Purpose

The purpose of this bulletin is to inform agencies of OSC’s upcoming automatic processing of Shift Differential (Earnings Code SDF) changes and to provide agency instructions for calculating and processing future SDF payments for specific nursing titles.

Affected Employees

All employees who meet the eligibility criteria below are affected.

Note: The new SDF percentages do not apply to employees currently at the State University of New York Hospitals. Their Shift Differential payment methodology remains the same.

Background

The Division of the Budget letter dated 12/05/2022 authorized Shift Differential payment amount changes (Civil Service Law 130.6) for specific nursing titles.

Effective Dates

The changes to Earnings Code SDF will be paid using the following effective dates and check dates.

Pay Cycle/Pay Period Type	Effective Date	Check Date
Administration/Lag	12/22/2022	02/01/2023
Institution/Lag	12/29/2022	02/09/2023

Eligibility Criteria

Employees in one of the titles appearing on the Nursing Titles Reallocation list who are receiving Earnings Code SDF on or after the effective dates listed above are eligible for a change to their SDF payment amount.

Note: Employees in a Nurse 1 title (grade 14) may be eligible to move to a Graduate Nurse title (grade 14) or a Registered Nurse 1 title (grade 18), depending on their qualifications. Therefore, OSC will update all employees in a Nurse 1 title to a Graduate Nurse title (grade 14) and calculate and insert the SDF Additional Pay row using the reallocated salary of the Graduate Nurse title (grade 14). Agencies will be responsible for determining which title an employee is eligible to move into. If the employee qualifies for the Registered Nurse 1 title, the agency must request an update to the employee’s SDF payment amount using the employee’s Registered Nurse 1 reallocated salary.

Please refer to Agency Actions below for additional information on adjusting SDF amounts.

Please refer to Payroll Bulletin No. 2096 for additional information on processing position and/or salary changes.

OSC Actions

For eligible employees with an active SDF row on the Additional Pay page as of the Reallocation effective date, OSC will automatically insert a row on the Additional Pay page for each effective date the employee is eligible if a row does not already exist with the respective effective date and update the Annual Addl Earnings amount with the applicable rate as described below.

If a row with an effective date equal to the effective date of an applicable increase already exists, or there is a row(s) with an effective date greater than the respective effective date, the Annual Addl Earnings amount will be updated on the existing row with the applicable rate as described below provided the employee remains eligible.

Earnings Code:	SDF
Effective Dates:	12/22/2022 (Administration) 12/29/2022 (Institution)
Annual Addl Earnings:	7% x Employee’s Annual Compensation Rate (excluding Additional Pay Earnings) for Evening shifts, prorated for employees regularly assigned to work a combination of day, evening and/or night shifts.*  10% x Employee’s Annual Compensation Rate (excluding Additional Pay Earnings) for Night Shifts, prorated for employees regularly assigned to work a combination of day, evening and/or night shifts.*

* If an employee’s shift overlaps both the evening and night shifts, agencies must determine where the majority of the employee’s shift falls. The employee’s SDF payment amount must be calculated using the shift that the majority of their hours fall in. In the event an employee’s shift is split equally between the evening and night shift, use the more generous percentage (night shift) when determining the employee’s SDF payment amount.

Automatic Retroactive Processing

OSC will automatically calculate retroactive adjustments for Additional Pay for Earnings Code SDF resulting from processing of the Retroactive changes, and for Time Entry earnings that are calculated by the system based on Additional Pay factors, such as OT for Annual 2080 (OCS) and Holiday Pay (HPA), resulting from the Retroactive changes to Earnings Code SDF.

If an employee receives a payment and has worked in more than one agency but has been paid by all agencies in the same Employee Record Number since the effective date of the payment, all retroactive adjustments will be paid in the most current agency.

If an employee receives a payment and has worked in more than one agency and has been paid in more than one Employee Record Number since the effective date of the payment, the retroactive adjustments will be paid in the most current agency of the Employee Record Number in which the payment was made.

Agency Actions

To pay Shift Pay Differential (SDF) to employees who return from an authorized leave of absence after automatic processing is complete or who subsequently require a change to their Annual Addl Earnings SDF payment amount after automatic processing, agencies must submit the following information on the Additional Pay page using the appropriate Earnings Code:

Shift Pay Differential (SDF)

Earnings Code:	SDF
Effective Dates:	Date employee becomes eligible for SDF and/or   Date the employee requires a change to their SDF amount as a result of a change on Job Data or a shift change.
Annual Addl Earnings:	7% x Employee’s Annual Compensation Rate (excluding Additional Pay Earnings) for Evening shifts, prorated for employees regularly assigned to work a combination of day, evening and/or night shifts.   10% x Employee’s Annual Compensation Rate (excluding Additional Pay Earnings) for Night Shifts, prorated for employees regularly assigned to work a combination of day, evening and/or night shifts.

Note: If a change is needed to an Additional Pay row that currently exists on an employee’s Additional Pay record, the agency must submit a Data Change/Correct History (DTA/COR). Please refer to Payroll Bulletin No. 741 for more information.

Agency Actions - Retroactive Processing

Reporting Retroactive Adjustments

Time Entry earnings codes that are submitted with an amount will not be adjusted automatically. Therefore, beginning in Administration and Institution Pay Period 22L, agencies must report the adjustment amount for earnings codes such as Out of Title Overtime (Earnings Code OTT).

