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Questions about reporting special circumstances

Q1: What are reporting guidelines for a leave or layoff caused by COVID-19?

Q2: Is there a difference in retiree work hour limits for Tier One/Tier Two and OPSRP retirees?

Q3: How do I report hours for a community college or public university employee?

Q4: How do I change IAP contribution type?

Q5: How do I do a data verification?

Q6: For whom are employer-paid domestic partner medical premiums considered “subject” salary to be reported to PERS?

Q1: What are reporting guidelines for a leave or layoff caused by COVID-19?

  1. Question: If an employee uses their own accrued paid leave (vacation, sick, or personal business) or donated paid leave for an absence relating to the COVID-19 public health emergency, should employers report the payment as subject salary?

    Answer: Yes. Paid leave that is taken under COVID-19 public health emergency may be reported to PERS like other types of paid leave (salary plus hours).

  2. Question: If an employer provides new paid leave for an absence relating to the COVID-19 public health emergency, or allows employees to accrue additional paid sick leave or paid family leave that is in addition to the employee’s existing paid leave, should employers report the payment as subject salary?

    Answer: Generally, yes. Paid leave that is taken under COVID-19 public health emergency may be reported to PERS like other types of paid leave (salary plus hours).

  3. Question: If an employee uses paid leave relating to the COVID-19 public health emergency from 4/1/2020 through 12/31/2020 that the employer is required to provide under the federal law "Families First Coronavirus Response Act" (H.R. 6201)1, should employers report the payment as subject salary?

    Answer: Generally, yes. Paid sick leave, or paid family leave, taken under federal law may be reported to PERS like other types of paid leave (salary plus hours). Once qualifying paid leave is granted, it does not matter whether the paid leave is required by state or federal laws or made pursuant to employment agreements.

  4. Question: If an employer participates in the PERS unused sick leave program under ORS 238.350, which allows accumulated sick leave to be included in a Tier One or Tier Two member’s final average salary determination, does the employer have to report the sick leave hours a Tier One/Tier Two employee uses for emergency paid sick leave related to the COVID-19 pandemic under the Families First Coronavirus Recovery Act to PERS, or are they considered separate from regular sick leave hours?

    Answer: Yes, the hours used for emergency paid sick leave related to COVID-19 should be reported to PERS as regular used sick leave hours. There is no special rule that changes the employer’s requirement to deduct the used sick leave hours from inclusion in the PERS unused sick leave program. When these hours are used, they do not qualify for use in the unused sick leave program.

  5. Question: During the COVID-19 public health emergency, if the employer’s rate of sick-leave accrual for its employees exceeds the maximum rate of accrual allowed by PERS (8 hours per month or the lowest rate of accrual in effect for an eligible employee), is it possible to convert any excess sick leave hours not already reported to PERS to another type of leave without impacting a Tier One/Tier Two employee’s unused sick leave hours as reported to PERS?

    Answer: Yes. An employer’s written policy may allow employees to convert excess sick leave hours to another type of paid leave, such as paid time off or vacation leave. If those other paid leave hours are used during the pandemic, the use of those paid leave hours would not impact sick leave usage for the PERS unused sick leave program. However, please note that conversions can be complicated and can have unintended consequences. Once paid leave is assigned a classification, such as sick leave, PTO, or vacation, then certain rules impact how that leave can be treated in other situations, such as payouts.

  6. Question: Are wages that include paid sick leave and paid family leave subject salary for all plans?

    Answer: Generally, yes. Wages, or salary, are remuneration made to an employee for services rendered as an employee for an employer. Subject salary includes payments for sick leave or family leave that are required by state or federal laws or made pursuant to employment agreements.

  7. Question: How does reported paid leave impact eligibility?

    Answer: If salary and hours are reported, then paid leave would count toward the employee’s membership eligibility, creditable service, contributions, and final average salary.

  8. Question: If I am temporarily laying off my employee, how should I report this to PERS?

    Answer: If an employee is temporarily laid off, they should be reported to PERS as terminated as of the date of the layoff. When they are later rehired, they should be reported to PERS as hired as of the date they restart employment.

    During the period of non-employment, a laid-off employee will not accrue PERS benefits as a non-employee.

  9. Question: If I decide to not lay off my employee, but I do not have work for them to perform and do not pay them during this period of time (i.e., unpaid furlough), how should I report this to PERS?

