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Introduction
A Damage Payment is a payment made to an employee who begins work prior to signing the University of California State Oath of Allegiance, Patent Policy, and Patent Acknowledgement form in lieu of regular wages.
A Damage Payment constitutes settlement of a claim by the employee based upon services rendered prior to signing the State Oath of Allegiance Form.
Non-US citizens are not required to sign the State Oath of Allegiance, so Damage Payments are not relevant.
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Payment Criteria
The following conditions must be met before a Damage Payment can be processed:
- The employee entered into University employment in good faith, with no knowledge of the University of California State Oath of Allegiance requirement.
- The employee would have executed the State Oath of Allegiance, Patent Policy, and Patent Acknowledgement Form prior to commencing University employment had the University advised him or her of the requirement to sign it.
- The employee signed the State Oath of Allegiance Form upon learning of the requirement.
- The hire action must be completed in the UCPath online system, even if the employee will do no work beyond the date of the Damage Payment.
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Process
Obtain employee's signature on the University of California State Oath of Allegiance, Patent Policy, and Patent Acknowledgment.
Update employee hire information in the UCPath online system, including hire date, Position and Job Data and other information, to ensure the PPS payroll system data is consistent with the data provided on the Damage Payment Request form. The hire date should be the same date the Oath is signed.
Complete the Damage Payment Report and Dame Payment Release forms. The Damage Payment Report includes details regarding why the Oath was not signed prior to the commencement of service, the duration of time the employee worked prior to signing the Oath, an approved and detailed calculation of the payment due to the employee for service and an acknowledgment from the employee stating that he or she understands the terms of payment.
The divisional or departmental business office will submit all forms and supporting documentation together to Staff Human Resources or Academic Timekeepers, as appropriate.
Damage Payments that are greater than 120 days must be reviewed and approved by the Chancellor.
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Authorization and approvals
This process requires the following reviews and approvals:
An employee may not approve his or her own reimbursement or payment request.
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Resources
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Incorrect Payment Summary
Incorrect pay is discovered one of four ways:
- Payroll Audit of Confirm queries/reports
- HR or Divisional audit of time and attendance records
- Employee notification
- UCPath notification
Incorrect pay can occur from errors in:
- Percentage of time on pay status (monthly rated) or hours on pay status (hourly rated)
- Pay period end date
- Rate amount
- Employee ID
- Time and Attendance
- Lack of multi-unit coordination
- Other miscellaneous errors
For guidance in correcting errors in pay, please contact the Payroll Office staffed through payerr@ucsc.edu.
Errors in pay that are discovered prior to the confirm for the affected period should be corrected immediately. Contact payerr@ucsc.edu for pre-confirm support when errors are discovered during "closed" periods of the affected cycle.
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Overpayments
In an overpayment situation, the method of correction is determined on a case-by-case basis. To begin the overpayment process, please send an e-mail to payerr@ucsc.edu.
- Subject: Overpayment Last Name PPE
- Example Subject Line: Overpayment Smith 12345678 4/4/20
- Body/Text to include:
- EID and Name
- Pay cycle / Slices
- Earn Code
- Error in pay
- Reason for overpayment
- Example: Smith, John, 12345678 was overpaid by 12 hours for pay period ending 4/4/20: 4/1/20 - 8hrs, 4/2/20 - 4hrs. The employee reported Leave No Pay but the timesheet was marked DNE.
The Payroll Office will respond within 24 hours of receiving your email. The Payroll Office will analyze each situation on a case-by-case basis, taking into consideration the concerns and information provided by the timekeeper. The Payroll Office will ultimately decide the method of recovery, based on timing, the unique complexities of each case, etc.; Based on this analysis, the Payroll Office will provide the options for overpayment recovery in the form of the Overpayment Letter to the employee. Detailed instructions will be provided in each letter.
Overpayments that are the result of monthly arrears time-reporting should be corrected on the employee's next regularly scheduled pay cycle and do not require consultation with the Payroll Office. However, if an amended timesheet is submitted, please consult with the Payroll Office at payerr@ucsc.edu.
OverPayments Under 50%:
The Payroll Office will prepare and send a letter to the employee containing a billing notice, repayment options, amounts and tax implications and a consent indicator. Once consent has been received, the recovery will be processed through SC.TA.02 Time & Attendance Adjustments or SC.PY.01 One Time Payments. The Payroll Office will require “slices” by day from the timekeeper and will submit these entries via manual I181 or I618 files or via ammended CruzPay records. The Payroll Office will keep timekeepers updated on recovery efforts.
Overpayments 50% or Greater:
The Payroll Office will submit a case to UCPath. The UCPath Center will provide a letter containing a billing notice, repayment options, amounts and tax implications and a consent indicator to the Payroll Office which will, in turn, be disbursed to the employee. The Payroll Office is responsible for working with UCPath to process the overpayment. The Payroll Office will keep timekeepers updated on recovery efforts.
The process ends when the full amount of the overpayment has been recovered and the individual’s earnings records are adjusted accordingly. Please note that overpayments that are not recovered during the tax year in which they occurred, may be subject to modification and net-to-gross recalculation.
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Cancellation
Cancellation of paper checks and reversals of ACH deposits are not always an option. As noted above, there are many deductions that ARE NOT reversible. In addition, timing is critical -- there is a very narrow window of time to reverse ACH deposits.
If the Payroll Office has determined that cancellation is the most appropriate method to handle the overpayment, the Payroll Office will instruct the HR Representative to complete the Back-up for Overpayment form. It is important to use the forms available on our webpage; do not use earlier printed versions that may be in your files.
- This form is to be used only after consultation with the Payroll Office.
- The transactions coded for this method of recovery are not entered into OPTRS.