Correcting an Automatic Retroactive Adjustment

When certain conditions exist in an employee’s record, the automatic retroactive adjustment may be incorrect. Therefore, the agency is responsible for identifying employees who meet the following conditions and, if necessary, submitting the necessary adjustment:

• If an employee has a check returned or exchanged on an AC-230 for dates on or after the effective date of the payment, the payroll system does not consider the AC-230 when calculating the automatic retroactive adjustment.
• Adjustments for earnings that are calculated automatically, such as OT for Annuals 2080 (Earnings Code OCS), will be calculated incorrectly if the dates previously reported as a single entry on the Time Entry page overlap the effective date of the payment.  The system will calculate an adjustment for all earnings reported in a single entry based on the salary in effect on the Earnings End Date.
• For employees who had a change reported on the Job Data page since the effective date of the payment and the action resulted in an overpayment of earnings, the automatic negative retroactive adjustment may not have been processed because the overpayment was either not recoverable or was recovered using an overpayment earnings code or an AC-230. In this case, the negative retroactive adjustment may be re-generated when the payment is processed. OSC will turn off (not process) the automatic negative adjustment for these employees since in most cases these overpayments were either not recoverable or recovered using another method.
• If an overpayment of earnings is identified after the automatic payment is processed but before the paycheck is received by the employee, the employee must be notified of the overpayment and the adjustment that will be reported in a subsequent pay period.

Submitting an Adjustment

When an adjustment is needed for COVID-19 overtime such as Covid-19 OT Override (Earnings Code CVO), Earnings Code ARC (Adjust Retro Raise for C19 OT) must be used to process the adjustment. When an adjustment is needed for non-COVID-19 related overtime or recall such as Out of Title Overtime (Earnings Code OTT), Earnings Code ARO (Adj Retro Raise for OT and RCL) must be used to process the adjustment. Please refer to Payroll Bulletin No. 1893 Reporting Adjustments to Overtime for more information. Agencies must continue to use Earnings Code AJR (Adjust Raise) for all other override Time Entry Earnings Codes requiring a manual adjustment as a result of a retro salary increase.

To process a retroactive adjustment or correct an automatic retroactive adjustment, agencies must submit the following information on the Time Entry page or the Time Entry Interface (NPAY502) using the Earnings Code AJR, ARC or ARO:

Earnings Begin Date:	The first date included in the adjustment
Earnings End Date:	The last date included in the adjustment
Earn Code:	AJR, ARC and/or ARO
Amount:	Amount to be adjusted
Comments:	An explanation of the adjustment

Tax Information

These monies are taxable income and are subject to all employment taxes and income taxes. These monies will be included in the employee’s taxable gross and will be reported on the employee’s Form W-2.

The adjustments using Earnings Codes AJR, ARC, and ARO, and all retroactive adjustments using Earnings Codes RXX are supplemental taxable wages, will be included in the employee’s taxable gross and are subject to all employment and income taxes.

Federal, State, and New York City income tax withholding will be calculated using the Aggregate method. Yonkers income tax withholding will be calculated using the Flat Rate method. Yonkers Flat Rate Withholding is 1.95975% for Yonkers residents and 0.50% for Yonkers non-residents.

Special Wage Payments for Individuals Who Filed for Retirement Social Security Benefits

Per Internal Revenue Service Publication 957, OSC will report all retro payments made to individuals who have filed for Social Security benefits to the Social Security Administration (SSA).

Since PayServ does not include this information, OSC will mail a Request for Special Wage Payment Report to inactive individuals who are 62 or older in the calendar year and to active employees with the New York Retiree Indicator checked in Modify a Person who receive the retroactive payment. Recipients of this mailing will be asked to fill out the request and return it to OSC for inclusion on the Special Wage Payment report to SSA.

This report will be submitted to SSA after the close of the 2022 tax year.  It is important that agencies ensure the New York Retiree Indicator box is checked for rehired retirees. Please see Payroll Bulletin No. 1728 for further details on the New York Retiree Indicator box.

Undeliverable Checks

When a valid payroll check is undeliverable due to the agency’s inability to locate the employee, the agency should follow the Agency Actions identified in Payroll Bulletin No. 1786.

Checks issued to eligible employees who are now deceased should be submitted as a stop payment request with a reason of Exchange in PayServ. The required AC 1476, Next of Kin Affidavit, and original death certificate should be submitted to the Payroll Reversal and Exchange mailbox at the same time as the stop payment request. If a Next of Kin Affidavit has been previously submitted for a deceased employee’s payroll check, OSC will accept a photocopy of this form along with a new Report of Check Exchange.

Payroll Register and Employee’s Paycheck/Advice

All retroactive adjustments will be displayed on the Payroll Register using the appropriate Earnings Code(s) and the amount paid and will be displayed on the employee’s paycheck stub or direct deposit advice using the appropriate Earnings Description and the amount paid unless the number of earnings codes exceeds 13.  Agencies should utilize Locked Query LQ_PCD_PAYCHECK_EARNINGS_BY_ID to identify a complete list of regular earnings and retroactive adjustments if there are more than 13 earnings codes.

Questions

Questions regarding this bulletin may be directed to the Payroll Earnings mailbox.

Questions regarding position change requests may be directed to the Position Management mailbox.

Questions regarding military information may be directed to the Military Stipend mailbox.