When you hire new Tier 6 employees, NYSLRS uses their annual wage to determine the Tier 6 member contribution rates that you must apply to their earnings.
One of five different member contribution rates will be applied, based on the amount of the employee’s wage.
When to Submit the Annual Wage
The law requires employers to provide the employee’s projected annual wage amount to NYSLRS at the time of enrollment. The projected annual wage amount you submit will be used to determine the employee’s member contribution rate during the first three years of their membership.
Retirement Online is the fastest and easiest way to enroll new employees. But if you must use paper, you can enroll NYSLRS members by fax. Be sure to fill in the Projected Annualized Wage box in Part 2 of the ERS Membership Registration form (RS5420) or the Police and Fire Membership Application form (PF5022). We cannot enroll new members without this information.
A delay in enrollment may result in the member owing mandatory service credit purchase payments plus interest. Employer contributions for mandatory members will be calculated based on their salaries as of their hire date.
How to Determine the Annual Wage
In order to ensure the correct contribution rates are applied to the earnings of your Tier 6 employees, it is important that you understand what types of wages should be included in their annual wage amount.
The annual wage is the projected base pay amount that a full-time employee is expected to earn for the year at the time they are hired. This should include all wage types that will be paid to an employee on a regular basis in each paycheck, including, but not limited to:
- Regular pay
- Shift differential pay
- Location pay (geographic pay)
- Increased hiring rate pay
For employees who are hired to work less than full-time, if the employee joins NYSLRS, employers will need to calculate an “annualized” version of their annual wage based on the base pay wage types described above. Annualizing a wage is the process of determining what the new member’s annual wage would be if he or she were working full-time.
Here are sample formulas to help you calculate a new member’s annual wage:
Hourly Employees
12 month employees
Hourly rate × standard workday × 260 days worked = annual wage
10 month employees
Hourly rate × standard workday × 180 days worked = annual wage
Daily Employees
12 month employees
Daily rate × 260 days worked = annual wage
10 month employees
Daily rate × 180 days worked = annual wage
Unit of Work Employees
Unit rate × number of events (an estimated number is acceptable) = annual wage
If you have any questions regarding how to determine an annual wage for a new employee, please email our Employer Reporting staff at [email protected].
(Rev. 2/20)