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Pay Equity Questions and Answers

PAY EQUITY QUESTIONS AND ANSWERS

ACTING

	Q1:	What will happen if the department reported 238 (acting premium) outside of the dates of September 1, 1986 to April 30, 1989?
	A:	Automatic Pay Equity payments for the period from April 1, 1989 to July 28, 1998 will be based on the classification reflected in Salary Service History (SSH) therefore if the substantive classification is reflected and is one of the affected groups then this period will be paid. The acting classification is what should really be reflected on SSH for periods of acting after April 30, 1989 and Pay Equity should be paid on the acting group and level if applicable.

	Q2:	In some cases the acting was reported as 002 and not 238 during this period. Should this be changed?
	A:	Yes. This should be changed for the period April 1 to April 30, 1989.

AUTO RETRO

	Q1:	If an employee; who is currently 7C; has prior service as 7A will the system automatically generate both portions of the payment?
	A:	No. The system will only automatically generate the payment for periods of 7C service. Departments will be required to report all periods of 7A service. The system will produce a paper proforma identifying all past periods of 7A service for all accounts.

	Q2:	Have accounts on a 6C pay cycle in the EU group been included in the automation? Will Lotus/Excel be fixed to correctly calculate the amounts for these accounts?
	A:	All 6C accounts must be reported by the department using the "ENC" screen and the appropriate Pay Equity entitlement codes to ensure accurate payments. These accounts have not been included in the automation. Reports will still be produced identifying these accounts.

	Q3:	Employee was part-time but is now full time. How will the system produce the payment?
	A:	The system will calculate the payment based on the Assigned Work Week (AWW) shown on the SSH for each period. It will prorate the part-time service based on the AWW / 5 multiplied by the number of days in the retro period until there is a change in AWW. The payment will be calculated on full time hours effective from the date the employee became full time. A notification will be produced for payments for part time service of a possible adjustment required.

	Q4:	Will the 5% be automatically produced on all payments to 1994?
	A:	Yes. The 5% will be automatically calculated and paid on all retro periods ending prior to April 1, 1994.

	Q5:	Some departments made recoveries using 18R049 instead of 15C301 in the past. Will PWGSC be correcting this?
	A:	No PWGSC will not correct this. Departments must verify all payments to ensure accuracy and may be required to do adjustments if 18R049 was used instead of 15C301 for periods of LWOP.

	Q6:	When the equalization is stopped and the pay equity is rolled into the rate of pay will the 7A's be included in the automatic retroactivity?
	A:	Yes 7A's will be paid the retroactivity automatically from 29/07/98 to date along with the 7B and 7C accounts.

	Q7:	Why were some pay equity cheques processed with double lines of payments?
	A:	The employee must have 2 master employee records on the system. This would happen when the employee transferred to another master and the master was not transferred to the new department account.

	Q8:	If I must do a PAC to pay a missed period, do I have to report a PAC for the additional 5%?
	A:	No, the system is programmed to pay the 5% automatically as long as the pay equity entitlement codes are used to request the payment.

	Q9:	How do I report the periods for the missed period?
	A:	Report the periods by fiscal year, breaking the service by pensionable and non pensionable service. We must also remember to break the period at the 31-03-1994 for the payment of the 5%.

	Q10:	Which codes do we use to report the missed period?
	A:	We must always use the newly created pay equity entitlement codes. This will ensure that the payments are charged to TBS and not the departmental account.

	Q11:	If the cheque is cancelled, will PWGSC process another one automatically?
	A:	No, the Compensation Advisor must wait until the cheque is cancelled by the accounting section at PWGSC and then report the pay actions via on-line to cover the full period of payment.

	Q12:	Which PAC must we use to request a payment?
	A:	If SSH is correct, and a pay equity line is posted on SSH, request the payment with an EAJ. If salary service is correct but the pay equity payment line is missing request the payment via an ENC action, using the new pay equity codes. Do not request the 5% additional payment as the system will generate this payment automatically. If the payment was made at the wrong amount, report an ENA to request the difference in rate. If the rate is correct on SSH but the incorrect number of days were paid, request the amount missing with an EAJ. If there is an error on the MER or SSH, corrections must be done accordingly. (ENC or MIS) A PAC ENC must also be reported to request the payment.

	Q13:	If a payment was received at the wrong rate how do we pay the difference?
	A:	If a correction is required to the MER or SSH then the account must be corrected accordingly. Then an ENA must be reported using the old rate and the new rate to pay the underpaid amount.

