memo:Past MEMOS
End of Cease Fire (6/30/99)
PEF One-Week Cease Fire Memo (6/25/99)
1995-1999 PEF Contract Sunset Memo (4/2/99)
Termination of PSTP Vendor Contract (3/12/99)
CSEA Contract Update (2/18/99)
Executive Budget SFY 99-00 – Summary of Major Provisions (1/29/99)
pcStat Computer Software Training Program (1/22/99)
Taxable Education Benefit Update Memo #3 (Last updated 1/22/99)
Taxable Education Benefit Update Memo #2 (Last updated 1/12/99)
Taxable Education Benefit Update Memo (Last updated 12/24/98)
Taxable Education Benefit Memo (Last updated 12/22/98)
TO: PEF
Officers
Executive Board Representatives
Council Leaders
DATE: June 30, 1999
SUBJ: End of Cease-Fire
This morning I met with representatives of the Governor's Office and they
were unwilling to increase their salary proposal from the four zeros. Based on this unsatisfactory response, our members
once again need to continue their aggressive campaign of rallies, letters to the editors
and calls to the Governor's Office to put pressure on the Governor to treat us in a fair
way.
To assist and motivate you in these
activities, I have attached information
that we received today regarding the January 1999 salary increases of the State
Commissioners. You will note that they
received increases from approximately $25,000-$45,000 a year. We have been informed that they received their
last salary increase approximately seven years ago.
This information reinforces our position that management is being treated
like royalty while the workers continue to get crumbs.
We are committed to assuring that our members are treated in a fair way and
this is the message we have consistently transmitted to the Governor's Office, the
legislature and the general public.
Additional coordinated mobilization
activities will be distributed to our Regional Coordinators after the 4th of
July holiday. We have no choice but to
confront the Governor in a way that forces him to meet our needs. Thank you for the good work you have done to
date. By keeping focused on the contract and
speaking with one voice, we ultimately will be successful.
Roger E. Benson
Attachment
cc: PEF
Staff
TO: Regional Coordinators
Executive Board Members
Council Leaders
DATE: June 24, 1999
SUBJ: PEF One-Week Cease-fire
As you are aware, we have had in the
last month a series of progressively intense rallies and PR around the State's failure to
negotiate a fair contract. This culminated
on Tuesday, the June 22nd with what most would characterize as a very hostile
confrontation between 300 union members and the Governor at the ground breaking for the
new Comptroller's office in Albany. The
Governor was so flustered that during the speech he actually indicated the State had never
offered the unions any zeros.
Then on Wednesday, the 23rd,
thirty PEF members and staff with support from another 200-300 union members led a very
loud and disruptive rally at the COBO Center in Detroit, Michigan, while the Governor
spoke inside. We received press in both Detroit and Albany as a result of this event. During this time, I have been in touch personally
and through intermediaries with the Governor's Office and GOER. It is clear that they are getting the message
that the zeros cannot continue.
I will be meeting with them next week
and prior to these meetings, I would like our local leaders to back off on the level of
hostile attacks on the Governor. This one-week
cease-fire will be a display of PEF's willingness to work with management to settle the
contract in the way that meets the parties needs. However,
the scheduled rallies in Binghamton, Buffalo and Utica should continue. It is important that the members be involved in
fighting for their contract.
If the above meetings with management
are not productive, we will immediately ask that our membership again very strongly engage
management and specifically the Governor. This one-week strategic cease-fire is
intended to demonstrate that we have the ability to move our membership in a unified way. The Governor's office now understands that PEF is
a force with which to be reckoned.
Please accept, on behalf of the other
Statewide Officers, our appreciation for your efforts during the past two months. I can assure you that if the Governor is
unresponsive during the next week, we will reengage him in a way that makes the past two
months feel like a walk in the park. Unfortunately,
the Pataki administration appears only to respond to power and when we work together we
have that power.
Thank you.
Roger E. Benson
TO: Executive Board Members, Statewide L/M Chairs and Field Staff
FROM: Bob Carrothers, Director of Contract Administration
DATE: April 1, 1999
RE: 1995-99 PEF Contract
As there is no successor agreement in place to the 1995-99 PEF Contract, I wanted to provide information to help you answer questions members might have about the continuation of benefits once the April 1, 1999 expiration date is reached. The following is all based on our best understanding of the current situation. Of course, the State may change their position, and as in the past, if they terminate benefits, we will take appropriate action.
