss payments, recover the dollar value of the sick leave by having the employee select one of the two following methods.
4.3.2.4.4.d(1)	The employee keeps the time loss compensation payment but has a comparable salary reduction.
	Compute the employee’s gross salary less the amount of the applicable time loss payment.
	Compute federal income tax (FIT), OASI, and Medicare taxes on the employee’s reduced gross salary. Time loss payments are not subject to these taxes.
	Compute retirement contributions on the employee’s gross salary before reduction for the time loss compensation payment.
	Restore sick leave to the nearest 10^th of an hour using the employee’s hourly rate effective during the time loss period.
4.3.2.4.4.d(2)	The employee reimburses the agency for the amount of the applicable time loss compensation payment.
	Treat the reimbursement from the employee as a recovery of current biennium salary expenditures/expenses.
	For payment purposes, compute the employee’s gross salary without reduction for the time loss payment. However, OASI and Medicare taxes must be reduced so as not to tax the effect of the time loss compensation payment recovered through a different reimbursement process.
	Compute federal income tax withholding on the employee’s gross salary without reduction for the time loss payment. This becomes a self-adjusting item when the federal income tax return is filed by the employee.
	Compute OASI and Medicare on the employee’s gross salary after reduction for the time loss payment.
	Compute retirement contributions on the employee’s gross salary before reduction for the time loss payment.
	Make *year-to-date adjustments* to the following:
	Reduce year-to-date earnings subject to federal income tax, OASI and Medicare by the amount of the time loss compensation payment.
	Adjust year-to-date OASI and Medicare taxes to reflect the OASI and Medicare adjustment made for reduction of the time loss compensation payment.