Guidelines on Retroactive County Increases
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Historically, and in accordance with our Memorandum of Understanding (MOU), counties were permitted to give increases on their portion of an employee’s salary according to the county rules. Unfortunately we have to set parameters on the time frames in which we can retroactively input a county increase due to rules around State and Federal Funding sources.
Whenever a county increase is entered it in turn changes the percentage (not dollar) of total salary that the State/Federal funding pays. Since some benefits are based on percentage of salary this causes adjustments to all funding sources, not just the county funding.
State guidelines do not allow for retroactive adjustments crossing the state fiscal year (July 1-June 30).
Federal guidelines do not allow for retroactive adjustments crossing the federal fiscal year (October 1- September 30).
As such we cannot allow county increases that cross these fiscal years. We do have a solution for you if you need to submit a county increase that would cross the fiscal year. Our suggestion is to submit a one-time payment for what the employee “should have received” for the retro amount then enter the actual increase on a current basis. This will make your employees “whole” in what they should have received. Here’s an example of how that would work:
- Assume the county issued an increase for all employees that would result in a $1000 increase for Employee A going back to May 1, 2020 but this wasn’t approved in the county until February 2021.
- Since the increase would cross both the State and Federal fiscal years, that would not be approved.
- First, figure out what the employee should have received. To do that, you take the annual increase amount and divide that by 12 to get the amount per month. In this case that’s $1000/12= $83.33 per month.
- Next, figure out how many months have passed since the increase should have been entered. In this case that’s 9 (May through January). Multiply the monthly amount calculated in the first step by the number of months. 9 x 83.33= 749.99 (or $750.00).
- Lastly, submit the request to pay a $750.00 one-time bonus then a request to enter the $1000 increase starting February 1, 2021. Now your employee will be “whole”.
- The process works the same for mid-month or partial month increases too, we just have to calculate the number of days in the month to figure out a daily figure for that first month. Using the same example, it would work like this:
- Monthly amount of the increase is $83.33
- May 2020 had 21 work days (i.e. week days). Divide the monthly amount by the number of work days 83.33/21= $3.97 per day.
- If we assume that your county increase was to be effective May 18th, you need to figure out how many work days that was. In this case that is 10 work days (paid holidays count as work days so in this example Memorial Day is included in the calculation).
- Multiply the daily rate by the number of work days, 3.97 x 10=$39.70 for May.
- Calculate the remaining months without May, that would leave 8 extra months, so 8 x 83.33= 666.64
- Add the partial May amount to the remainder of the year to calculate the full amount. 39.70 + 666.64= 706.34. That’s the amount of the one-time payment.