Assuming that the 1999-2000 State Budget is complete, or there is an emergency appropriation bill passed, the April 1 increments should be reflected in paychecks distributed on April 22 (institution payroll) and April 28 (administrative payroll).
We believe that the State is not questioning their obligation to pay these increments in April 1999, and the first increments which may potentially be in dispute will be those due in April, 2000. Again, this only becomes an issue if there is no successor Agreement in place at that time. (There is an increment payable to 10 month employees due at the beginning of the school year in September. When we negotiated the 1991-95 Contract, the State acknowledged their obligation to pay the increment in the September following the expiration date of the PEF Contract).
Again, assuming the Budget issues are addressed, the longevity payments are scheduled to be made on April 22 and April 29. Although they will be issued along with the regular pay, they will be paid in separate checks on those dates. As a result of an agreement reached during the 1995-99 negotiations, termination of this benefit should not be an issue.
PEF members will continue to receive health benefits without disruption. All Empire Plan, HMO, Prescription Drug, dental and vision benefits are protected and will continue without interruption. The Joint Committee on Health Benefits will continue, but the State is taking the position that there are not available funds to reimburse PEF for the costs associated with the Committee until there is a successor agreement in place.
All of the provisions related to Attendance and Leave continue. Importantly, programs which have been terminated in the past have been protected. VRWS, Leave Donation will continue, and the State has agreed to continue current telecommuting agreements.
Continuation of the PSTP Voucher Program beyond the Spring ’99 semester and the Voucher Alternative Program for course work commenced after March 31, 1999 is dependent on the negotiation and ratification of a new collective bargaining agreement between PEF and the State of New York that includes funding for these programs. While we cannot predict how these programs might change, the programs have, in the past, been made retroactive to the first day of the contract. In the event we are successful in negotiating similar programs in the new agreement, you should retain all receipts for expenses typically covered by these programs. For more specific information on what type of programs are traditionally included, contact the PEF Education and Training Department at extension 328.
While this addresses the "major" issues, there is always the possibility that an agency will take a different position with regard to a particular benefit. If such questions arise, contact your field representative or Contract Administration and we will take appropriate action. If you have any questions about this memo call 1-800-342-4306, extension 223.
memo:
TO: Regional Offices
DATE: February 17, 1999
RE: CSEA Contract Update
Please find attached a summary of the tentative CSEA contract. This information was provided to PEF by CSEA.
Roger E. Benson
cc: Executive Board Members
Council Leaders
PEF Staff
I am pleased to announce we've shaken hands with the state on a new four-year contract
for our members who work in state government.
This agreement strengthens the solid contract language we've fought hard for the last
decade.
It provides pay increases in each of the four years.
It maintains the vital health benefits and prescription drug coverage for CSEA members and
their families.
It also includes a commitment to new programs which will enhance our members' health and
quality of work life.
No contact comes easy with New York State. These were tough talks, but remember: Hammering
out a contract is not a once-in-every-four years event.
We talk daily with the state about contract issues.
When CSEA and the state came to the table late last year to negotiate this contract,
everyone was primed to talk business.
Over the years, we've seen how brinksmanship, saber rattling and public posturing doesn't
guarantee a better deal.
With that in mind, GOER and CSEA worked hard to bring this fair contract in on time. I am
pleased to submit the product of our hard work to our members for their approval.
Four year contract
Pending ratification by CSEA Members and NYS State Legislature, the agreement would go
into effect April 2, 1999 through April 1, 2003.
Compensation
Oct. 1999, 2 percent across-the-board salary increase.
Oct. 2000, 2.5 percent across-the-board salary increase.
Oct. 2001, 3 percent across-the-board salary increase.
Oct. 2002, 3.5 percent across-the board salary increase.
Raises, which will be added to base salaries, go into effect payroll period closest to
October 1, each year. Increments and longevity payments are continued.
Downstate Adjustment
The current amount will increase from $823 to $839 (Oct.1999), $860 (Oct. 2000), $886
(Oct. 2001) and $1,200 (Oct. 2002).
Leave accruals
Maintains existing benefits.
Health benefits
Maintains existing benefits.
Employee Benefit Fund
Dental, eyeglass and work place security benefits are maintained.
