Purpose
The purpose of this bulletin is to inform agencies of the processing of the 2019 Prepaid Legal Service Benefit.
Affected Employees
Employees, as identified below, who are represented by District Council 37, Teamsters Local 237, and SEIU Local 300 are affected.
Employees represented by District Council 37 in Bargaining Units CC, CD, SF, SJ, T9, TG, TH, TJ, TK, TL, TM, TO, TP, TR, TU, TX, U3, or U6 who reside within the following zip codes:
| New York City | Zip Codes |
| Brooklyn | 112XX |
| Bronx | 104XX |
| Queens | 110XX, 111XX, 113XX, 114XX |
| Manhattan | 100XX, 101XX, 102XX |
| Staten Island | 103XX |
| New York State | Zip Codes |
| Nassau County | 110XX, 115XX, 116XX, 117XX, 118XX |
| Suffolk County | 06390 & 117XX (except 11719, 11764, 11778, 11786, 11789, 11792) |
| Westchester County | 105XX, 106XX, 107XX, 108XX |
| Rockland County | 10901, 10911, 10913, 10920, 10923, 10927, 10931, 10952, 10954, 10956, 10960, 10962, 10964, 10965, 10968, 10970, 10974, 10976, 10977, 10980, 10982, 10983, 10984, 10986, 10989, 10993, 10994 |
Employees represented by Teamsters Local 237 in Bargaining Units SB, SC, SE, SL, SM, SP, ST, SU, SV, SW, SX, SZ, TS, or TT
Employees represented by SEIU Local 300 in Bargaining Unit S6
Note: The Zip Code criteria is only applicable to members of District Council 37.
Background
Pursuant to Internal Revenue Code Section 61, certain fringe benefits including employer-funded group legal service benefits are considered taxable income. Therefore, the value of this benefit will be added to the employee’s taxable gross wages, for tax withholding purposes, and reflected on the 2019 Form W-2 (Wage and Tax Statement).
Effective Date(s)
Effective as of paychecks dated November 7, 2019 (Institution)
OSC Actions
OSC will automatically apply the Prepaid Legal Service Benefit for the 2019 calendar year for employees who were in a status of Active or Paid Leave and received salary from a position in one of the designated bargaining units at any time during calendar year 2019.
Listed below are the unions, bargaining units, values of the Prepaid Legal Service Benefit and the Earnings Codes:
| Union | Bargaining Units | Value | Earnings Code | ||
| District Council 37 | CC, CD, SF, SJ, T9, TG, TH, TJ, TK, TL, TM, TO, TP, TR, TU, TX, U3, U6 | $107.00 | PL3 | ||
| Teamsters Local 237 | SB, SC, SE, SL, SM, SP, ST, SU, SV, SW, SX, SZ, TS, TT | $104.00 | PL1 | ||
| SEIU Local 300 | S6 | $85.00 | PL2 |
District Council 37 has determined that nonresident aliens are eligible to receive this benefit. The Earnings Codes used to process the benefit for nonresident aliens who meet the criteria stated above are as follows:
| Earn Code | NRA Income Code |
| XPL | IC 18 |
| YPL | IC 19 |
| ZPL | IC 20 |
Inactive employees who incur a current year Social Security and/or Medicare tax deficiency as a result of the application of the prepaid legal benefit, will have their Form W-2 (Wage and Tax Statement) wages (Federal, State, and Local, if applicable) grossed up (increased) for any outstanding balance. Employees will now be responsible for the payment of any additional income taxes that result.
Control-D Report
Control-D report NPAY771 (Time Entry Payment Report) identifies all employees for whom the Prepaid Legal Service Benefit was applied.
Tax Information
The Prepaid Legal Service benefit is supplemental taxable income, will be added to the employee’s taxable gross wages, for tax withholding purposes, and is subject to employment and income taxes.
Federal, State, and New York City income tax withholding will be calculated using the Aggregate method. Yonkers income tax withholding will be calculated using the Flat Rate method. Yonkers Flat Rate Withholding is 1.61135% for Yonkers residents and 0.50% for Yonkers non-residents.
Agency Actions
Agencies must notify affected employees.
Payroll Register and Employee’s Paycheck/Advice
The applicable earnings code and associated value will be displayed on the agency’s payroll register and the employee’s paycheck and/or direct deposit advice.
Questions
Questions regarding this bulletin may be directed to the Tax and Compliance mailbox.