- Once you have been instructed to do so by the Payroll Office:
- Complete the Back-up for Overpayment form in full
- Note unit contact information
- Fax the Back-up for Overpayment form to the Payroll Office at 459-3702.
- The Payroll Office will calculate the net overpayment.
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Underpayment
An underpayment is an error in reporting normal, scheduled and approved pay.
Adjustments that are < (less than) 25% of normal pay:
- Should be paid on the employee's next regularly scheduled pay cycle.
- HR Representatives have implied approval to adjust pay via amended timesheet or manual file on the next available published pay-cycle.
Employees should be notified of any underpayment errors and advised when they will receive the payment.
Adjustments that are > (greater than) 25% of normal pay:
HR Representatives should notify the employee and inclue the payroll listserve payerr@ucsc.edu.
Please include a brief summary of the underpayment (amount, reason, pay period) and the following pay options:
We can facilitate payment to you by offering you the following scenarios:
- Request a Local check be generated for you.*
- Request an Off-cycle check be generated for you.++
- Allow pay to be added to the next payroll cycle (this could impact your tax deductions).+++
* Local checks, when ready, are required to be picked-up in person at the Scotts Valley Center. You will need to be prepared to wear PPE and follow all COVID related guidelines for accessing UC buildings. Additionally, as this is a vendor check - no payroll taxes or deductions are taken out. Payroll will determine the percent of your wages that can be paid, holding back funds to cover your individual taxes, deductions, etc. Any balance of your pay will follow on an off-cycle check.
++ Off-Cycle checks are created by requesting them from UCPC. The payment will be issued in accordance to your ongoing method either direct deposit or mailed to your address on file. We cannot guarantee what day you will receive your money via UCPath due to timing constraints.
+++ Adding pay to your next regular pay cycle means: Your pay is taxed on hours reported/paid each pay cycle, which simply means the more you make in a pay cycle, the more tax is taken out. As always, you are taxed according to your W4 allocation.
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Flush Pay
"Flush Pay" situations are discovered by the Payroll Office in the course of a post-compute audit. Flush pay occurs when there is insufficient current monthly pay and/or no retro-active or additional pay from which to recover a negative transaction. As a result, all pay transactions fail in the compute. Flush pay will result in no pay being issued to the employee. The Payroll Office will contact HR directly to develop a correction plan for each unique case.
It is the responsibility of the HR Unit(s) to research transactions and determine the cause of the "flush". If multiple units are involved in paying the employee, the correction must be coordinated between all impacted units.
Things to consider:
- Was the RX in excess of 25% of the intended pay?
- Will timing of the corrections cause a hardship to the employee?
The Payroll Office will annotate the PAN of the negative transaction (RX) that caused the problem, as well as send email notification to all responsible HR Unit personnel. The HR Unit(s) must then work with the Payroll Office to develop a correction plan that includes:
- Schedule(s) on which all transactions will be resubmitted (scheduling the negative transaction (RX) on a pay cycle in which the employee will have positive pay sufficient to recover it)
- Whether or not the employee can wait until his/her regular payroll cycle to receive any positive pay that is due to him/her.
- Status of employement: is the employee active, on LOA or terminating?
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Zero Net
"Zero net" is different from flush pay in that the pay transactions DO compute and do NOT need to be reprocessed. The Payroll Office will consult directly with the employee when a "zero net" check is discovered during the Post compute audit. A "zero net" check occurs when an employee has set up a voluntary payroll deduction(s) which is in excess of his/her net disposable income (gross pay less mandatory deductions). Depending on the attributes of the deduction, it may have taken all available net pay, and may or may not result in the remaining balance of the deduction being held in suspense until future pay is available to draw against.
Example
403(b) deduction greater than gross disposable:
- Employee normally has a gross of $3,200 and a net of $2516
- Employee sets up a 403(b) deduction through At Your Service Online for $300/month and accidentally adds an extra zero, resulting in a deduction of $3000/month.
- At compute, the 403(b) will deduct all that it can (after reducing taxable grosses) which, in this case, will be in excess of the net disposable income. This will leave the employee with a "zero net" check.
There is no adjustment to be made to the gross pay. The employee's unit paid the gross that should have been paid. The zero net occurred due to a deduction amount error.
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Permanent Interlocation Transfers
When an employee transfers without a break in service, for one (1) year or more, from one UC campus to another, the action is termed an Interlocation Transfer.
OUTGOING interlocation transfers are employees transferring from the Santa Cruz campus to another location.
INCOMING interlocation transfers are employees transferring to the Santa Cruz campus from another location.
Before Process Begins
- The employee has notified SHR or their academic division of their transfer and there is no break in service.
- During the job offer process and termination process, SHR and Academic Divisions will proactively ask if an employee is planning on transferring to another campus or is originally from another campus.
- SHR and Academic Divisions will coordinate directly with other locations regarding specific transfer information such as transfer dates, probation status considerations, etc.
Incoming Transfers
- A position exists in UCPath and recruitment activities (if applicable) have occurred.
- Incoming transfers will complete paperwork as applicable (with the exception of the I-9 and oath). Incoming transfers are not eligible for a new PIE.
- AFor employees who transfer from a PPS location to UCSC, payroll tax and leave balances including sabbatical will be indicated on UFIN301 by the originating location and will be provided when processing the hire in UCPath.
Outgoing Transfers
- For outgoing transfers, final pay will be processed on the employees’ regular pay cycle and will not be submitted through SC.PY.03 Final Pay.
- If an employee is transferring from an accruing position to a non-accruing position, the timekeeper will process any compensatory time (CTO) payout through SC.TA.01 Time & Attendance Processing or vacation payout through SC.PY.03 Final Pay.
- All overpayments are handled prior to the transfer of the employee. UCSC is responsible for negotiating a repayment schedule, this will be addressed in SC.PY.06 Overpayment Recovery.