	Q14:	If an employee did not receive any payment, can we request the payment now?
	A:	Before requesting a payment, verify with the former departments if the employee's payment was processed on their paylist. SSH must also be verified to confirm that no payment was processed. If a cheque was processed the pay equity lines will appear on SSH. If you do not know where the employee may have worked previously, please contact your Client Service Centre to help you identify a former employer.

DEDUCTIONS

	Q1:	How will DI and DB be adjusted?
	A:	Departments are to calculated the amount of adjustment required and collected the arrears from a future pay equity supp using the new "SDD" screen.

	Q2:	Can debts due to the crown be recovered from the pay equity payments and how?
	A:	These amounts can be recovered using the code 540 and the "SDD" screen that has been created for departmental use for deductions from a supp. All Pay Equity adjustments including interest are garnishable.

	Q3:	Can we process requests to have extra tax withheld from Pay Equity supps? Employee completed a TD3.
	A:	A TD3 is to be used for non employment income only and does not apply to pay equity. The employee can complete a TD1 and have extra tax withheld from their future ongoing regular pays.

DUAL

	Q1:	How will the system issue cheques for dual employment?
	A:	If the employee is currently on dual employment (TSOS with one department and working with a second department) two cheques will be issued. One for each department. If the employee has PAST periods of dual employment then all the payment will be produced under the current employing department. In these instances there may be retro periods paid and superannuation deficiencies collected for the same period and adjustments will be required.

	Q2:	How will the system issue cheques for dual remuneration?
	A:	If the secondary position is paid using the code 027 or 232, then pay equity will only be paid on the primary position and the department will be required to report adjustments that may be owing on the secondary position if applicable. If the employee is currently receiving two cheques (from two different departments) then two pay equity adjustment cheques will be produced if the employee occupies two position within the affected groups.

INTEREST

	Q1:	How will interest be calculated and paid?
	A:	A: Interest will be calculated on April 1 and October 1 of each retroactive year based on the following formula: Gross adjustment (including 5% Lump sum if applicable) x 90% divided by 2 x (Canada Savings Bond rate divided by 2). The adjustment has to have been earned in the previous six month period before interest can be calculated. Interest is not compounded.

	Q2:	What interest rate will be used?
	A:	The interest is to be calculated on the Pay Equity adjustments paid to eligible employees at the Canada Savings Bond rates determined on April 1 and October 1 of each year up to the production date of the actual supplemetary payment.

	Q3:	How will the system know what to pay?
	A:	Interest is calculated and paid on the pay equity codes. The amount of Pay Equity adjustment for each fiscal year is totaled prior to applying the formula. The total amount must have accumulated 6 months before interest is accrued on the amount.

	Q4:	Is interest calculated on adjustments owing?
	A:	Yes, interest is calculated on all adjustments. For recalculations of both entitlements and separation benefits the to-date is used to determine the date at which the entitlement is due. The same date determines the fiscal year to which the payment applies and the date from which the interest is calculated.

	Q5:	What dates will be used on the interest payments?
	A:	Transactions created for interest payments will have the from and to date on the transaction the same as the due date of the payment. Example from 01-10-86-1 to 01-10-86-2.

	Q6:	What is the date that interest payments are scheduled to run?
	A:	The initial run for interest payments is scheduled for November 24, 2000 for all transactions reported up to that date. A second run is tentatively scheduled for January/2001. This run will pay interest on all adjustments reported after 24/11/2000.

	Q7:	Can overpayments be collected from the interest payments?
	A:	Yes, overpayments can be collected from the interest payment. Client departments must create the overpayment prior to the interest run. An overpayment produces a register. To pay the interest, the system will read all the transactions on the register data base file. If the overpayment is not created prior to the run, then interest will be calculated on the incorrect amount.

	Q8:	How do we collect an overpayment off the interest payment?
	A:	If you want an overpayment specifically to come off the interest payment, the overpayment must be entered in the overpayment screen (OVD) in the system in the supplemetary run prior to the interest run. If the entry is done too early, the collection could come off any other entitlements that the employee may receive.

	Q9:	What deductions will come off the interest payments?
	A:	Interest payments are not subject to any statutory deductions. In other words the interest income will not be taxed at source but will be included as income when the employee files his return.

	Q10:	Will employees be issued T-5 Statement of Interest Income slips?
	A:	Employees will be issued the T-5 to use when filing their income tax returns for the taxation year 2000.

