Payroll Processing Guidelines

• Confidential Employees
  
  HEERA defines a "Confidential employee" as "any employee who is required to develop or present management positions with respect to meeting and conferring or whose duties normally require access to confidential information which contributes significantly to the develop of those management positions." Positions usually are considered confidential if the employee:
  
  
  • regularly types grievance responses and maintains the grievance files; or
  
  
  • is directly involved with systemwide or campus meet and confer sessions, including participating in management caucuses to evaluate information and determine the campus' position.
  
  Confidential employees are not represented by an exclusive bargaining representative. (Reference HEERA, under Government Code, §3562(d))
  
  
  1. Movement to or from a confidential designation must be made on a current or prospective basis and administered in a manner that will allow the campus to process associated documentation timely and in concert with the payroll cutoff date for the respective pay period.
     
     
  2. Due to the potential adverse impact on salary and benefits, changes to or from a confidential status cannot be retroactive. Exceptions to this general rule may be applicable:
     
     
     • if an employee is newly appointed to a confidential position and has never been on the payroll, the effective date of the new appointment can be other than the first day of the respective pay period;
       
       
     • if an employee changes from one confidential position to another, the effective date of change to the new confidential classification can be retroactive;
       
       
     • if an employee is leaving a confidential position and moves to a Management Personnel Plan (MPP) position, the effective date can be retroactive; if an employee is leaving an MPP position and moves to a confidential position, the effective date can be retroactive;
       
       
     • if an employee is moving from a confidential position to another position that does not have the same benefit levels, the effective date must be prospective (e.g., the beginning of the following pay period) due to the possible adverse impact on benefits such as vacation accrual rate and changes in benefit levels for various insurance coverages.
       
       
  3. An employee that occupies a confidential position should be notified in advance that benefits associated with the confidential status are applicable only during the time in which s/he occupies the position. If the employee changes to a non-confidential position, continued eligibility for the same level of benefits associated with the confidential position may be discontinued.
     
     
  4. Pursuant to HEERA, campuses may not appoint an employee to a confidential position and a bargaining unit (represented) position concurrently. If an employee occupies multiple concurrent positions whereby one of them is confidential and the other non-represented, the non-represented position should be MPP-related to stay in accordance with HEERA.
     
     
  5. Any exceptions to these guidelines require prior approval from Systemwide Human Resources.
  
  
For more information, please refer to the Confidential Employees Human Resources Program Guidelines.


• Overpayment — Separated Employees
  Pursuant to State Administrative Manual (SAM) Section 8593.3, state agencies are required to request the State Controller's Office (SCO), Division of Personnel/Payroll Services (PPSD) to flag its records to notify the agency if a separated employee returns to state service whenever:
  
  
  1. A separated employee owes money to the state agency and after three months from the date of separation, the agency is unable to collect the amount owed, and
     
     
  2. The employee separated under conditions that do not preclude his/her reentry to state service.
  
  Campuses should submit such requests via PPT document using a 215 Miscellaneous Change or corrected Special Payment (A54C) transaction. (For special payment corrections, the only position sequence on the database should consist of A54's and CSU Audits sets the record out of service.) The document should be prepared as follows:
  
  

  Document Section	Item #	Via 215 Transaction	Via A54 Transaction
  Transaction Code	ITEM 205	Enter 215 Transaction	Enter A54C Transaction
  Effective Date	ITEM 210	Enter the date following the effective date of separation.	Enter the effective date of the most current A54.
  Employment History Remarks	ITEM 215	Enter "A/R$9999.99"	Enter "A/R$9999.99"

  
  If the employee is subsequently reemployed by another campus or a civil service agency, SCO will notify the campus of the date the employee returns to state service, the name of the employing agency, and the location of employment. Upon receipt of this information, the campus will take appropriate actions to recover amounts owed and submit a second 215 or A54C transaction to identify to CSU Audits that the accounts receivable action has been cleared. The document should be prepared as follows:
  
  

  Document Section	Item #	Via 215 Transaction	Via A54 Transaction
  Transaction Code	ITEM 205	Enter 215 Transaction	Enter A54C Transaction
  Effective Date	ITEM 210	Enter the date following the effective date of the first 215 transaction.	Enter the same effective date as the previous A54C.
  Employment History Remarks	ITEM 215	Enter A/R cleared date	Enter A/R cleared date

  
  
  
  
• Red Circle Rate
  A red circle rate is the employee’s salary rate that is over the salary range maximum of a given classification or skill level. The red circle rate is granted when an employee moves to a classification or skill level with a salary range maximum that is lower than the employee’s current salary rate. The purpose of a red circle rate is to reduce the adverse financial impact on the employee when the employee is moved to a classification or skill level with a lower salary range. HR 2003-16 provides guidelines for establishing red circle rates.
  