    Answer: This is an employer determination that depends on the facts. The threshold requirement for PERS membership qualification requires that the person be an employee.

    If the person is not laid off or terminated, then they are considered an employee. As an employee, they may receive some employee benefits even though they are not actually performing services or receiving pay.

    In general, if the person has no wages or hours but is still an employee, there is nothing you have to report or change in your reporting. However, if the person is on unpaid furlough that will last 11 business days or more, the period of absence should be reported as an official leave of absence without pay (LWOP) to PERS, unless otherwise specified by the employee’s collective bargaining agreement or employment agreement. Contact your Employer Service Center representative if you have additional questions.

  10. Question: If I temporarily lay off my employee, can I report the period of layoff as “leave without pay” to PERS?

    Answer: No. A layoff from employment is not a leave without pay. See Oregon Administrative Rule 459-010-0010, subsection (7).

  11. Question: When and how can I report an official period of leave without pay to PERS?

    Answer: When an employer grants an employee leave without pay, it may be reported to PERS as provided in Oregon Administrative Rule 459-010-0010. An official leave of absence must be supported by a written agreement between the employer and the employee that confirms compliance with any applicable law, rules, and regulations. The agreement must specify the duration of the period of leave of absence without pay and be certified by the employer granting such leave.

  12. Question: If we are participating in the Oregon Employment Department’s Work Share program, how should I report an employee’s reduced or furloughed hours to PERS?

    Answer for hours worked on or after 1/1/2024: Work Share is an Oregon Employment Department (OED) program that offers an alternative to laying off your work force. It allows you to keep skilled employees during slow times by reducing their work hours. Eligible employees whose hours and wages are reduced receive a portion of their regular unemployment insurance benefits to compensate for the lost wages.

    Normally these wages received from a third party would be nonsubject salary for PERS purposes. However, House Bill 2283 (2023), effective January 1, 2024, added new provisions to treat Work Share benefits as subject salary.

    What you need to do:

    1. Work with OED to get the paid-benefit information for your PERS reporting.
    2. Submit a Detail 2 wage record to report pay date, wages, and associated hours to PERS, including work periods (if local government employer) and contributions (if employee qualifies for PERS benefits).
    3. Submit a Demographic Correction Request (DCR) to notify us that the employee is participating in the Work Share program.

    If you have additional eligibility questions about the Work Share program, visit the Oregon Employment Department’s Work Share webpage.

    Answer for hours worked before or on 12/31/2023: An employer participating in the Work Share program should treat the reduced or furlough hours as “leave without pay” (no salary or hours) because those Work Share program benefits are not considered salary for PERS purposes. Please note that a 20-40% reduction of a full-time employee’s weekly hours under the Work Share program still allows the employee to work the major fraction of the month. As long as the employee works and is paid for at least 50 hours each month, the reduction in work hours from the Work Share program furlough should not reduce the member’s creditable service. However, salary would be reduced for those months with Work Share program furlough, with an impact to Individual Account Program (IAP) contributions and a possible impact to final average salary. If you have additional eligibility questions about the Work Share program, please visit the Oregon Employment Department’s Work Share Oregon FAQs.

  13. Question: As the Social Security administrator for the State, does PERS have any definitive guidance on whether local governments are or are not eligible for the Social Security tax credit on the employer’s share?

    Answer: No. Because of the rapidly evolving environment relating to COVID-19, PERS cannot provide definitive guidance on the newly passed Families First Coronavirus Response Act at this time. However, the IRS has provided some preliminary guidance on this topic that seems to indicate that governmental employers are not eligible for the Social Security tax credit on their payroll taxes. For additional information on the federal law, please review the following sets of FAQs:

    FAQs from the IRS:

    COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs

    FAQs from the U.S. Department of Labor, Wage, and Hour Division:

    DOL Families First Coronavirus Response Act: Questions and Answers

    This FAQ is not meant to be comprehensive, and information is subject to change. PERS will add and update information when we have more to share. Please contact your Employer Service Center representative if you have additional questions. Thank you for your patience and understanding.

    1Specifically, the Emergency Family and Medical Leave Expansion Act and the Emergency Paid Sick Leave Act of the Families First Coronavirus Response Act passed under H.R. 6201.

Q2: Is there a difference in retiree work-hour limits for Tier One/Tier Two and OPSRP retirees?