	Q11:	Is interest always non taxable at source?
	A:	Interest payments are non taxable. However, if you are a non resident the payments are taxable at source using the applicable non resident tax rate.

	Q12:	How will Compensation Advisors know if an employee is a non resident?
	A:	The non resident must inform his Compensation Advisor that he is a non resident.

	Q13:	How will the Compensation Advisor know what tax rate to charge?
	A:	The withholding rate is generally 25% of the gross interest paid. However, provisions of a tax convention, a tax agreement or a protocol between Canada and another country may provide a reduced rate. CCRA has provided a list with an up to date rate. This list has been forwarded to the Compensation Services Office.

	Q14:	How does the Compensation Advisor enter the income tax amount to be collected off the pay equity payment?
	A:	The Compensation Advisor manually calculates the amount of income tax to be withheld from the payment and creates a supplementary deduction (SDD) screen with code 595 lump sum. The pay period field is to be left blank.

	Q15:	Can superannuation deficiencies be recovered off the interest payments?
	A:	Yes, deficiencies can be recovered from the interest payments. Deductions must be timed to enter in the same for the same night as the interest run.

	Q16:	What happens if a cheque is not cancelled prior to the interest run?
	A:	The interest payment will be overpaid. Client departments can either return the cheque and reissue the payment or enter an OVD on the account that will go against the employees next regular pay cheque.

	Q17:	How will the Compensation Advisor verify the interest payments?
	A:	TBS will provide the client community with a computer based application that can be used with the lotus and excel spreadsheets to calculate the interest.

1ST INTEREST RUN PROCESSED NOVEMBER 24, 2000 EXTRACTED DATA FROM THE REGISTER DATA BASE UNTIL NOVEMBER 22, 2000
SCENARIO	PAYMENT DATE	RESULT	ACTION REQUIRED
Pay Equity Supps paid for 8/3/85 to 14/6/2000	Payments issued between Apr./00 and Sept./00	Interest payment issued Nov. 24/00	No Action Required
Pay Equity Supps paid for 8/3/85 to 14/6/2000 Cheque cancelled Pay Equity Supp repaid in Oct./00	Payments issued between Apr./00 and Sept./00 Cancelled cheque in Sept./00 Reissued Oct./00	Interest payment issued Nov. 24/00	No Action Required
Pay Equity Supps paid for 8/3/85 to 14/6/2000, Overpayment entered prior to Oct./00	Supp dated Apr./00 and Sept./00 Overpayment dated prior to Oct./00	Interest Payment issued Nov. 24/00	No Action Required
Pay Equity Supps paid for 8/3/85 to 14/6/2000, Overpayment entered after Oct. 1/00 but prior to Nov. 22/00	Supp dated Apr./00 and Sept./00 Overpayment dated after Oct.1/00 but prior to Nov. 22/00	Interest payment calculated on supp incl. Apr./00. Interest calculated in October on OVD amount. A minus is posted on the account.	If both PE supp and OVD created after Sept./00 and OVD amount greater than supp then interest not correct for Oct./00. These accounts will appear on a report and must be verified by the Dept.
Recalculation Done for 98-00	Cheque dated prior to Oct. /00	Interest calc. up to Apr./00.	No Action Required
Recalculation Done for 98-00	Cheque dated after Oct. 1/00	Interest calc. up to Oct. /00	No Action Required
Recalculation Done for 98-00, Overpayment entered Sept/00	Recalculation done June/00 Overpayment entered Sept./00	Interest calculated considering overpayment up to Apr./00.	No Action Required
Recalculation Done for 98-00, Overpayment Entered Oct/00	Recalculation done June/00. Overpayment entered in Oct. /00.	Interest payment calculated on supp incl. Apr. /00. OVD is after Oct./00. Interest is calculated in October on OVD amount. A minus is posted on the account.	If PE supp issued after Sept. /00 and OVD created for amount greater than supp after Sept./00 then interest not correct for Oct./00. These accounts will appear on a report and must be verified by the Dept..
Recalculation Done Oct. 15/00, Recalculation cheque cancelled in Dec./00 after interest run.	Interest Payment issued Nov, 24/00.	Interest cheque is overpaid the amount of interest calculated on the recalculation cheque.	Compensation Advisor to enter amount of interest overpaid.

