WSR 97-01-016
PERMANENT RULES
DEPARTMENT OF
RETIREMENT SYSTEMS
[Filed December 6, 1996, 4:48 p.m.]
Date of Adoption: December 5, 1996.
Purpose: To codify department interpretations of the definition of "basic salary" for LEOFF Plan 1 and LEOFF Plan 2 found in RCW 41.26.030(13).
Statutory Authority for Adoption: RCW 41.50.050, 41.50.055.
Adopted under notice filed as WSR 96-18-074 on September 3, 1996.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, amended 0, repealed 0; Federal Rules or Standards: New 0, amended 0, repealed 0; or Recently Enacted State Statutes: New 0, amended 0, repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, amended 0, repealed 0.
Number of Sections Adopted on the Agency's own Initiative: New 44, amended 0, repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 44, amended 0, repealed 0.
Number of Sections Adopted using Negotiated Rule Making: New 0, amended 0, repealed 0; Pilot Rule Making: New 0, amended 0, repealed 0; or Other Alternative Rule Making: New 0, amended 0, repealed 0.
Effective Date of Rule: Thirty-one days after filing.
December 6, 1996
Sheryl Wilson
Director
BASIC SALARY
NEW SECTION
WAC 415-104-298 Purpose and scope of basic salary rules. WAC 415-104-299 through 415-104-405 codify the department's existing
interpretation of statutes and existing administrative practice regarding
classification of payments as basic salary in LEOFF Plan I and LEOFF Plan
II. The department has applied and will apply these rules to determine
the proper characterization of payments occurring prior to the effective
dates of these sections.
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NEW SECTION
WAC 415-104-299 Basic salary table. The following table is
provided as a quick reference guide to help you characterize payments
under LEOFF Plan I and LEOFF Plan II. Be sure to turn to the referenced
rule to ensure that you have correctly identified the payment in
question. The department determines basic salary based upon the nature
of the payment, not the name applied to it. See WAC 415-104-311 (Plan
I) and WAC 415-104-360 (Plan II).
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NEW SECTION
WAC 415-104-301 What is basic salary? (1) Basic salary is the compensation used to determine LEOFF contributions and LEOFF retirement allowances. A payment from an employer to a member does not qualify as basic salary unless it meets the statutory definition of basic salary in RCW 41.26.030(13) which is explained in greater detail in WAC 415-104-311 through 415-104-405.
(2) The definition of basic salary is different for Plan I and Plan
II. WAC 415-104-311 through 415-104-350 define basic salary for Plan I.
WAC 415-104-360 through 415-104-405 define basic salary for Plan II.
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LEOFF PLAN I
NEW SECTION
WAC 415-104-305 Definitions. As used in WAC 415-104-299 through 415-104-405:
(1) "Salary or wages" means payments for services rendered by a law enforcement officer or fire fighter to an employer. Payments which are not for services rendered to an employer are not a salary or wage and do not qualify as basic salary.
(2) "Longevity pay" means a payment in addition to the basic monthly rate of pay that is:
(a) Based solely upon the length of employment with the employer; and
(b) Paid to all law enforcement officers or fire fighters who have served for the same length of time with the employer.
(3) "Position" means the employment held at any particular time.
The employment held is defined by the duties required of the employee as
a condition of employment.
Example: An employer employs two police officers, one who has a high
school diploma and one who has a college degree. Although
both officers have the same duties, the employer designates
the first officer as an "officer 1" and the second officer as
an "officer 2." The distinction between the two levels is
conditioned upon different levels of education. The second
officer is paid at a higher rate. For purposes of determining
basic salary, both officers occupy the same position because
both have the same duties. The difference in their two rates
of pay is an education premium which does not qualify as basic
salary, see WAC 415-104-3302.
(4) "Attached to a position" means a payment conditioned on specific
duties required of the person holding the position.
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NEW SECTION
WAC 415-104-311 How is basic salary for LEOFF Plan I determined? (1) A payment is LEOFF Plan I basic salary if it is part of the basic monthly rate of salary or wages attached to the position or longevity pay. Special salary or wages are not part of the basic monthly rate and do not qualify as basic salary.