  Red Circle Rate, Item 815, is used when an employee is formally assigned to red circle salary. Item 815 may also be used for "Plus Salary" approvals. HR 1992-03 transferred authority to approve payments above the maximum of a given salary range for non-management employees to campus Presidents.
  
  Payment over the maximum for Management Personnel Plan (MPP) Administrator IV employees and Chancellor's Office employees require prior authorization from the vice chancellor of human resources.
  
  HR 1994-30 transferred authority to process Red Circle Rate salaries to the campuses. An employee is moved to red circle status by entering Item 815 on Line G of the Personnel/Payroll Transaction (PPT) document when processing one of the following transaction codes:
  
  

  Trans Code	Transaction Description
  A58	Reinstatement
  A60	Reassignment
  A63	Reclassification
  A65	Demotion

  
  The PPT document is completed in accordance with the required/conditional matrix for the appropriate transaction, with the following notation:
  
  

  Data Item	Description	Action
  122	Class Code	Enter new class code
  311	Salary Step	Enter maximum salary rate/step of the new class code, if applicable
  330	Anniversary Date	Enter MAX
  719	Detail Trans Code	Enter "72" (refer to audit instructions for each applicable transaction code).
  815	Line G	Enter the Red Circle Rate (Plus Salary amount) the employee is authorized to be paid above the maximum of the new class code.
  820	Assign Salary Rate	Enter maximum salary rate of new class/range code.

  
  General Information:
  
  
  1. Service-based salary increases (SSI's) and performance increases (PSI's) are not authorized when an employee is on red circle rate status.
     
     
  2. General salary increases (GSI's) are applied to the salary rates, steps and ranges of class codes. The GSI transaction will be posted to the employee's employment history database record to reflect the salary increases for the class code, however, the employee will not receive a salary increase until such time that the maximum salary rate for the current class code exceeds the total amount authorized for the red circle rate. Pursuant to the faculty bargaining unit agreement, full professors paid over the range maximum* have an exception in this instance.
     
     
  3. The State Controller's Office will remove an employee from red circle status at the time a GSI meets or exceeds the total amount authorized for the red circle rate.
     
     
  4. Upon movement to a new class on red circle status, the employee's probationary status should be reviewed for conformity to CSU policy or applicable collective bargaining agreement.
     
     
  5. Overtime is paid based upon the "actual salary rate", which includes the red circle rate amount.
     
     
  6. Non-compensable absences are computed at the hourly or daily equivalent of the "actual salary rate" which includes the red circle amount.
     
     
  7. Item 719 must be entered on all transactions when an employee has a red circle or plus salary rate, otherwise audit message 206-05 will be received.
     
     
  8. If the employee loses eligibility for red circle status because the authorization has expired, process a 'CRO" transaction and delete Line G, Item 815. If the employee loses eligibility for red circle status as a result of subsequent movement between classes, process the appropriate PPT transaction and delete Line G, Item 815. After Item 815, add Item 820, review and make appropriate changes.
     
     * Full Professors Paid Over the Range Maximum:
     Pursuant to Article 31 of the Faculty bargaining unit agreement, instructional faculty employees at the "full professor" rank may be paid at a salary rate that exceeds the range maximum in their respective classification. They may exceed the maximum as a new hire, promotion or as a result of a salary increase allowed by the faculty contract. Rehired annuitants may exceed the maximum only if their salary at the time of retirement exceeded the maximum. In the case of a reassignment (A60), the maximum can be exceeded only if the position before was a full professor paid above the maximum.
     
     Full professors paid over the range maximum are eligible to receive general salary increases (GSI's) and performance-based salary increases (PSI's). This provision only applies to faculty in range code 5 of designated Faculty classifications. For more information and a listing of authorized class codes, refer to the Salary Program Information and Processing Instructions for Unit 3.
  
