A Step 3 Grievance (paid using Earnings Code S3G) is a monetary award by which an employee is compensated for the difference between their actual Grade/Position and for work performed Out-of-Title in a higher Grade/Position.

Initiating a Step 3 Grievance:

Pursuant to the negotiated agreements, employees may be compensated for Out-of-Title services performed in a higher grade/position. Such awards by the Office of Employee Relations (OER) are determined at Step 3 of an employee-filed grievance (the New York Grievance Appeals Board governs Management/Confidential grievance decisions).

On receipt of the grievance, OER forwards it to the Director of Classification and Compensation for review and decision. A determination is issued as to whether the employee is working Out-Of-Title, at what grade level the employee will be compensated, and for what timeframe the employee should be compensated for performing this work. If the resultant decision is in favor of the employee, one of the following types of payment periods will be covered:

1.  A begin date and end date as indicated in the Grievance.
   OR
2. A begin date as indicated in the Grievance and an end date of either “Through the Date the Out-of-Title Work Ceases” or no more than 30 days after the Grievance was signed, whichever comes first (M/C employees are not entitled to this option).
   Note: The start date may be no more than 15 calendar days prior to the filing of the Grievance for all bargaining units except Management Confidential (M/C), which can be no more than 45 calendar days.

Extensions:

If the second type of date determination is used, the Agency may extend the Grievance for up to 2 six-pay period extensions by sending first and second (if applicable) extension letters to the Director of OSC Bureau of State Payroll Services. A third extension may be authorized by OER (for a non-specific timeframe). If the employee is continuing to work Out-of-Title beyond the third extension, they must file a new Grievance.

• Extension letters must be uploaded to NYSTEP prior to entry and approval in PayServ.
• M/C employees are not entitled to any extensions and must file a new Grievance for any time worked beyond the scope of the original decision.

The approved Out-of-Title Grievance and any extension letters will be available for view on NYSTEP by the employees’ agency and OCS payroll personnel with the exception of grievances pertaining to M/C employees. This grievance paperwork must be sent to your OSC Auditor.

Calculating the Out-of-Title Salary:

1. Determine the employee’s actual salary for the period covered in the Settlement.
   • The employee’s actual salary used in the S3G calculation must be the one in effect on the payment dates of the Grievance. For example, if the Grievance dates are 4/1/2022 – 5/1/2022 and the employee had a raise on 6/1/2022, the salary in effect on the payment dates (4/1 – 5/1/2022), which is prior to the raise, must be used in the calculation.
   • If there is a change in salary during the payment dates of the Grievance, a separate calculation must be done for each change in salary. Following the above example, if the Grievance was extended to include 5/2/2022 – 7/1/2022, the calculation must be split between 5/2/2022 – 5/31/2022 and 6/1/2022 – 7/1/2022.
2. Determine what the employee would be making if they were in the Out-of-Title position for the period of the Settlement.
   • Ensure the appropriate Out-of-Title Position’s Bargaining Unit Salary Chart for the respective fiscal year is used.
   • Calculate the promotional salary by multiplying the employee’s current salary (plus longevity payment (Earnings Codes LLS or LGS) if eligible for portability) by the appropriate promotional percent.
     • Portability: If a PEF employee has an LLS or LGS paid on or after 9/14/2004 in the lower grade or a CSEA employee has an LLS or LGS paid on or after 4/1/2020 in the lower grade, add the longevity payment to the annual salary and then promote to determine the new salary.
     • Promotional Percent: 1 ½ % for the promotion itself, and 1 ½% for each grade level of the promotion. (Example: SG6 to SG9 = 6% (1 ½% + 1 ½% + 1 ½% + 1 ½%)).
   • Determine if hiring rate of the Out-of-Title grade or the resulting promotional calculation should be used for the Out-of-Title salary. If the resulting promotional calculation is less than the applicable hiring rate of the Out-of-Title position, use the applicable hiring rate. Otherwise, use the promotional salary calculated above.
   • Note: Job Rate of the higher grade can be exceeded using the promotion method.

Reminders

• If the bargaining unit of the Out-of-Title position has a different raise percentage than the bargaining unit of the employee’s regular title in the fiscal year that the Grievance takes place, refer to State Agencies Bulletin No. 702 for the appropriate calculation methodology.
• Always round up when calculating a promotion salary.
• In all cases, an employee who previously held a higher grade must have their salary history reviewed in order to determine if reinstatement and salary reconstruction based on the former higher grade will result in a higher salary than the current promotion calculation.
  • Reconstruction should include credit for the higher grade, any performance advances earned and not paid, and any raises missed. This salary should be compared to the current resultant promotion calculation.

Overtime Paid Above Employee’s Straight Rate Included in S3G:

As the agency is aware of what duties were being performed during the overtime period, it is at the agency's discretion whether to adjust overtime to account for Out-of-Title work.

