Purpose:

The purpose of this bulletin is to provide the Division of Housing and Community Renewal with instructions for processing the DC37, Local 1359 FY 2024-2025 Higher Education Differential. 

Affected Employees:

Employees in the Rent Regulation Services Unit (RRSU – BU67) who meet the eligibility criteria are affected.

Background:

Chapter 177 of the Laws of 2024, which implemented the 2023-2026 Agreement between the State of New York and DC37, provides for a lump sum payment of up to $600 to eligible employees who hold an earned Associate’s Degree, Bachelor’s Degree, Master’s Degree, or Doctorate from a college or university or a professional license issued by the New York State Education Department. These monies will not be added to base salary, are not subject to salary increases, and are not pensionable.

Effective Dates:

The DC37 FY 2024-2025 Higher Education Differential should be processed using the following effective date and beginning in the following check date:

Eligibility Criteria:

Employees who meet the following criteria are eligible to receive the DC37 FY 2024-2025 Higher Education Differential.

• Employees must hold a qualifying degree or professional license and provide proof, such as a copy of their diploma or license, to their agency human resource office.

  Note:  Each agency human resource office shall notify employees on how to submit such proof.

• Employees must be in a BU67 position with an Employee Status of Active, Leave With Pay, or Leave of Absence on the Effective Date in the Effective Dates section.
  • Employees with an Employee Status of Leave of Absence with an Action/Reason code of Leave of Absence/MLS (Mil Stip) can receive the payment starting on the Check Date provided in the Effective Dates section.
  • Employees with an Employee Status of Leave of Absence with an Action/Reason code other than Leave of Absence/MLS (Mil Stip) are eligible for the payment if they return to the payroll on or before the End Date in the Effective Dates section.

OSC Actions:

OSC has created the following Additional Pay Earnings Code to process the Higher Education Differential:

Agency Actions:

Calculation of Higher Education Differential Payment Amount

An employee’s Comp Rate Code and work percent on the Effective Date in the Effective Dates section determines the methodology used to calculate the Higher Education Differential. If an employee has an Employee Status of Leave of Absence with an Action/Reason code other than Leave of Absence/MLS (Mil Stip) on the Effective Date, the employee’s Comp Rate Code and work percent immediately prior to the leave should be utilized to determine the appropriate methodology.

Full Payment Amount:  The following employees must receive the full payment amount of $600.

• Employees with an Employee Status of Active or Leave With Pay whose Comp Rate Code is ANN and work percent is 100% on the Effective Date.
• Employees with an Employee Status of Leave With Pay with an Action/Reason code of Paid Leave of Absence/SKL (Sick Lv) whose Comp Rate Code is ANN and work percent is 50% on the Effective Date.
• Employees with an Employee Status of Active whose Comp Rate Code is ANN and who are on a voluntary reduction in work schedule (VRWS) on the Effective Date.
• Employees with an Employee Status of Leave With Pay with an Action/Reason code of Paid Leave of Absence/MLS (Mil Stip) whose Comp Rate Code is BIW and work percent is 100% on the Effective Date.
• Employees with an Employee Status of Leave of Absence with an Action/Reason code of Leave of Absence/MLS (Mil Stip) whose Comp Rate Code is ANN and work percent is 100% on the Effective Date.

Prorated Payment Amount Based on Work Percent:  The following employees must receive a prorated payment amount determined by multiplying the full payment amount of $600 by the employee’s work percent in effect on the Effective Date.

• Employees with an Employee Status of Leave With Pay with an Action/Reason code of Paid Leave of Absence/MLS (Mil Stip) whose Comp Rate Code is BIW and work percent is less than 100% on the Effective Date.
• Employees with an Employee Status of Leave of Absence with an Action/Reason code of Leave of Absence/MLS (Mil Stip) whose Comp Rate Code is ANN and work percent is less than 100% on the Effective Date.

Prorated Payment Amount Based on Hours Worked:  The following employees must receive a prorated payment amount based on the number of hours worked as described in the Calculation section.

• Employees with an Employee Status of Active whose Comp Rate Code is ANN and work percent is less than 100% on the Effective Date.
• Employees with an Employee Status of Leave With Pay with an Action/Reason code of Paid Leave of Absence/SKL (Sick Lv) whose Comp Rate Code is ANN and work percent is less than 50% on the Effective Date.
• Employees with an Employee Status of Leave With Pay (except with an Action/Reason code of Paid Leave of Absence/SKL) whose Comp Rate Code is ANN and work percent is less than 100% on the Effective Date.