(2) Basic salary is earned when the service is rendered, rather than
when payment is made.
Example: If a member works during July but does not receive payment for
the work until August, the basic salary was earned during July
and must be reported to the department as July earnings.
(3) Salary characterizations are based upon the nature of the payment. A payment is basic salary if it meets the criteria of subsection (1) of this section. The name given to the payment is not controlling in determining whether the payment is basic salary. The department determines whether a payment is basic salary by considering:
(a) What the payment is for; and
(b) Whether the reason for the payment brings it within the
statutory definition of basic salary.
Example: A payment based upon educational attainment is not basic
salary for LEOFF Plan I. Describing the payment as a
"longevity" payment does not change the fact that the payment
is for educational attainment. The payment will not be
counted as basic salary despite being identified by the
employer as a longevity payment.
(c) See the following sections for a discussion and examples of the following types of payments:
(i) "Salary or wages" - WAC 415-104-3200 through 415-104-3205;
(ii) "Special salary and wages" - WAC 415-104-330 through 415-104-3305;
(iii) "Payments excluded from basic salary because they are not a
salary or wage" - WAC 415-104-340 through 415-104-3406.
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NEW SECTION
WAC 415-104-3200 Basic monthly rate is LEOFF Plan I basic salary.
The basic monthly rate of compensation paid by an employer to a member
for services rendered is basic salary in Plan I. "Basic monthly rate"
means the rate of salary or wages attached to a position excluding
overtime or special salary or wages.
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NEW SECTION
WAC 415-104-3201 Deferred payments. (1) Deferred payments attached to a position are basic salary. If an employee defers a portion of his or her basic monthly rate of pay it is still basic salary. Deferred payments may include, but are not limited to: Member contributions to LEOFF; salaries or wages deferred pursuant to sections 401(k), 403(b), 414(h), 457, or other similar sections of the United States Internal Revenue Code.
(2) Deferred wages that are not attached to a position are special salary or wages excluded from LEOFF Plan I basic salary.
(a) Employer matching payments are not basic salary. If a member
acquires an additional payment that is conditioned upon taking some
action in addition to providing services, the payment is based upon the
additional action. It is not a salary or wage earned for services
rendered. The payment is not basic salary.
Example: An employer offers to make a contribution to a deferred
compensation plan only if the member elects to defer a portion
of his or her salary. Because the member does not have an
absolute right to receive the additional contribution for
performing the duties required of his or her position, the
payment is special salary or wages and is not basic salary.
(b) Additional deferred compensation offered to an individual is not
basic salary. If an employer pays deferred compensation to a member in
addition to the member's basic rate of pay, the payment is special salary
or wages and does not qualify as basic salary.
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NEW SECTION
WAC 415-104-3202 Retroactive basic salary increases attached to a
position are LEOFF Plan I basic salary. If a payment is part of the
basic monthly rate of salary or wages attached to a position or is a
longevity payment, it is basic salary even if the payment is retroactive.
Payments upon reinstatement or in lieu of reinstatement are not
considered retroactive basic salary increases. For treatment of those
payments see WAC 415-104-3203(3).
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NEW SECTION
WAC 415-104-3203 Paid leave is LEOFF Plan I basic salary. Payments from an employer for authorized paid absences from work are basic salary.
(1) Leave payments earned for services rendered: Most LEOFF members
earn a certain number of leave hours per month, such as sick leave. The
leave hours are earned by rendering service during the month the leave
was accumulated. The payment a member receives when he or she uses an
earned leave day is a deferred salary or wage for services previously
rendered. It is basic salary.
Example: Assume a member accrues eight hours sick leave per month. The
accrued leave in the member's sick leave balance is earned for
personal services rendered during a payroll period. When the
member is absent from work and uses the sick leave, the sick
leave payment is basic salary.
Leave payments earned for services rendered are basic salary
only to the extent that they are equivalent to the basic
salary a member would have earned had the member been working.