Prescription drug benefits and co-payments remain the same until January 2003. The
co-payment is $8 at a community pharmacy and $3 at a mail service pharmacy. Administration
of the prescription drug benefits will be transferred (January 2001) from the CSEA
Employee Benefit Fund to the Empire Plan or the employee's participating HMO. Effective
2003, co-payments will be equal to co-payments in effect for other represented State
employees.
Labor/Management Programs
Funding increased by $350,000 in 2nd year, $325,000 in 3rd year and $390,000 in 4th year.
Governor's Related Press Release
memo:
TO: PEF Officers
Regional Coordinators
Executive Board Representatives
Council Leaders
Shop Stewards PEF Officers
Regional Coordinators
Executive Board Representatives
Council Leaders
Shop Stewards
FROM: Cliff Merchant Cliff Merchant
DATE: January 22, 1999 January 22, 1999
RE: pcStat Computer Software Training Program pcStat Computer Software Training Program
On behalf of the Professional Development Committee, I am pleased to announce a special limited opportunity for PEF represented state employees. PEF represented state employees will now be able to take one free pcSTAT computer training course.
The recently announced pcSTAT Plus program offers New York State agencies the opportunity to obtain personal computer training at a discounted price for employees in all titles and bargaining units, at selected locations across New York State. PEF represented employees can now receive a special bonus of one pcSTAT Plus at no charge to themselves or their agencies from now through March 31, 1999.
Funding from Article 15 of the NYS/PEF negotiated agreement has been set aside to extend this opportunity to PEF represented employees. Please read the attached announcement and post it for all PEF represented employees to see.
attached announcement and post it for all PEF represented employees to see.We encourage everyone to take advantage of this opportunity. Additional courses and/or courses taken after March 31, 1999 must be at the state agency’s expense.
Questions about pcSTAT Plus can be directed to the staff of CSEAP, the administrator of this program at (518) 457-0003. If you have any other questions, please feel free to contact me at (800) 342-4306 ext. 328.
ATTENTION PEF REPRESENTED EMPLOYEES
PEF and GOER are pleased to announce that all PEF represented state employees can receive one free pcSTAT computer software training course if they take it before March 31, 1999. Funding from Article 15 of the NYS/PEF negotiated agreement has been set aside to extend this opportunity to all PEF represented employees.
Starting immediately through March 31, 1999, all NYS PEF represented employees can enroll in one pcSTAT Plus course at no charge. Limited funds have been allocated and will be made available on a first-come, first-serve basis.
This is a one time limited opportunity available to all PEF represented state employees from now until March 31, 1999, at no charge to themselves or their agencies. The course must be taken on or before March 31, 1999.
To take advantage of this offer, please have your agency’s pcSTAT Coordinator use the green pcSTAT Plus form entitled, "Application Form for NYS/PEF Negotiated Funds."
We encourage you to take advantage of this opportunity. Questions on pcSTAT Plus can be directed to the staff of CSEAP, the administrator of this program at (518) 457-0003.
Additional courses and/or courses taken after March 31, 1999 must be taken at the state agency’s expense.
memo:
DATE: January 22, 1999
RE: Taxable Education Assistance Benefit Update #3
On Friday January 15, 1999, PEF met with the Office of the State Comptroller, OSC, along with representatives from the Governor’s Office of Employee Relations, GOER and CSEA.
At this meeting OSC explained their interpretation of the IRS code, which was verified through the use of their selected accounting firm, Peat Marwick and confirmed by our tax specialist from Marvin and Company. We also discussed several exemptions from taxation that are contained in IRS code. In order to qualify for these exemptions the employee and the course have to meet certain requirements. We are reviewing the code in more detail to determine if the exemptions can be determined by the state prior to reporting the liability to the taxing authorities.
OSC has informed us that they are refunding the over deduction of union dues in the January 28, 1999 and February 3, 1999 payroll checks. In addition, they are talking to the retirement system to work out the repayment of the excess retirement contributions that were deducted.
PEF, CSEA and GOER are working out any errors that may have occurred in the data that they reported for their various programs. In our case we are identifying those employees that were reported as having received a taxable benefit, a voucher, but did not use it. Since the voucher was not used no benefit was received. We are working with the colleges to identify those employees so that a corrected W-2 can be produced. We are also rechecking the entire database for any other possible errors or corrections as a result of the college reports.