To help ensure that elected deductions are transferred properly, please notify the Payroll office via the payerr@ucsc.edu listserv of all transfers, both to and from UCSC.
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Temporary Appointments (MLA) and One Time Payments
Multilocation Appointments (MLA): An interlocation transfer is considered temporary when an employee at one location, designated the HOME location, accepts a position at another location, the HOST location, for a period of twelve months or less, with the intention of returning to work for the HOME location at the end of this period.
One Time Payment (OTP): A one-time intercampus payment is required when an employee at one location (home location) is eligible to receive a payment originating from another location (host location) for an event or service of a short duration. A one-time payment is paid from the Home location.
Job details for both the MLA and OTP must be approved by both HOME and HOST locations before payment can be submitted.
UCSC is HOME: a UCSC employee accepts a temporary assignment at another UC location
UCSC is HOST: an employee from another location accepts a temporary assignment at UCSC
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One-Time Payment
An interlocation one-time payment is required when an employee at one location (Home location) is eligible to receive a payment originating from another location (Host location) for an event or sevice of a short duration. A one-time payment is paid from the Home location.
UCSC is HOME: another location pays a UCSC employee for an even or service of short duration.
- The Interlocation One-Time Payment Form (UPAY 644C-T) originates at the other location (Host location)
- If UCSC Payroll receives the UPAY 644C-T from the other location it will be routed to the appropriate HR Office or Division for review and approval
- HR Office or Division approves and routes back to Payroll
- Payroll will manage the Host payment in PPS
- Payroll will generate the appropriate financial transactions to "bill" the Host location as indicated on the UPAY 644C-T
UCSC is HOST: UCSC pays an employee of another location for an event or service of short duration
- Hiring department contacts Home location to obtain employee dat for Home location portion of the Interlocation One-Time Payment Form (UPAY 644C-T)
- Hiring department completes Host location information
- Route to UCSC Payroll
- Payroll will coordinate payment with the Home location's Payroll Office will respond to all related financial transactions as detailed on the UPAY 644C-T
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Campus business policy references
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Before you start
The hiring and re-hiring of Foreign Nationals is first processed through the GLACIER System to generate appropriate forms. Refer to the Payroll Coordinator Guide: Foreign Nationals for further details.
After all GLACIER documentation has been completed, the HR representatives will perform the following:
- Complete the hiring action in PPS (See PPS Manual for further details on PPS entry)
- Complete a Foreign National Hiring Form and staple it on top of the completed non-resident alien payroll forms.
Note: This process is critical so that documents are identifiable for audit purposes by the Payroll Office, and not merely directed to the file area.
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Necessary forms to submit
Whenever a Foreign National is hired or re-hired into your department, submit these forms to Payroll:
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GLACIER features
GLACIER is a secure, web-based Non Resident Alien tax compliance system that collects tax related information from Foreign Nationals receiving funds from the University of California at Santa Cruz.
GLACIER determines:
- Tax residency
- Withholding rates
- Income tax treaty eligibility
- Stores and manages data
- Generates management reports
- Prepares tax forms and required statements
Note: All Foreign Nationals receiving funds from the University must have a GLACIER record whether they are paid through Payroll or Accounts Payable.
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GLACIER benefits
GLACIER provides the following benefits:
- Provides foreign individuals with up-to-date information and support to assist them with complex tax matters
- Reduces tax compliance burden on foreign individuals and University departments
- Improves compliance with immigration and tax laws
- Minimizes tax exposure in the event of an audit
Central Payroll Office will continue to review documents, enter appropriate tax codes to PPS, and perform all year-end tax reporting functions
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Payments that require a GLACIER tax record
GLACIER tax records are required for Foreign National Visitors in the following categories:
- Visa types - A, B1, B2, E, F, H, J, K, L, O, P, TN, V, WB and WT
- Pending U.S. Permanent Resident
- Pending Refugee or Asylum status
- Employment authorization card (EAD)
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GLACIER Process Roles
There are three levels of access on GLACIER.
- Admin 1 is the System Administrator (Payroll)
- Admin 2 is the second highest level of access to GLACIER; an Admin 2 has access to:
- Add New Individual Record
- Review / Update Individual / Entity Records
- Create / View / Print Reports
- Review passwords and send email reminders to Users
- View GLACIER Administration
- Use the Tax Calculator
- Responsible for adding and monitoring the test individuals for the trainee purpose in the GLACIER
- Responsibility of Admin 2 to alert the Payroll Office Admin 1 of any changes in their payroll coordination for Admin 3 access
- Responsible for Reviewing Glacier Reports monthly and contacting Foreign National Individual to update information in GLACIER
- Resend Individual Access Information
- Admin 3 is the third highest level of access to GLACIER; an Admin 3 has access to:
- Add Individual Passwords
- Review Individual / Entity Records
- Add certain Individual Records (only those they created)
- View GLACIER Administration
- Use the Tax Calculator
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GLACIER Check List of Tasks to Complete
- Appointment Letter including notification of future GLACIER email.
- Contact between HR unit and employee.
- On Boarding: Employee brings GLACIER generated documentation.
- Extension of Employment: When extending employment for foreign national individual please review updated information here (4.12-2 PPS Manual).
- HR unit provides employee with required information (Initial Information Form or equivalent)
- HR unit enters records into PPS.
- HR unit forwards OEU paperwork & GLACIER documents to Payroll Office with the Foreign National Hiring Form stapled to the front.
- HR unit follows up with employee regarding any outstanding issues.
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GLACIER training
GLACIER Unit Administrators are required to complete the following trainings:
After all trainings have been viewed, complete the required forms and fax to the Payroll Office.
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Postdoctoral: Hire Coding
Title Codes
The title of a Postdoctoral Scholar appointment is determined by the requirements of the funding agencies.