Yes, but only for early retirees who have not taken a six-month break from working.

Senate Bill 1049 (2019) allows Tier One, Tier Two, and OPSRP retirees to work unlimited hours for a PERS-participating employer while continuing to receive their retirement benefits if they retired at normal retirement age.

Early retirees, however, are still limited in the hours they are allowed to work until they take a six-month break from PERS-covered employment.

The limits for early retirees are:

  • Tier One/Tier Two retirees may work up to 1,039.9 hours in a calendar year as a retiree without affecting their ability to receive their retirement benefit.
  • OPSRP retirees may work up to 599.9 total hours in a calendar year as a retiree without affecting their ability to receive their retirement benefit.

A working early retiree who exceeds these hours will forfeit their retirement status, stop receiving benefits, and be returned to active membership.

Why is the OPSRP early retiree service limit set at less than 600 hours in a calendar year?

The 600-hour rule is not a retiree work limit; it is a PERS program membership requirement. 600 hours is the minimum service in any calendar year that makes all job segments in that calendar year “qualifying” for that year. Working in a “qualifying” position is one of three requirements to establish active program membership. Meeting or exceeding this limit would re-establish active membership and automatically cancel an OPSRP retirement.

What is included in the OPSRP 600-hours limitation?

The service limit includes total service hours in all “non-qualifying” jobs in any calendar year.

Please contact your ESC Account Team representative if you have questions on this topic.

Q3: How do I report hours for a community college or public university employee?

For hours worked by college and university academic employees on and after January 1, 2024, calculate hours as follows:

  • Each hour of lecture time or classroom instruction is reported to PERS as 2.67 hours.
  • All other work is reported as actual time worked.

The college or university is responsible for determining what is considered classroom time and what is considered other work.

For years before 2024, hours worked by community college academic employees are converted from full-time equivalent (FTE) to hours for PERS reporting, as explained in employer announcement 93, “Community Colleges: Eligibility and Use of FTE.”

House Bill 2740 (2023) removed the FTE conversion and replaced it with a new calculation method that applies to community college and public university academic employees starting January 1, 2024. Refer to employer announcement 103, “Reporting Hours for Community College and Public University Employees.”

Example:

Sally Smith is an academic employee of a university. She works 200 hours per term. During that term, she presents 16 hours of lecture time. Her employer reporter multiplies her lecture hours by 2.67:

16 hours x 2.67 hours = 42.72.

The remaining hours worked do not require a conversion and should be reported one for one:

200 – 16 = 184.

The employer reporter adds the two sums and reports those hours to PERS on Sally’s Detail 2 record.

42.72 + 184 = 226.72.

Q4: How do I change IAP contribution type?

PERS collects three types of IAP account contributions:

  • Member-paid after-tax (MPAT)
  • Member-paid pre-tax (MPPT)
  • Employer-paid pre-tax (EPPT).

PERS employers may withhold the amount from their employees’ pay before or after taxes (MPPT or MPAT) or pay the contribution on behalf of their employees (EPPT).

If an employer is withholding and remitting contributions on an MPAT or MPPT basis, the employer may change the contribution type to EPPT by agreeing to assume and pay the employee contribution on behalf of its employees. Alternatively, the employer may change the contribution type to MPPT by agreeing to “pick-up” the employee contributions withheld.

To change contribution type, submit a certified copy of your employment policy established by statute, charter, ordinance, administrative rule, executive order, collective bargaining agreement, or other written employment policy or agreement.

Changing from MPAT or MPPT to EPPT

The employment policy must specify that:

  • The required PERS employee contribution is deemed to be “picked up” for purposes of Internal Revenue Code (IRC) Section 414(h)(2).
  • The employees do not have the option of receiving the assumed amount directly.
  • Employee compensation may not be reduced and the employer shall provide the additional amounts necessary to make the employee contributions.

The employment policy or agreement cannot be retroactive.

Changing from MPAT or EPPT to MPPT

The employment policy must specify that:

  • The employees do not have the option of receiving the picked-up amount directly.
  • Employee compensation shall be reduced by the amount necessary to make the employee contributions.

The employment policy or agreement cannot be retroactive.

Other questions

Can a participating employer agree to “assume and pay” or “pick-up” less than the full amount of the employee contribution?

  • No. The employer’s employment policy or agreement must be to assume and pay or pick-up the full 6% member contribution.