We began discussing how the withholding should be handled in the future. Several options were discussed including doing a withholding directly from the voucher award and transferring those funds to OSC. However, before this option could be explored in detail GOER stated that they were not interested in implementing this option because they felt it complicated the transfer of funds.
We are meeting again on January 22, 1999 to continue the discussions and to further work out the necessary corrections to the W-2’s being issued to the employees.
Roger E. Benson
President
cc: PEF Staff
memo:
TO: PEF Officers and Regional Offices
DATE: December 31, 1998
SUBJ: Taxable Education Benefit Update #2
Attached are copies of information that OSC is distributing to state agencies and employees impacted by the withholding taxes imposed in the December 23 and December 30, 1998 payroll checks.
We do take exception with item number 1 in the section labeled "What problems remain to be solved?" in the document entitled PAYROLL WITHHOLDING ON EDUCATIONAL ASSISTANCE. The file submitted by PEF was consistent with the directions given by the State for the creation of the tape for the last three years. With the imposition of withholding taxes, the issue has been raised as to whether the educational benefit is taxable when it is received by the employee (the voucher is issued) or when payment is made to the participating college under the contractual agreement between PSTP and the participating college. This issue needs to be resolved and, if necessary, the tax reporting for 1998 needs to be corrected to accurately reflect the benefits received by the employee.
In addition, we were surprised to receive the request for the tape from OSC so early this year. Traditionally, the tape is not requested before the last week of December and the information is only included on the W-2, with a withholding for social security and medicare in the subsequent year. We were concerned that due to the fact that the Fall ’98 semester would not be completed until mid-December 1998, the data may include some inaccurate information due to circumstances beyond the control of the employee or PEF as the administrator of the program. We expressed these concerns to GOER since the contract is with that agency and the request from OSC for the data is sent to PEF via GOER. We subsequently were told by GOER that OSC understood but still wanted the file and they provided us with additional dates to provide for corrections to the W-2 by them or if after January 1, the appropriate state agency could issue a corrected W-2. When we were notified on Tuesday, December 22, by a member that the withholding had been imposed, we notified GOER and they too were unaware that the withholding was taking place instead of simply reporting the information on the employee’s W-2.
We will keep you apprised of the status of this problem as it evolves.
Roger E. Benson
President
cc: Executive Board Representatives
Council Leaders
H. CARL McCALL STATE COMPTROLLER |
STATE OF NEW YORK OFFICE OF THE STATE COMPTROLLER | A.E. SMITH STATE OFFICE BUILDING ALBANY, NEW YORK 12236 |
January 12, 1999
Dear Employee,
Additional taxes have been withheld from your paycheck issued on either December 23, 1998 or December 31, 1998. According to reports filed with the Office of the State Comptroller by the program administrators, you received a taxable educational benefit in 1998. This benefit has been treated as taxable income to you, consistent with section 127 of the Internal Revenue Code. As a result of the conversion to the State’s new payroll system and in accordance with section 3401 of the Internal Revenue Code, your paycheck reflects additional withholding of income tax, social security and Medicare taxes. In previous years, no withholding was taken from your paycheck; the amount of any taxable educational benefit was simply added to your W-2 as taxable income.
We sincerely regret the timing of this withholding and the lack of advance notice. We have alerted your agency’s payroll office that a Cash Advance may be provided to you to alleviate the impact of this withholding. The Cash Advance will need to be repaid within the first four pay periods in 1999.
The Office of the State Comptroller will continue to review all tax questions relating to these educational benefits provided by the State, in conjunction with the Governor’s Office of Employee Relations, Public Employees Federation and Civil Service Employees Association. We hope that this review will enable the State to more appropriately administer tax reporting and withholding and to clearly inform program participants of the tax implications of educational assistance. We will provide you with any new information as soon as it is available. Again, we apologize for the confusion and inconvenience that this may have caused you.
Sincerely,
Joan M. Rapp
Director of State Payroll Services
PAYROLL WITHHOLDING ON EDUCATIONAL ASSISTANCE
What happened?