INTEREST PAYMENTS (SECOND RUN) DATA RETRIEVED FROM NOVEMBER 23, 2000 ONWARDS
SCENARIO	PAYMENT DATE	RESULT	ACTION REQUIRED
Pay Equity cheque returned and cancelled after interest payment issued. Pay Equity balance owed to employee.	Cheque dated Sept. 15/00 canc. Dec. 1/00. Balance owing re-issued Dec. 3/00.	Nov. Interest overpaid due to Canc. cheque. PE due is greater than interest overpayment. Second run will calculate automatically.	Dept. calculates amount of overpaid interest . Compare OVD to balance of PE owing. Enter OVD code 246 for the overpaid interest.
Pay Equity cheque returned and cancelled after interest payment issued. Pay Equity balance owed to employee.	Cheque dated Sept. 15/00 canc. Dec. 1/00 Balance re-issued Dec/00	Nov. Interest overpaid due to Canc. cheque. PE due is less than interest overpayment. Second run will print minus amount on report. No cheque produced.	Dept. calculates amount of overpaid interest. Compare OVD to balance of PE owing. Enter OVD code 246 for the overpaid interest from Nov. and EAJ for interest on balance of PE due.
Pay Equity cheque returned and cancelled after interest payment issued.	Cheque dated Sept. 15/00 cancelled Dec. 1/00	Nov. Interest cheque is overpaid. No additional PE owing.	Department to calculate amount of overpaid interest from Canc. cheque and enter OVD code 246.
Overpayment of PE entered after interest payment issued. Nov. Interest cheque is cancelled.	Overpayment entered Dec. 1/00. Interest cheque cancelled Dec. 4/00	No additional PE owing therefore no amount for second run to calculate.	Department calculates interest and repays using EAJ.
Pay Equity paid from Apr. to Sept./00. Interest issued Nov. 24/00 PE OVP entered after first interest run.	Cheque dated Sept. 15/00 overpaid. Overpayment entered Dec. 1/00.	Interest is overpaid on PE OVD Second run will print minus amount on report.	Dept calculates amount of interest overpaid and enters an OVD code 246.
Recalculation done after Nov. 22/00	Cheque dated Dec. 1/00	Cheque date will reflect on register data base as after Nov. 22/00.	Interest will be issued on the payment in the second interest run.
Recalculation cheque paid in Sept./00 cancelled after Nov./00 interest run.	Recalculation cheque cancelled Dec. 2/00	Overpaid the amount of interest calculated on the original cheque.	Dept. calculates amount of interest overpaid and enters an OVD code 246.
Recalculation done after Nov. 22/00. Cheque cancelled after the Nov. 22/00	Recalc cheque dated Dec.1/00 Canc. Cheq. dated Dec.8/00	Register Data Base will reflect a positive and negative amount	Interest will not be calculated on this supp as the balance = 0.
Recalculation done after Nov. 22/00 Overpayment entered using dates from recalculation.	Recalculation done Dec. 1/00 Overpayment done Dec. 8/00	Both transactions will refect on the Register Data Base.	System will look at positive and negative amounts and calculate interest if balance is greater than 0. If balance is less then amount will appear on report.

LWOP

	Q1:	For periods of Maternity Leave; will this be automated and how will the payment be calculated?
	A:	Programming for the retro period from April 1, 1989 to July 28, 1998 inclusive will read the reason code for all LWOP periods. If the reason code is K and the employee was active the day prior to the start of the LWOP then the system will treat the employee as active for a period of 17 weeks (85 calendar days), or until a change in reason code, or until RE-TOS date, whichever is earliest. For the retro period from July 29, 1998 to date, maternity leave will be treated as LWOP and departments will be required to recalculated and adjust the maternity benefits paid.

	Q2:	Is parental leave to be treated the same as maternity leave when calculating the payments; in other words not reflected as LWOP?
	A:	Only periods where maternity *benefits* were paid is this period to be considered as active and not treated as LWOP. The system has no record of benefits paid therefore in order to automate the majority periods of maternity leave will be paid but departments are responsible for verifying that benefits were paid during this period.

	Q3:	If only a portion of the 17 weeks maternity leave period was paid, how do we pay the balance owing?
	A:	You must report a EAJ with the pay equity code 269 for the period not paid. The system will generate the 5% additional payment if applicable.