- Title Code 3252: Paid through the payroll system; they are paid using DOS code REG.
- Title Code 3253: Paid through the payroll system when awarded a fellowship or traineeship.
- Title Code 3254: Paid directly from extramural agency.
Applicable DOS Codes
| FEN |
Fellowships or scholarships paid through the payroll system to a Post Doctoral Fellow or paid directly to citizen or resident alien. |
| FEL |
Fellowships or scholarships paid through the payroll system to a Postdoctoral Fellow or paid directly to Foreign Nationals. |
| PDW |
Used for Postdoctoral Fellows appointed without salary regardless of citizenship code (similar to WOS) |
| PDD |
Postdoctoral Fellows that receive a differential, bringing compensation up to the minimum established by the University.
If a Fellow is receiving income from an outside agency that is less than the minimum established by the University, the University should provide differential pay to the Fellow. |
Retirement/FICA Coding
Postdoctoral Employees (TC 3252):
- Citizens and Resident Aliens will contribute to DCP, Medicare the Safe Harbor H/M.
- Those who meet the criteria for participation in the coordinated retirement plan will be derived as U/E.
Postdoctoral Fellow (TC 3253):
- Not eligible for DCP Casual but will derive H/M to allow any non-postdoctoral payments to be eligible for DCP Casual as well as Medicare deductions.
- Payment of postdoctoral stipends to Fellows must be using a new DOS code (FEN or FEL) in order to avoid DCP and Medicare deductions.
Postdoctoral Paid directly (TC 3254):
- Not eligible for DCP Casual, N/N
Note: All three title codes are ineligible for UCRP with exception made for "grandfathered" postdoctorals that remain in the Post Graduate Researcher title code - 3240.
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Policy reference
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Summary
Summary
The Employee-Initiated Reduction in Time (ERIT) Program is a tool that department heads, with the approval of their Principal Officer, may offer to their employees to achieve temporary salary savings. As of July 1, 2017, the ERIT program was extended indefinitely and allows employees a maximum participation of 36 months effective with the last renewal on July 1, 2017.
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Eligibility
Eligibility
All career staff employees (regular status and probationary, except Senior Management Group members), with appointments of at least 55 percent time, are eligible to participate in the ERIT Program.
The following represented employee groups are eligible for participation:
- Clerical and Allied Services (CX)
- UAPD (DX)
- Patient Care Technical (EX)
- Skilled Craft (K7)
- Nurses (NX)
- Service Employees (SX)
- Technical Employees (TX)
- Research Support Professionals (RX)
- Residual Health Care Professionals (HX)
For all other exclusively represented employees, participation in the ERIT Program is subject to collective bargaining.
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Process Overview
Process Overview
Department Heads, with the approval of their Principal Officers, may approve an employee’s participation in the ERIT Program. Employee participation is subject to departmental and supervisor approval
Monthly Paid Employees
For monthly paid employees requesting participation in the ERIT Program, a completed and approved ERIT Program contract form must be received by the ERIT Administration group no later than the last working day of the month prior to the effective date. The ERIT Coordinator will review applications and update in UCPath.
An ERIT Program contract for monthly paid employees must begin on the first day of a month and end on the last day of a month. No requests that require retroactive payroll processing can be considered. If contract forms are received after these published processing deadlines, the ERIT Program effective date will be modified to the following pay period. Departments should develop internal processes to ensure sufficient time for review and approvals.
Biweekly Paid Employees
For biweekly paid employees requesting participation in the ERIT Program, a completed and approved ERIT Program contract form must be received by the ERIT Administration group at least five (5) working days in advance of the effective date. The ERIT Coordinator will review applications and update in UCPath.
Time reductions are to be made in two (2) biweekly increments therefore an ERIT Program contract for biweekly paid employees must begin on the first day of the biweekly pay period and end on the last day of the second biweekly pay period of the quadriweekly pay cycle. Reference the UCSC Biweekly Payroll Calendar.
No requests that require retroactive payroll processing can be considered. If contract forms are received after these published processing deadlines, the ERIT Program effective date will be modified to the following biweekly pay period or quadriweekly pay cycle. Departments should develop internal processes to ensure sufficient time for review and approvals.
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Additional Resources
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Before you start
The information in this guide provides payroll policy and procedures to follow when an employee is separating from University employment.
- A separation action occurs when an employee separates from University employment.
- The separation process is determined by the type of employee who is separating.
- When an employee is discharged or resigns, the separating employee is paid for time worked and accrued vacation.
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Policy and Background
There are two types of separation: voluntary and involuntary.
A voluntary separation from employment is:
- retirement
- the end of a limited-contract appointment, in which the end date of employment is established during the initial hire action.
- employee elected separation, with notice.
An involuntary separation from employment can be, but is not limited to, the following:
- Employee resigns/quits without notice (less than 72 hours)
- Employee is discharged
When an unrepresented employee voluntarily separates from employment, the employee's final pay will be processed in the employee's next available regularly scheduled payroll cycle.
Represented employees that voluntarily separate from employment will be reviewed on a case-by-case basis and will be paid in accordance with mandates set forth in each union contract, giving due consideration to payroll deadlines and policy.
Involuntary separations will be addressed as set forth in the California Labor Code Assembly Bill 2410: final pay for separating employees is due and payable immediately and is subject to the 72-hour rule when separation is involuntary.
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Procedure for Compliance
The key to success when an employee is separating is timely communication between the Unit Supervisors and the HR Teams. The HR Teams are responsible for the thorough review of Time and Attendance Records.
HR Service Teams contact the Payroll Office for processing a Separation Payment AB2410 (PDF | Excel) request when the separation from employment is involuntary. The Payroll Office will determine and implement the appropriate course of action. The Payroll Office will advise HR of payment disbursement (elected direct deposit, mailstop or vendor check pick-up).
