Purpose

To explain processing of the Prepaid Legal Service Benefit for tax purposes for the 2008 calendar year.

Background

In accordance with the Internal Revenue Code, it is required that the value of employer-funded group legal service benefits be considered as reportable income for each covered employee. Therefore, the value of this benefit will be added to the employee’s earnings and reflected on his/her W-2 Statement.

Affected Employees

Employees represented by District Council 37 in the bargaining units listed who reside within the following Zip Codes and receive a paycheck or direct deposit advice statement dated October 9, 2008:

Effective Date

Paychecks dated October 23, 2008

OSC Actions

OSC will automatically apply the Prepaid Legal Service Benefit for the 2008 calendar year. Listed below are the union, bargaining units, value of the Prepaid Legal Service Benefit and the Earnings Code:

DC 37 has determined that Nonresident Aliens are eligible to receive this benefit. OSC has created three new Earn Codes to process the benefit for Nonresident Aliens who meet the criteria above:

Note: This benefit also will be processed in paychecks dated December 4, 2008 for employees who receive a paycheck or direct deposit advice statement dated November 20, 2008, and for whom the benefit was not applied in October.

Agency Actions

Notify affected employees.

Control-D Report

Control-D report NPAY771 (Time Entry Payment Report) will list all employees for whom the Prepaid Legal Service Benefit was processed.

Payroll Register and Employee Paycheck/Advice

The applicable earnings code and the value will be displayed on the payroll register and the employee’s paycheck stub or direct deposit advice statement.

Questions

Questions regarding this Bulletin may be directed to the Payroll Deductions mailbox.