  The PPT document is completed in accordance with the required/conditional matrix for the "CRO" transaction, with the following notation:
  
  

  Data Item	Description	Action
  330	Anniversary Date	Enter MAX
  719	Detail Trans Code	Enter "72" (refer to audit instructions for each applicable transaction code).
  815	Line G	Enter the Plus Salary amount the employee is authorized to be paid above the range maximum.
  820	Line G	Enter maximum salary rate of class/range code.
  958	Final Salary Anniversary	Enter MAX

  
  
  
  
• Requirements for Placing Lecturers on Sabbatical or Difference-in-Pay Leaves
  Pursuant to the bargaining unit agreement, a faculty unit employee shall render service to the CSU upon return from a sabbatical or difference-in-pay leave at the rate of one (1) term of service for each term of leave. For eligible Lecturers granted a paid leave for Sabbatical or Difference-in-Pay, the length of appointment on the PIMS data base at the time the leave commences must at minimum, be sufficient in length to cover the period of the leave and the return service obligation.
  
  

  Example:
  One semester leave	= an appointment length of at least one year
  One quarter leave	= an appointment length of at least two quarters
  One year leave	= an appointment length of at least two years

  
  
  
  
• Sabbatical Leave, Difference-in-Pay, Special Research/Creative Activity Leave Forfeiture
  Pursuant to a bargaining unit agreement, faculty unit employees meeting certain eligibility requirements may take a paid Sabbatical, Difference-In-Pay and/or Special Research/Creative Activity leave. Such paid leave shall not be granted until the applicant has filed with the respective campus President, a suitable bond or an accepted statement of assets and/or a promissory note. The purpose of the bond, statement of assets and/or promissory note is to indemnify the State of California against loss in the event the employee fails to render the required return service in the CSU following completion of the leave.
  
  The amount of the bond, statement of assets and/or promissory note must at least be equal to the amount of salary, projected to include salary increases and including State share amounts for benefits, that will be paid to the employee during the period of leave. The obligation, however, shall be exonerated if the failure to complete the requisite return service is through no fault of the employee (e.g., death, disability, layoff), or by waiver through mutual consent of the California State University and the faculty member.
  
  Whether the employee posted a bond or filed a statement of assets and/or promissory note, the repayment shall be recovered in a single sum. If a bond was posted and the employee refuses repayment, the campus shall file the necessary claim with the bonding company. Campus staff must consult with their assigned campus attorney to assist them in drafting any correspondence to the employee requesting payment.
  
  Collection and Documentation Procedures:
  
  
  1. Sabbatical Leave forfeitures are not processed through the state payroll system. Campuses should not attempt to establish an accounts receivable through the payroll system or otherwise attempt to delete or void the leave action from the employment history database. The individual's employment and payroll record for the leave period must remain in tact.
     
     
  2. Monthly Compendium Report A15 (PDC0310-2), Leave of Absence Expiration Report, is available on CIRS to assist campuses in monitoring leaves of absences. During the month that the Sabbatical, Difference-in-Pay, or Special Research/Creative Activity leave will expire, the campus should access the State Controller's Office (SCO) Pay History file to obtain the individual's payment history, including state share amounts. A print out of the pay history data should be retained until the employee has completed the return service obligation.
     
     
  3. If pay history records are not available to the campus, individuals on file with the SCO with the authority to obtain pay history information for their respective campus must contact the SCO to obtain wage detail information, including mandatory and voluntary deductions and state share amounts for the affected employee. The campus must provide the employee's name, social security number and affected pay periods. The request should be sent to:
     
     

     Attention: W-2 Unit Personnel/Payroll Services Division State Controller's Office 300 Capital Mall Sacramento, CA 95814

     
     
  4. The State does not accept installment or progress payments. The repayment must be recovered and remitted to the State in a single sum. Campuses who accept installment or progress payments from the employee must hold them until the full amount is recovered before remitting it to the State.
     
     
  5. When the total amount is collected from the employee or the bonding company, the funds are deposited in the campus "CASH RECEIVED" account and sent to the State Treasurer via Remittance Advice Form CA21. The funds are then credited by the Controller to the appropriation(s) from which the salary was originally paid. Forfeitures should not be remitted via STD995A because it offsets the employee's current year wages.
  