- Please make sure all hours submitted on the Separation Payment AB2410 (PDF | Excel) are reviewed for accuracy.
- A final paycheck may be issued through the AP Vendor check-write or through a regularly scheduled payroll compute.
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Completing the AB2410 Form
- The Separation Payment AB2410 (PDF | Excel) details the hours or percentage of current time to be paid.
- The Separation Supplement Payment AB2410 (PDF | Excel) details hours or percentage adjustments or payments for late time.
- Time to be paid includes:
Note: Only hours to be PAID are reported. Do not include leave balance adjustments on final pay document. VAC, VLA, SKL and SLA must be reported on the UPAY644E, Time Reporting Worksheet or Roster.
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Processing the Payment
HR Service Teams must email the Payroll Office at AB2410@ucsc.edu to notify Payroll of the Separation Payment AB2410 (PDF | Excel) request. The Payroll Office will respond within two business hours* that the notification has been received and will consult with the unit at that time as to the proper method of payment and to determine how the forms will be sent to the Payroll Office (fax 9-3702, email attachment or hand-delivered).
* Payroll Office hours are M-F 9am-noon
After receiving instruction from the Payroll Office, the unit prepares the Separation Payment AB2410 (PDF | Excel). The form is then delivered to the Payroll Office as previously discussed. The Payroll Office must analyze the request and take prompt action to prevent issuing incorrect payments through a regularly scheduled payroll compute. Late requests put the University at risk for fines and penalties. The HR Service Teams must contact the Payroll Office when the request will be late, in order to make special arrangements.
- The Payroll Office will manually calculate the final payment, including mandatory deductions and contributions.
- Transactions will be prepared to charge the departmental expenditure account and to update the employee's earnings records with the final payment information.
- The Payroll Office will determine the appropriate method to generate the payment (AP Vendor check-write, exception to the AP Vendor check-write or through a regularly scheduled payroll compute).
- The Payroll Office will notify the HR Service Team when a check is generated and is, either ready for pick-up or ready for Campus Mail delivery.
The Payroll Office adheres to the AP Vendor check-write process.
- The deadline for processing the Separation Payment AB2410 (PDF | Excel) is 10:00am the day before the AP Vendor check-write.
- Missing a deadline may require processing an exception to the AP Vendor check-write process. The majority of separations are planned events. It is the responsibility of supervisors to communicate to HR Personnel, and the HR Personnel to communicate to the Payroll Office in a timely manner, to allow ample opportunity to generate the final check in the most efficient manner so that the check may be presented to the employee on his/her final day.
The HR Team completes the final wage payment process.
- If Payroll determines and schedules final pay to be generated through the AP Vendor check-write process, the HR Service Team member will pick-up the employee's final check from the Payroll Office and distribute it to the employee at the place of discharge or where the employee works.
- If Payroll determines that final pay will be generated through the regularly scheduled payroll compute, the payment will be issued according to the payroll production schedule. The final paycheck will be distributed according to the pay disposition code.
- The separation action must be promptly entered into PPS per payroll deadlines: ending the appointment(s) and distribution(s), entering the separation date, separation reason and last day on pay status. If the EDB is open, process the separation action prior to sending AB2410 documentation to the Payroll Office. If the EDB is closed, process the separation on the first available "open" day. Issuing final pay to Active status employees is considered unauthorized pay and puts the University at risk.
- The employee is provided with the Separating Employee Packet, including information on DCP Accumulation withdrawals.
- Time reported on the AB2410 form that has also been reported on the roster or via CruzPay feed must be zeroed-out. Please annotate the AB2410 form noting whether HR will zero-out the transaction/s or to request that Payroll zero-out.
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Categories of Separating Employees
The final pay policy to pay final wages/hours on the employee's regular payroll cycle applies to unrepresented employees who voluntarily separate from University employment and includes:
- Employees who quit career positions to accept per diem positions.
- Employees who resign prior to their appointment end date (early resignations).
- Employees who are retiring.
- Employees whose contract has expired.
The final pay policy to pay via Off-Cycle Pay processing applies to represented employees with contracts that define the terms of separation pay and employees who involuntarily* separate from University employment, including:
- Dismissals
- Layoffs
- Employees who are receiving settlement or severance payments (*can be voluntary or involuntary).
The final pay policy does not apply to employees who are transferring to other UC campus locations without a break in service. Please refer to the Interlocation Transfer Guide for more information about employees who are transferring to other UC locations.
The final pay policy does not apply to expiring Academic or Student appointments, including appointees who leave campus prior to their appointment end date.
The final pay policy does not apply to payments made upon death of a University employee. Refer to the Accounting Manual P-196-25 Payroll: Employee Death Payments for more information about the policy and procedures relating to payments made upon the death of a University employee.
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Employees Separating from UC with Repayment Terms
Some employees are awarded incentives such as Faculty Recruitment Allowances, Moving Expenses and Recruitment bonuses. Many of these incentives include a repayment agreement stipulating repayment of some, or all, of the incentive if the terms of the agreement are not met.
When an employee is awarded an incentive payment, please notify the Payroll Office at payerr@ucsc.edu. The email notification should include:
- Employee Name
- UCPath ID
- Award type and amount
- Date of payment
- The signed repayment agreement (if applicable)
Similarly, when an employee is separating, please notify the Payroll Office at finalpay@ucsc.edu. The email notification should include:
- Employee Name
- UCPath ID
- Empl Record
- Date of Separation from UC
- Separation Reason
- Pay Due (yes or no)
- Terminal Vacation (yes or no)
This notification will trigger a Payroll review of repayable amounts that may be owed back to UCSC, including any outstanding overpayments. The Payroll Office will respond within 4 hours to provide instructions on any outstanding balances owed. This reply will include the amount due, employee communications/agreements needed and instructions for collecting balances due from final pay, when appropriate. The Payroll Office will work directly with the employee to obtain authorization to recover balances due from final pay and advise HR on the recovery method and amount. Please do not process final pay to the employee prior to receiving a response from the Payroll Office.