The portion of any leave payment that exceeds that amount is
not basic salary.
(2) Leave payments not earned for services rendered: If an employer
authorizes a period of paid leave but does not require the use of leave
previously earned for services rendered, the payment is not a salary or
wage for services rendered. However, RCW 41.26.197 authorizes service
credit for all periods of paid leave. Because the periods are
creditable, the pay received is considered basic salary to the extent
that it is equal to the basic salary the member would have earned had he
or she been working. The portion of a leave payment that exceeds that
amount is not basic salary.
Example: An officer is placed on administrative leave with pay pending
an investigation. Although the officer is not rendering
services, the period is creditable as an authorized paid leave
period under RCW 41.26.197.
(3) Payments upon reinstatement or in lieu of reinstatement are paid leave and therefore qualify as basic salary. The payment will count as basic salary for the payroll periods when the person would have earned the payment had he or she been working.
(a) In order for a payment in lieu of reinstatement to qualify as paid leave the person's termination date must occur after the payroll period(s) when the payment would have been earned.
(b) Payments under WAC 391-45-410 are basic salary for the period(s) covered by the reinstatement.
(c) Payments upon reinstatement or in lieu of reinstatement are basic salary only to the extent that they equal the basic salary a member would have earned had the member been working.
(4) Union leave. Periods of authorized leave to serve as an elected
official of a labor organization which meet the requirements of RCW
41.26.197 qualify for service credit. The salary payments provided by
the employer subject to reimbursement from the union qualify as basic
salary for LEOFF Plan I to the extent that the payments do not exceed the
basic salary for the highest paid job class covered by the collective
bargaining agreement negotiated between the labor organization and the
employer. The portion of any payment identified as paid leave in excess
of that amount is not basic salary.
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NEW SECTION
WAC 415-104-3204 Shift differential is LEOFF Plan I basic salary.
Additional payments to a member for working swing shift or night shift
are attached to the duties of the position, e.g., working a nonstandard
shift. Those payments are basic salary for LEOFF Plan I.
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NEW SECTION
WAC 415-104-3205 Additional duty pay is LEOFF Plan I basic salary.
Salary or wages that a member receives for additional duty assignments
are a part of the basic salary attached to the member's position. Those
payments are basic salary for LEOFF Plan I.
Example: A police officer is assigned to the bomb squad and receives an
additional monthly payment for the hazardous duty assignment.
The additional payment is for duties required by the employer
as part of the member's position. It is attached to the
position and is basic salary for LEOFF Plan I.
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NEW SECTION
WAC 415-104-330 What are special salary or wages? (1) Special salary or wages for services rendered are payments that do not qualify as basic salary because the payment is based upon the attributes of the individual instead of being attached to the position. A payment is not attached to a position if it is not tied to specific duties required of all persons holding the position. Payments that are not attached to a position include but are not limited to the payments described in WAC 415-104-3302 and 415-104-3303.
(2) Longevity pay is not attached to a position because it is based
upon the attributes of an individual. It is, however, specifically
included as part of basic salary under RCW 41.26.030.
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NEW SECTION
WAC 415-104-3301 Educational premium payments are not LEOFF Plan
I basic salary. (1) If an employer provides additional salary based upon
the member's level of education that payment is based upon the attributes
of the individual and is not attached to the position. It is a special
salary or wage and is not basic salary.
Example: An employer employs two different law enforcement officers in
the position of sergeant. Although their duties are the same,
one sergeant receives 3% more in salary than the other because
she has a bachelor's degree which the other lacks. The
additional 3% is not attached to the position because it is
not attached to any additional duties. It is not basic salary
for LEOFF Plan I.
(2) Payments conditioned upon acquiring and maintaining a designated
certification such as emergency medical technician are a form of
educational premium pay. The payment is based upon the attributes of the
individual and is not attached to the position. It is a special salary
or wage and is not basic salary.
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NEW SECTION
WAC 415-104-3302 Performance bonuses are not LEOFF Plan I basic