The Governor’s Office of Employee Relations, the Civil Service Employees Association and the Public Employees Federation reported their 1998 educational assistance payments to OSC, as instructed in an OSC letter to GOER dated October 21, 1998. OSC loaded the computer files provided by these program administrators into PaySR. PaySR calculated and withheld federal, State, and local income taxes and Social Security and Medicare taxes from the employee’s next paycheck (either December 23 or December 31). The withholding was based on the total year-to-date compensation paid to that employee in 1998 (including the one-time addition of the taxable educational benefits) and each employee’s withholding instructions.
OSC did not recognize the resulting impact on employee paychecks until employees and agency payroll offices began calling on Tuesday afternoon, December 22. About 1,300 State employees were affected as follows:
PEF Employees
1,104 were reported as receiving taxable educational benefits. Most received either a $600 payment (580 employees) or a $1,200 payment (356 employees). Based on a sampling of employee records, a $600 payment resulted in an additional $250 in withholding, and a $1,200 payment resulted in an additional $517 in withholding.
CSEA Employees
119 were reported as receiving taxable educational benefits. Most received either $411 (73 employees) or $822 (18 employees), resulting in additional tax withholding of $168 or $342 respectively.
M/C Employees
Out of 54 M/C employees, 25 were reported as receiving $750 in benefits, resulting in additional taxes of $313. Other payments ranged from $107 to $1,500, with the highest payment resulting in additional withholding of about $657 (5 employees).
In addition, the calculation of certain deductions for union dues, agency shop fees, and retirement contributions utilized a salary base that improperly included this taxable educational assistance, resulting in higher deductions from paychecks.
What changed?
Under the legacy payroll system, these files were received too late for OSC to withhold any taxes. OSC reported this taxable educational assistance as income to the employees on their W-2's and processed Social Security and Medicaid adjustments in the next calendar year.
What educational assistance programs are offered by New York State?
How did OSC respond to employee and agency concerns?
On Thursday morning, December 24, 1998, a memo went to all agency payroll officers encouraging them to offer cash advances to affected employees. On Tuesday, December 29, 1998, a memo was sent to payroll officers for distribution to employees affected by this withholding. Both memos are attached.
Did employees know that this assistance was taxable and that taxes would be withheld from paychecks?
Information about these educational assistance programs stated that the benefits might be taxable and taxes could be withheld. However, neither employees nor their State agencies were notified to expect this withholding in their last paycheck of the calendar year.
PaySR Bulletin No. 58, issued November 24, 1998, stated that "payments for graduate level courses made in 1998 and 1999 are subject to wage reporting and withholding." However, the planned timing of this withholding was not announced.
What are the tax rules for employer-provided educational assistance?
Employers may provide up to $5,250 in tax-free educational assistance per year, per employee for undergraduate courses, whether or not the course is job-related.
Generally, tax-free employer-provided educational assistance for graduate-level courses is not available. The Internal Revenue Service states:
However, employers can provide job-related educational assistance for graduate-level education as a tax-free fringe benefit under certain circumstances. Educational assistance would generally qualify as job-related if it maintains or improves skills required for the employee’s current job or satisfies certain express employer-imposed conditions for continued employment. Individuals should consult a tax advisor for help in determining the tax treatment of any assistance the individual may be receiving from an employer for graduate-level education.
What problems remain to be solved?
memo:
TO: PSTP Voucher Recipients
DATE: December 24, 1999
RE: Tax with-holding for PSTP Courses
The State has withheld taxes in bi-weekly payroll checks dated December 23 and December 30, 1998 on the amounts members received during 1998 from the PSTP Voucher and Voucher Alternative Programs. This has resulted in substantially higher tax deductions and huge decreases in net pay, creating a significant financial hardship for many members. Educational assistance benefits, PSTP Vouchers and reimbursements under the Voucher Alternative Program, for graduate level coursework are taxable under the Internal Revenue Code, in most instances. However, these benefits have always been reported on the employee’s W-2 as a taxable education benefit and added to the employee’s annual gross pay. As a result, there was no impact on any one check during the calendar year and the taxes were paid at the time the employee files their tax return, if indeed they are in a tax liability situation.
PEF has been in discussions with the State since we learned of this action on Tuesday December 22, 1998. We have expressed our extreme displeasure over the manner in which this action was taken. Our discussions with the Office of the State Comptroller (OSC) have progressed relatively quickly. However, many issues regarding the withholding of taxes on the educational assistance benefits still remain unresolved and may take several weeks to get resolved.