Employees who do not agree to have balances due collected from final pay and/or those who do not have sufficient final pay to collect the entire balance due, will be required to submit payment to the UC Regents within 30 days of separation from UC.
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Consequences for Non-Compliance
The University is at risk if the employee records (EDB) is not updated to reflect separation prior to the release of final payment checks. The University and the Payroll Office personnel are at risk for fines and penalties when the Payroll Office is not given sufficient time to respond to requests for final payment.
- The HR Service Team communicates with employees about grievances and directs the employee to contact the Labor Board. The HR Service team notifies the Payroll Office by email about separation payment grievances.
- Daily penalties may be assessed and include weekends and holidays for up to a maximum of 30 days wages.
- Penalty payments are considered tax reportable income and are not subject to typical employment taxes (Federal and/or State withholding, etc).
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Special Situations
There are instances when current month pay should be adjusted. Contact the Payroll Office for guidance.
- The Payroll Office consults with the Compensation Office for all retroactive wage implementations to ensure compliance with the mandates set forth in the California Labor Code and CA Assembly Bill 2410.
- Contact the Payroll Office when an employee is discharged or quits during a time when retroactive wages are to be paid.
- The University is obligated to comply with provisions of CA Assembly Bill 2410 when a separating employee does not provide their timesheet or does not respond to requests for information needed to process final payment.
- Payment is for all wages known at the time of separation. The HR Service Team should use conservative estimates when final hours cannot be verified. Every effort must be made to pay an employee who quits without notice all unpaid wages within the 72-hours period. Any additional earnings are processed as additional pay adjustments through a regularly scheduled payroll compute.
- When an employee is dismissed at the end of an investigatory leave, the HR Service Team consults with the Labor Relations Office to determine the most appropriate method to disperse final payment to the employee.
- It is the responsibility of the HR Service Team to receive a request in writing when an employee requests that final payment be mailed to him/her.
The California Labor Code includes a provision for separation payment requirements for the month of December. Consult with the Payroll Office regarding final pay processing for separations that occur on or near the campus closure dates.
If an employee is losing employment and the payment date falls on a date when the employer is closed (Saturday, Sunday or a holiday), the final payment is to be dispersed on the next business day.
Employees separating during the campus closure will be paid all pay due on the December monthly payroll cycle, issued the first business day of the new year. Be sure to submit the AB2410 Form to the Payroll Office as soon as the separation is known during the month of December to insure that payment can be processed before campus closure.
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Resources
The policies that apply to this campus business procedure include:
The method for processing separation actions is determined according to individual employee reason, circumstance, and timing.
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Termination Benefits
In general, termination benefits may be provided to an employee as a result of voluntary or involuntary early termination of services. Termination benefits are those that are over and above standard benefits (i.e., vacation pay, health care coverage, etc.) provided upon termination that are not provided by UCRP or the annuitant health plan. The following are examples of termination benefits:
- Health care coverage continuation
- Expanded health care coverage
- Expanded health care coverage not provided by UCRP annuitants
- COBRA benefits paid by UCSC
- Severance pay
- Cash pay outs at, or following, termination, including annuity payments
- Career counseling or job placement
- Other payments such as moving expenses, attorneys' fees, damages and interest on back pay.
Some of the benefits listed above exceed those provided under University policy and need to be approved as an exception or included in a settlement agreement approved by the Office of General Counsel.
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Voluntary Termination Benefits
Voluntary Termination Benefits represent payments made to employees as:
- an inducement to hasten the termination of services or
- as a result of a voluntary early termination plan.
The University's obligation to provide benefits for voluntary terminations or separations typically arises as a result of a bilateral agreement in which the University agrees to provide benefits in exchange for which the employee agrees to leave service earlier than he or she otherwise would.
The following DOS codes for Voluntary Termination Benefits paid through PPS must be used instead of the base code SEV:
| DOS Code |
Description |
Usage |
|---|
| VTL |
Voluntary Termination Lump Sum |
By-Agreement Settlement Payments, job placements, etc |
| VTS |
Voluntary Termination Severance |
By-Agreement Severance |
| VTR |
Voluntary Termination Regular Pay |
Regular Pay in monthly increments |
See DOS Section for further Details
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Involuntary Termination Benefits
Involuntary Termination Benefits represents payments made to employees as a consequence of the involuntary termination of services. In contrast to voluntary terminations or separations, involuntary terminations result from a unilateral decision by the University, such as layoff. The conditions for involuntary terminations are outlined in personnel policy, which provides the basis for conveying these types of benefits to employees.
For Involuntary Termination Benefits all of the following criteria must be met:
- A plan of termination has been approved by those with the authority to commit the University to the plan
- The plan has been communicated to the employee
- Benefits can be estimated
For Involuntary Termination Benefits paid through PPS, the following DOS codes must be used instead of SEV:
| DOS Code |
Description |
Usage |
|---|
| ITL |
Involuntary Termination Lump Sum |
By-Agreement Settlement Payments, job placements, etc. |
| ITS |
Involuntary Termination Severance |
By-Agreement Severance |
| ITR |
Involuntary Termination Regular Pay |
Regular pay in monthly increments |
| ITP |
Involuntary Termination Pay-in-Lieu |
Regular pay in monthly increments in-lieu of notice |
See DOS section for further details
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Description of Service (DOS) Code
The following DOS codes are used for payment input (Paytran) only. The codes cannot be used as a distribution line in a PPS employee EDB record setup.