Calculation:  The prorated Higher Education Differential amount based on hours worked must be calculated as follows:

• Total the hours worked between 10/01/2023 and 03/31/2024, including hours charged to accruals and hours while on an authorized leave of absence.
• Hours associated with the following Earnings Codes must be included in the total hours worked.

• The total hours worked must be divided by 1,040 (130 workdays between 10/01/2023 and 03/31/2024 x 8 hours per day).
• The result must be rounded to 4 decimal places. This is the proration percentage.
• The full lump sum payment amount of $600 must be multiplied by the proration percentage and rounded to the nearest cent. This is the prorated Higher Education Differential payment amount.

Submitting Payment

To pay the FY 2024-2025 Higher Education Differential to eligible employees, the agency must submit the following information on the Additional Pay page or the Automated Interface (NHRP573):

Overtime Calculation:

The Higher Education Differential must be included in the calculation of overtime compensation.

Annualized Employees

The Higher Education Differential will be included automatically in the calculation of overtime earned from the OT Eff Date through the End Date on the employee’s Additional Pay page for Earnings Code HED.

Ending Overtime Eligibility

If an employee has received a Higher Education Differential (Earnings Code HED) and is appointed to a position which is not eligible to receive the payment, the Higher Education Differential cannot be included in the compensation calculation of any overtime earned on or after the date of the appointment. Therefore, the agency must insert a row on the Additional Pay page or the Automated Interface file (NHRP573) at the Effective Date level of Earnings Code HED and enter the following information:

Retirement Information and General Deductions:

The Higher Education Differential is not included as salary for members of the New York State and Local Retirement System. Additionally, the payment is not subject to union dues but deductions will be taken from the payment for garnishments and levies.

Tax Information:

The Higher Education Differential monies are supplemental taxable income subject to all employment taxes and income taxes, will be included in the employee’s taxable gross, and reported on the employee’s Form W-2.

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 (1.95975% for Yonkers residents and 0.50% for Yonkers Non-residents).

Special Wage Payments for Individuals Who Filed for Retirement Social Security Benefits:

Per Internal Revenue Service Publication 957, OSC will be reporting retroactive payments made to individuals who have filed for Social Security benefits to the Social Security Administration (SSA).

As PayServ does not include this information, OSC will be mailing a Request for Special Wage Payment Report to inactive individuals who are 62 or older in the calendar year and to active employees with the New York Retiree Indicator checked in Modify a Person who receive the retroactive payment. Recipients of this mailing will be asked to fill out the request and return it to OSC for inclusion on the Special Wage Payment Report to SSA. This report will be submitted to SSA after the close of the 2024 tax year.

It is important that agencies ensure the New York Retiree Indicator box is checked for rehired retirees. Please see Payroll Bulletin No. 1728 – New York Retiree Indicator for further details on the New York Retiree Indicator box.

Payroll Register and Employee’s Paycheck/Advice:

Earnings Code HED and the amount paid will be displayed on the Payroll Register. The Earnings Description (Higher Education Differential) and the amount paid will be displayed on the employee’s paycheck stub or direct deposit advice. If the number of earnings codes exceeds 13, agencies should utilize Locked Query LQ_PCD_PAYCHECK_EARNINGS_BY_ID to identify a complete list of earnings.

Undeliverable Checks:

When a valid payroll check is undeliverable due to the agency’s inability to locate the employee, the agency should follow the Agency Actions identified in Payroll Bulletin No. 1786 – Non-Negotiated and/or Undeliverable New York State Payroll Checks.

Checks issued to eligible employees who are now deceased should be submitted as a Stop Payment Request with a reason of Exchange in PayServ. The Report of Check Exchange (AC 1476-P), Next of Kin Affidavit (AC 934-P), and original death certificate should be submitted to the Payroll Reversal and Exchange mailbox at the same time as the Stop Payment Request. If a Next of Kin Affidavit has been previously submitted for a deceased employee’s payroll check, OSC will accept a photocopy of this form along with a new Report of Check Exchange.

Questions:

Questions regarding eligibility may be directed to the Office of Employee Relations.

Questions regarding this bulletin may be directed to the Payroll Earnings mailbox.

Questions regarding deductions may be directed to the Payroll Deduction mailbox.