If it is determined the overtime was performed in the Out-of-Title position, the following calculation methodology should be applied:

• The overtime rate should always be calculated as the difference between the OT rate the employee receives in their current title and the OT rate they would receive if actually promoted into the Grievance title. This amount should be included with the S3G payment in Time Entry and should not be paid via a separate Earnings Code.
• As determined by the NYS Division of the Budget, when calculating Out-of-Title overtime, the OT factor used for both the regular title and the Out-of-Title position should be based on the employee’s regular title. For example, if an employee is a CSEA Gr 11 working Out-of-Title as an M/C Gr 18, the calculation should use the CSEA OT factor (which is currently at .00072) for both titles.
• If the employee is receiving LLS or LGS on the payment dates of the Grievance, regardless of portability, they should receive it in the calculation of their regular title’s overtime rate.
• If an employee is receiving LLS or LGS in their current title, the employee is eligible for LLS/LGS portability and the resulting promotional salary is equal to or greater than the job rate of the Out-of-Title position, the original LLS/LGS amount should be included in the calculation of overtime in the employee’s Grievance title.
  • If the resulting salary is less than the Out-of-Title job rate or the employee is ineligible for portability, do not include the LLS/LGS.

Additional Codes Included in S3G

As the agency is aware of what duties were being performed during the overtime/holiday period, it is at the agency's discretion whether to adjust Earnings Code OTB (OT Straight Rate for Annuals), Earnings Code HPA (Holiday Pay) and Earnings Code HPB (Holiday Pay 1.5) to reflect Out-of-Title work.

If it is determined the OTB, HPA or HPB were performed in the Out-of-Title position, the following calculation methodology should be applied.

• To calculate the hourly HPA, HPB or OTB rates, multiply the annual difference in salaries by the respective factors:
  • OTB: 0.000479450 (Non-Leap Year), 0.000478137 (Leap Year)
  • HPA: 0.000479450 (Non-Leap Year), 0.000478137 (Leap Year)
  • HPB: 0.000719175 (Non-Leap Year), 0.000717206 (Leap Year)
    • Note: LLS and LGS are not a factor in the above codes and should not be included in the calculation of OTB, HPA and HPB.
    • The above codes are calculated per hour. For example, 1 day of OTB equates to 8 hours of pay.

Calculating the Final S3G Amount:

Once all final salary, overtime (if applicable), and holiday (if applicable) calculations are completed, the bi-weekly S3G payment can be calculated as follows:

1. Subtract the salary of the lower grade from the newly calculated higher graded salary.
2. Multiply the difference in salaries by the appropriate factor (.038356 Non-Leap Year or .038251 Leap Year) to determine the difference in the bi-weekly amounts.
3. Multiply the bi-weekly difference by the number of pay periods to be paid. (Example: To pay an employee 8 pay periods and 4 days, multiply the bi-weekly difference by 8.4 to determine the total owed for that timeframe).
4. Repeat steps 1-3 each time there is a salary change on the employee’s record and at the beginning of each fiscal year if the approved Grievance spans multiple fiscal years.

Entering the S3G Into PayServ:

Once all applicable documentation has been uploaded in NYSTEP (for employees in M/C titles, agencies must send the documentation to their OSC auditor) and the calculation has been completed, the S3G can be entered into PayServ as follows:

• General Comments indicating:
  • The employee’s regular grade during the Grievance period.
  • What grade and bargaining unit the Director of Classification and Compensation determined the employee was working Out-of-Title during the timeframe noted.
  • The dates of payment for the Grievance, including any extension information.
  • The Grievance calculation (As explained above).
  • Overtime and Holiday Pay information (If applicable):
    • The overtime/holiday calculations of the Out-of-Title position and regular position.
    • The difference between both overtime/holiday rates.
    • The total amount of overtime/holiday hours to be paid (if any) at the higher rate.

Time Entry Payment with the below information:

• Earnings Begin and Earnings End Date
  • This should be the applicable begin and end date of the approved Grievance being paid.
  • As previously mentioned, these dates should be split accordingly based on changes in the employee’s regular salary or changes in fiscal year.
• Earnings Code S3G
• S3G Amount Owed (Bi-Weekly S3G Amount + Out-of-Title Overtime Adjustment + Out-of-Title Holiday Pay Adjustment)

OSC Agrees with Calculation:

If the OSC auditor agrees with the agency’s calculations in General Comments, they will approve the S3G in Time Entry. OSC will also create additional General Comments to support the agreed upon calculation. This comment will include:

• An indication that the necessary documentation is on file in NYSTEP (or the S3G Folder if employee is M/C) for the approved dates of the Grievance.
• The approved dates of the Grievance as well as any extension information as applicable.
• The bi-weekly and overtime/holiday (if applicable) rate(s) that OSC calculated and agrees with.

OSC Disagrees with Calculation:

If the OSC auditor does NOT agree with the agency’s calculations, or the necessary information is not entered in general comments, they will contact the agency to discuss the disagreement. The agency will be instructed to either resubmit the S3G transaction in the current pay period or enter in a future pay period.

Once the agency and OSC agree as to how the S3G should be paid, the steps above must be followed.

Last Updated 10/27/2025