By Agreement DOS Codes
| DOS Code |
Description |
Usage |
|---|
| VTL |
Voluntary Termination Lump Sum |
Settlement Payment |
| VTS |
Voluntary Termination Severance |
By-Agreement Payment |
| ITL |
Involuntary Termination Lump Sum |
By-Agreement Settlement Payment |
| ITS |
Involuntary Termination Severance |
By-Agreement Payment |
Rated DOS Codes
| DOS Code |
Description |
Usage |
|---|
| VTR |
Voluntary Termination Regular Pay |
Pay in monthly increments |
| ITR |
Involuntary Termination Regular Pay |
Pay in monthly increments |
| ITP |
Involuntary Termination Pay-in-Lieu |
- Regular Pay in Lieu of notice
- Employee does not have the option of Preferential Rehire rights
or receiving Severance Pay.
- Involuntary lay-off
- At the HR Control Unit's discretion
|
Additionally, the base DOS Code BYA can no longer be used to make either Voluntary or Involuntary Termination Benefits payments.
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Payments Outside of PPS
For non-salary termination payments made throughout the year outside of the PPS system (ie, through the FAST office), the following object codes should be used to record the payments:
- Termination Benefits -- Voluntary: Object Code 8770
- Termination Benefits -- Involuntary: Object Code 8875
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ITP: Pay in Lieu
Pay-in-lieu of notice is considered to be wages. A claimant is not eligible to receive unemployment compensation for the particular period following termination of employment for which payment was intended. A pay-in-lieu of notice (ITP) payment is subject to the same conditions as regular pay. Benefits will be based on the pay period end date representing when the employee actually left. Likewise, vacation and sick leave accrue based on the pay period end date.
When to use ITP
- Employee does not have the option of Preferential Rehire rights or Severance pay. Layoff is involuntary.
- A Payment in-lieu of notice is used at the HR Service Team's discretion. It is not a mandated type of payment.
How to use ITP
- Separation date must be a projected date based on the agreement made with the HR Control Unit.
- Appointment/Distribution end dates and last day on pay status must be the last day the employee actually works.
- An AB2410 must be generated and distributed to the employee for the total owed (including projected wages) on employee's last working day.
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Example
HR Control Unit offers a one month Pay-in-lieu of notice with the employee's last working day being July 15. The employee's record in PPS is updated as follows:
- Separation date: August 15
- Last day on pay status date: July 15
- Appointment end date: July 15
In this example, benefit coverage extends through September 30. The Separation Payment_AB2410: (Excel | PDF) is completed in the following way:
- Line 1: Employee is paid as REG (regular time) for the percentage of actual time worked
- Line 2: Remaining July hours are paid as projected ITP Pay-in-lieu for the percentage of work time left in July
- Line 3: August projected ITP Pay-in-lieu is paid at the percentage of the month through August 15
- Line 3: Terminal vacation paid must have an August 31 pay period end date. Vacation and sick leave are calculated based on the August 31 pay period end date.
The AB2410 check for all pay due is given to the employee on July 15.
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Required Backup
For all payments involving termination benefits, we require backup sufficient to properly classify the payment, calculate net pay and apply appropriate benefits, deductions, etc. as agreed upon between both parties.
In addition:
For voluntary termination DOS codes (VTL, VTS, VTR) we are required to substantiate:
- The employee accepts the offer, and
- The amount of the liability can be estimated
For payments made on voluntary DOS codes, separating unit must send Payroll the agreements as backup for all payments over 10K
For involuntary termination DOS codes (ITL, ITS, ITR, ITP) we are required to substantiate:
- A plan of termination has been approved by those with the authority to commit the University to the plan, and
- That plan has been communicated to the employee, and
- The amounts can be estimated.
For payments made on involuntary DOS codes, separating unit must send Payroll the agreements as backup for all payments regardless of dollar amount.
Send backup for all payments to the Payroll Accountant handling your case. The backup must be sent at the time that the payment was recorded (entered into OPTRS, AB2410 paperwork is prepared, faxed and added to timesheet).
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Resources
These policies apply to campus business processes:
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Pay Cycle Conversion
Effective Date: When an employee transitions from one pay cycle to the other, the effective date of the new pay cycle needs to align with the start of the quadriweekly benefits billing cycle.
- Example: “Benefits Holiday” Twice a year, the “Benefits Holiday” provides a range of dates in which a biweekly employee can be transitioned to the monthly pay cycle.
- A biweekly employee transitioning in the month of April 2020 can start in the monthly pay cycle effective 4/5/20 or 4/19/20.
- A monthly employee transitioning to biweekly in the month of April should have a start date of 4/19/20.
- Example: An employee transitioning in the month of May 2020 should start in the new pay cycle effective 5/17/20. This ensures that benefits collection for both pay cycles is complete for the month of May and the employee will start out a new month of benefit billing in their new pay cycle.
- Example: An employee transitioning in the month of June 2020 should start in the new pay cycle effective of 6/14/20.
System Update: To prevent missed pay resulting from “Top of Stack” issues in the UCPath system, updates to Job Data should be made after time has been confirmed in UCPath for the employee’s final pay in the “old” pay cycle. Please notify payerr@ucsc.edu of this action so that edits can be made to assign the correct new pay cycle to the employee’s local/general deductions.
- Example: April 2020:
- Monthly start date of 4/5/20: update Job 4/9/20-4/17/20 3pm. The employee’s first monthly payday will be 5/1/20 – no benefits should be collected.
- Monthly start date of 4/19/20: update Job 4/23/20 4/27/20-5/1/20 3pm. The employees first monthly pay day will be 6/1/20 – loaded retro should generate for 4/19/20-4/30/20.
- Biweekly start date of 4/19/20: update Job 4/27/20-5/1/20 3pm. The employee’s first biweekly payday will be 5/27/20.
Please contact the Payroll Office at payerr@ucsc.edu if you need assistance in determining a transition date or action plan for your pay cycle conversion case.