Can a participating employer’s policy or agreement apply to only some of its employees?

  • Yes. If it applies only to some employees, it must apply uniformly to employees of the public employer who are similarly situated, such as, but not limited to:

    • The chief executive officer or administrative head of a public employer.
    • Management personnel, as defined by the public employer, not otherwise covered by a collective bargaining agreement.
    • Confidential personnel, as defined by the public employer, not otherwise covered by a collective bargaining agreement.
    • Administrative personnel, as defined by the public employer, not otherwise covered by a collective bargaining agreement.
    • Personnel covered by a collective bargaining agreement.
    • Other personnel, whether full time, part time, temporary, or as a substitute, who are not covered by a collective bargaining agreement.
    • Personnel hired on or after a date established or agreed upon by the employer.

When does the employer’s written employment policy or agreement(s) to change the contribution type become effective?

  • The employer’s written employment policy or agreement to change employee contribution type must be submitted to PERS for review and approval and becomes effective on the date the valid notification is received by PERS. This means that contribution-type elections cannot be applied retroactively, and the contribution type cannot be changed by an employer until after an employer submits the required notification to PERS.

How do I do a data verification?

When you receive a Data Verification Work List request, it is imperative that you complete it before the 30-day deadline. If you miss the deadline, you cannot make changes to the employee’s employment history, which could affect the accuracy of the retirement benefits your employee has earned.

Data verification process

  1. An employee within two years of retirement requests a data verification through Online Member Services or by a paper form.
  2. PERS Data Verification team receives the request and mails the employee a report of their employment and salary data.
  3. If the employee finds any discrepancies with their own records, they fill out the Additional Account Information form that was included with the report and return it to PERS along with any supporting documentation.
  4. PERS staff request information from the employee’s employer to reconcile any discrepancies or questions. (There is no deadline for this step.)
  5. PERS makes initial corrections based on that information.
  6. PERS sends the employer a Data Verification Work List item.
  7. The employer has 30 days to confirm or correct the information. After 30 days, the employee’s employment history is locked as posted.

Requesting an extension

You can request a one-time extension of that 30-day period for an individual employee. Within 21 days after receiving the Data Verification Work List request, submit a Data Verification Employer Request for an Extension form. Your request is then sent to PERS Data Integrity Group for review and approval.

Ensuring accuracy

It is vital that your verification is correct. Once you complete your verification (or the 30-day or extended deadline hits), the employee’s data are considered verified, or “locked.” They cannot be changed except as directed by PERS.

Learn more

For more information about how an employee can request a data verification, go to the Data Verification webpage. For employer instructions, read employer reporting guide 19 Completing Work List Requests.

Q6: For whom are employer-paid domestic partner medical premiums considered “subject” salary to be reported to PERS?

Domestic partner medical premiums are not considered “subject salary” for Tier One/Tier Two members.

Domestic partner medical premiums may be considered subject salary for OPSRP Pension Program members.

It is the employer’s responsibility to determine whether domestic partner medical premiums paid by the employer are Oregon taxable income. If the employer determines that the payments are not included in the employee's Oregon taxable income, then the employer would not report the payments as subject salary.

What is a domestic partner?

This determination is made by the employer, not PERS. For OPSRP members, if the employer is paying domestic partner health insurance premiums and the premiums are included in the OPSRP member's Oregon taxable income, those premiums should be reported as subject salary for that member. The employer must make the determination that the domestic partner health insurance premium is or is not included in the member's Oregon taxable income based on Oregon Department of Revenue guidelines, not on PERS guidance. Employers should note that the nature of the domestic partnership (i.e., opposite-sex domestic partners, same-sex but non-registered domestic partners, and same-sex registered domestic partners) may be relevant to the employer’s determination of whether the payment should be included in the member’s Oregon taxable income.

Employers may wish to consult the Oregon Department of Revenue's Oregon Individual Income Tax Guide, which contains information specific to registered domestic partners under General Filing Instructions, or pose taxable income questions directly to the Oregon Department of Revenue (DOR).

What role does imputed salary play in reporting domestic partner medical premiums?

The term “imputed salary” is not defined in PERS’ statutes and may mean different things to different employers. Rather than address an undefined term, the question as presented above is the real distinction: is the payment included in the member's taxable income and not excluded from salary by statute? If yes, it’s subject salary.