  
  
  
• Separation/Disposition of Contributions from California Public Employees' Retirement System (CalPERS)
  Employees who permanently separate from CalPERS-covered employment and have contributions on deposit may leave the funds on deposit or elect to refund or roll-over their funds by completing a Separation/Disposition of CalPERS Contributions document (Std. Form 687). Information provided on this form is used by the State Controller's Office (SCO) and the Public Employee's Retirement System (CalPERS) for the purposes of identification and processing retirement contributions. Failure to provide accurate information may result in an inaccurate determination of credit for State service, payroll calculations and retirement and/or health contributions. Additional information can be obtained at the CalPERS Web site.
  
  General Information:
  
  
  • Transaction "E02" is used to process separation/disposition of CalPERS contributions information.
    
    
  • Except in the instance that a home address is changing, it is not necessary to process this document if the employee is not a member of CalPERS. Retiring employees should not complete Section D of this document.
    
    
  • If a separating employee also has a name change, an Employee Action Request (EAR) document should also be completed.
    
    
  • Section D is completed by the CalPERS member if s/he is entitled to make an election. If the member is unavailable to complete Section D or leaves employment without completing Std. 687, the campus completes Item H01. Members electing a refund of contributions will be subject to mandatory federal tax withholding of 20% on the untaxed portion of their refund. Members may also elect to have 2% California State tax withheld from the untaxed portion of their refund. Members electing to roll over the untaxed portion of the refund into an IRA or other eligible retirement plan must submit the appropriate forms to the CalPERS Refunds Unit. If a member elects funds to remain on deposit and later requests a refund, the individual must contact the CalPERS Refunds Unit for assistance.
    
    
  • An E02 for refund cannot be processed if it has been 11 or more days after the separation has been keyed. In this instance, the employee must request refund from the CalPERS Refund Unit.
    
    
  • The employee and spouse must sign Item G. If the campus cannot obtain the employee's signature and/or election, then Item H01 should be checked and a brief reason provided for no signature (e.g. employee moved, no forwarding address; employee AWOL; employee out of country, etc.). If the spouse is not available to sign in Item G, the last page "Justification for Nonsignature of Spouse" must be completed.
    
    
  • Changes of address received by the campus after separation documents have been processed should be processed on the EAR document.
    
    
  • The date entered by the campus in Item H02 should be the last date that the employee's pay was subject to a CalPERS contribution deduction (*exclusion amounts are itemized in the chart below). The date entered may be the same as or earlier than the separation date entered on the Personnel/Payroll Transaction (PPT) document, but cannot be a date after the separation date. For example, the date entered in Item H02 may be earlier than the employee's separation date:
    
    
    • if the employee resigns while on leave of absence without pay (including NDI) or at the expiration of an unpaid leave period.
      
      
    • if the employee is hourly intermittent and had no earnings in the month of separation.
      
      
    • if gross earnings for the pay period of separation are equal to or less than the exclusion amount.
      
      
    • if gross earnings never exceeded the exclusion amount (in this instance, enter the employment date as shown on the PPT roster card).
    
    
    * Exclusion Amounts by CalPERS Membership Category

    Exclusion Amount	Item 505	Item 505 Description
    $513	08	CalPERS w/social security & medicare
    $317	20	CalPERS Survivors, Non-Survivors w/medicare
    $238	51, 53	CalPERS Peace Officer, Unit 8, Non-Unit 8, no social security or medicare
    $238	52, 54	CalPERS Peace Officer, Unit 8, Non-Unit 8, w/medicare

  
  
  
  
• Trade Rates (Casual Employment)
  Individuals hired under "Trade Rate" authority are referred for campus employment by a local craft or trade union to perform a specific task of a temporary nature. HR 2000-18 delegated authority to the campuses to authorize wage and benefit rates within the guidelines established by the Chancellor's Office. Wage and benefit payment determinations are made in accordance with general prevailing wage rates established by the Department of Industrial Relations, Division of Labor Statistics and Research. Campuses hiring casual employment workers must abide by the general prevailing rates established for their respective county.
  
  Trade rate classifications are located in the Excluded (E99) section of the CSU Salary Schedule. Trade rate employees are ineligible for retirement, vacation, sick leave, holiday, and other benefits provided to employees of the CSU. Wage and benefit determinations authorized by the Department of Industrial Relations typically include allocations for Health and Welfare, Pension, Vacation and Holiday benefits. Separate benefit payments are usually made on behalf of the employee to a benefit trust fund. Reimbursement for authorized travel and per diem is processed on a travel expense claim.
  
  For appointment and payroll processing guidelines, refer to HR 2000-18, Attachment A, and the State Controller's Office Payroll Procedures Manual, Sections G700 and H610.