As a result of PEF’s efforts, late in the evening on Wednesday December 23, 1998, PEF and the Office of the State Comptroller worked out a plan to lessen the impact of the withholding taxes deducted in the December 23 and December 30 payroll checks. OSC issued a memorandum this morning, December 24 (BELOW), to all agency payroll offices instructing them to provide salary advances to all employees impacted by the educational assistance withholding tax problem, commencing immediately. The advances will be issued by each agency upon request of the employee from the agencies’ petty cash or quick pay system. Although, agencies are limited to a $600 petty cash disbursement without authorization, OSC will authorize the payment under these circumstances. These advances are intended to assist employees through the holidays and lessen the impact of the withholding of taxes in one check. The advances must be repaid over the next four payroll periods.
The withholding taxes deducted from your December 23rd or December 30th payroll check will remain as withholding taxes and will be reflected on the W-2 the state will issue to you for the calendar year 1998. Any over deduction of taxes will be returned to you upon your filing of your state and federal tax returns for 1998. We recognize the burden this places on our members.
PEF will continue to work with staff from the Office of State Comptroller to resolve the issues of withholding taxes on the educational assistance over the coming weeks. We have agreed that the issues must be resolved prior to the issuance of the W-2’s to state employees.
Although, this is only a temporary solution, I
sincerely hope that it will lessen the impact of this deduction on your holiday and
overall financial plans. Thank you for your patience as we continue to work to resolve
this problem. As more substantive information on this issue becomes available, it will be
provided to PEF leaders, on the PEF Hotline (1-800-553-2445) and on the PEF web site
(www.pef.org).
Roger E. Benson
President
cc: PEF Executive Board
PEF Division Officers
PEF Staff
H. CARL McCALL STATE COMPTROLLER |
STATE OF NEW YORK OFFICE OF THE STATE COMPTROLLER | A.E. SMITH STATE OFFICE BUILDING ALBANY, NEW YORK 12236 |
To: Agency Payroll/Finance Officers
From: Joan M. Rapp, Director of State Payroll Services
Subject: Increases in Tax Withholding for Educational Assistance Payments
Date: December 24, 1998
We want to alert you to a way to assist employees with unanticipated increases in tax withholding in paychecks issued on December 23, 1998, and December 31, 1998. As a result of the conversion to the PaySR system, employees who received taxable educational benefits in 1998 have or will have additional taxes withheld from these paychecks.
We sincerely regret the timing of this withholding and the lack of advance notice to you and your employees. OSC will notify each affected employee to apologize and explain this situation.
You may assist your employees in alleviating the impact of this withholding by providing them with a Cash Advance. There are two ways to pay this Cash Advance:
Cash Advances to the employee should be fully recovered within the first four pay periods in 1999.
Again, we regret the confusion and inconvenience that this may have caused you and your employees.
memo:
TO: PEF Officers and PEF Regional Offices
FROM: Roger E. Benson
DATE: December 22, 1998
RE: Taxable Education Benefit
This morning the Education and Training Department received several telephone calls from members advising them that the State withheld taxes in bi-weekly payroll checks dated December 23, 1998 on the amounts members received during 1998 from the PSTP Voucher and Voucher Alternative Programs. This has resulted in substantially higher tax deductions and substantial decreases in their net pay, creating unnecessary financial hardship.
All education benefits, PSTP Vouchers and reimbursements under the Voucher Alternative Program, for graduate level coursework are taxable under the Internal Revenue Code. However, in prior years, these benefits have always been reported on the employee’s W-2 as a taxable education benefit and added to the employee’s annual gross pay without additional withholding. As a result, there was no impact on any one check during the calendar year and taxes were paid as necessary at the time the employee filed their tax return.
At no time did the State, either through the Office of State Comptroller or the Governor’s Office of Employee Relations, notify us of any change in the methodology of reporting or taxing these taxable education benefits prior to this unilateral change.
Since learning of this tremendous hardship, we have contacted the Governor’s Office of Employee Relations and the Office of State Comptroller to correct the problems with the December 23, 1998 administrative payroll and to attempt to prevent a repeat of this problem with the institutional payroll on December 30, 1998.
We will keep you appraised of the status of this problem as it evolves.
Roger E. Benson
President
cc: Executive Board Council Leaders