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Pay Cycle Conversion Samples
Scenario One: EDB Update - On Time
This scenario assumes the realtime date of 10/28/18.
Jim Jackson received reclassification which changes his primary pay cycle from BW to MO. The reclassification action is effective 11/01/2018.
Consult the Payroll Deadline Schedules:
- The Biweekly L2K compute on 10/25/18 completed the quadri-weekly benefits billing cycle for the month of November premiums
- OEU should be updated before the close of the L1L compute on 11/05/18
- Contact the Payroll Office for alternative pay processing instructions for 10/21/18-10/31/18
Scenario Two: EDB Update - Retro
This scenario assumes the realtime date of 11/13/18.
Sammy Slug received reclassification which changes his primary pay cycle from BW to MO. The reclassification action is effective 10/01/2018.
Consult the Payroll Deadline Schedules:
- The Biweekly L1L compute on 11/08/18 started the quadri-weekly benefits billing cycle for the month of December premiums. OEU must be delayed until after the L2L collects the second half of December premiums on 11/20/18
- OEU should be updated before the close of the L1M compute on 12/03/18
- Contact the Payroll Office for alternative pay processing instructions for 11/18/18-11/30/18
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Damage Payments FAQs
Q) Do the daily penalties include weekends and holidays?
- A) Yes. The daily penalties include weekends and holidays for up to a maximum of 30 days pay.
Q) Are penalty payments considered taxable wages? Are they considered covered compensation for UCRP?
- A) Penalty payments are considered tax reportable income but are not subject to normal employment taxes (Federal & State withholding, Social Security, etc.). Therefore, penalty payments must be processed through Accounts Payable and tax reported on Form 1099. Penalty payments must not be processed through Payroll.
Q) If a department incurs penalties, can the penalty payment be charged to contract and grant funds or State funds?
- A) No. Penalty payments can not be charged to contract or grant funds or to State General Funds.
Q) Are penalty payments considered covered compensation for UCRP?
- A) Penalty payments must be processed through Accounts Payable and are tax reported on Form 1099.
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Incorrect Payments FAQs
Q) When will the department expenditures account be credited?
- A) The campus does not have authority to write off or forgive salary overpayment until all efforts to collect the debt have been exhausted.
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Separation from employment FAQs
Q) If an employee has two appointments and only one appointment ends, does the procedure apply to the terminating employment?
- A) No, when an employee holds two appointments at the same location and only one appointment ends, then the employee has not separated from the University.
Q) Can a department extend an employee's appointment in order to obtain additional time to submit final hours worked?
- A) No, a department should not change an appointment end date as a method of obtaining additional time to pay the employee.
Q) Does California Assembly Bill 2410 apply to distributions of retirement funds?
- A) No, California Assembly Bill 2410 only applies to wages, not to retirement funds.
Q) Are employees working out-of-state- covered by this policy?
- A) Yes, the policy applies to all University employees working out-of-state, including employees of the Los Alamos National Laboratory.
Q) How does the law related to retroactive wages resulting from a collective bargaining agreement?
- A) Determination is made on a case by case basis. Contact the Payroll Office when an employee is discharged or quits during a time when retroactive wages are to be paid.
Q) Are employees that work out-of-state covered by California Assembly Bill 2410?
- A) Yes, all University employees working out-of-state, including employees of the Los Alamos National Laboratory, are subject to the provisions of the Bill.
Q) Does the AB2410 procedure apply to employees who terminate with the intention of being rehired within a few days? For example, career employees who are accepting per diem appointments are required to have at least a one-day break in service before being rehired.
- A) Yes, if the termination is involuntary or otherwised covered in Termination Benefits. Employees who voluntarily quit their career positions to accept per diem positions are paid via the Payroll compute.
Q) Does the AB2410 procedure apply to employees who have appointment end dates but who resign earlier?
- A) Employees who resign before achieving their appointment end dates are paid via the Payroll compute. The definition of a voluntary quit includes early resignations.
Q) Does California Assembly Bill 2410 apply to Inter-location Transfers?
- A) No, employees who transfer from one campus to another without a break in service are not considered separating from University Service.
Q) If an employee has two appointments and only one appointment ends, does the law apply to the terminating appointment?
- A) No, an employee is only considered to be separating from employment when he/she has no active appointments.
Q) If an employee retires from the University, does that represent a voluntary separation?
- A) Yes, retirements are voluntary separations and all wages due are paid via the Payroll compute.
Q) When a separating employee does not provide his or her timesheet or does not respond to requests for information needed to produce and deliver his/her final paycheck, is the University still obligated to comply with the payment provisions contained in the law?
- A) Yes, departments must make every effort to pay an employee all unpaid wages. When the wages owed are in dispute or unknown, departments should pay all wages that are known to be due the employee. If the dispute can be resolved or when the hours can be determined, the department should pay the amount settled upon. If the dispute can not be resolved or the employee does not provide the necessary documentation, the department will have a reasonable defense if the employee seeks remedies over the disputed amount through the Labor Commissioner.
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Wages FAQs
Q) Does the law apply to terminal vacation pay?
- A) Yes, the code applies to ALL wages for labor performed.
Q) Does the law apply to distributions of retirement funds?
- A) No, the Code applies only to wages, not retirement funds.
Q) Does the law apply to Senior Manager severance pay and other severance payments?
- A) Yes, Senior Management and other forms of severance pay are considered wages and must be included in the employee's final payment.
Q) Is the University obligated to process mandatory and voluntary deductions since the employee will not be paid on his /her primary pay cycle?
- A) Yes, the employee is entitled to his/her normal deductions. Consequently, the Payroll Office will manually withhold mandatory and voluntary deductions.
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Where to get help
Contact the following offices for questions related to:
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