	Q4:	Why is a period of maternity leave not treated as active and the 17 weeks not paid?
	A:	If a transaction was processed for the employee with an effective date that is during the period of maternity leave(such as a stat increase or a revision) then the employee is considered to have broken their maternity leave service and pay equity adjustments are only paid up to the day prior to the effective date of the change.

PENSIONS

Q1:

Will pension deficiencies be collected from the pay equity adjustments reported on the Excel / Lotus proforma? Will the system calculate the additional PSSA for Operational employees with PEN? For employees who were non pensionable and are now pensionable will PSSA only be picked up for the pensionable time?

Pension contributions will be withheld from all Pay Equity adjustments reported using the pensionable codes including the Excel / Lotus proforma based on the employees current contributor code in F39 of the MER. If F39 = 10 or 18 (PEN examples) and the retro period is after 1996 then the special rate will be used for the calculations. Pension contributions will not be calculated on the periods of adjustments that are reported using a non pensionable code. If the employee has previous pensionable service but is now a non contributor (F39 > 50) then the pension will not be withheld on any of the adjustments.

Q2:

Employees that were part time non pensionable prior to 1994 are now pensionable. Will the system calculate PSSA for the entire period.

PSSA will be calculated for the periods paid using a pensionable code only and only if the employee is currently a contributor.

Note that Questions 3 to 7 apply to former employees who have received a Pay Equity payment following termination of employment, and who opted for an annuity or lump sum pension benefit other than a Return of Contributions.

Q3:

For SOS accounts where the Pension Support System (PSS) was used on termination, why is it necessary to perform the "SUBMIT" action via the PSS for all Pay Equity cases? Normally, there is an automatic recalculation by the PSS and Superannuation Directorate is automatically notified of the change.

The "automatic trigger" process is not being used for Pay Equity cases, because the pension recalculation is not to be done until all pensionable Pay Equity payments have been paid to the individual. Therefore, the Compensation Advisor must perform the "SUBMIT" action in order to notify the Superannuation Directorate once all pensionable payments have been made.

Q4:

For SOS accounts where the PSS was not used on termination, and where the client department used on-line pay or bulk input instead of the Lotus/Excel Pay Equity Tools, how are the additional pensionable Pay Equity earnings to be reported to the Superannuation Directorate?

In this case, the Compensation Advisor is to report the additional pensionable earnings in one of the following ways:

1)	By performing the "SUBMIT" (SUBM) action via the PSS and completing the "Certification Notice--Pension Support System" (PWGSC-TPSGC 2386). In this case, it will be necessary to determine and verify the salary and service for the former employee's best five or six years, as applicable, in the same manner as for a new termination case.
2)	By completing an Excel/Lotus spreadsheet to attach to the PWGSC-TPSGC 2386.

Q5:

What if the account is no longer resident on the Contributor System?

The process described in item 2) above is to be followed instead of attempting to create the account on the Contributor System.

Q6:

In cases where the PSS is not used to report the additional pensionable Pay Equity earnings, how are the additional earnings as a result of the recalculation of all salary related events (e.g. promotions, acting pay, etc.) to be reported?

In these cases, the additional pensionable earnings are to be added to the Excel/Lotus spreadsheets along with the Pay Equity payments.

Q7:

There are several cases where a former employee who received the Pay Equity settlement also received a salary revision as a result of a new collective agreement, a reclassification, and/or a recalculation. How are these final salaries to be reported to the Superannuation Directorate?

Only one PWGSC-TPSGC 2386 is to be completed. Compensation Advisors must attach an explanation to the form to indicate the applicable authority for each salary (e.g. Pay Equity settlement, collective agreement, etc.), the date of each authority, and the salary that relates to each date. This information is required in order to determine the final salary for Supplementary Death Benefit purposes.

RECALCULATIONS

Q1:

How will employees that are salary protected be treated for pay equity?

Salary protected employees will be paid pay equity based on the classification reflected on the SSH (the classification of the position that the employee actually occupies). Departments will be required to recalculated effective April 1, 1994 to determine if salary protection still applies and may be required to adjust accordingly.

Q2:

Will "Premium pay in lieu of statutory holiday" (4.25%) be automatically paid on the adjustments?

This allowance is to be recalculated only effective from 29/07/98 and is not to be paid prior to this date. It will not be paid automatically but must be calculated and reported by the department.

Q3:

Which screen do we use to report the adjustment of overtime?

The adjustment of overtime is reported on the extra-duty pay (EDP) screen using the new pay equity codes created for extra-duty entitlements.

Q4:

Will Treasury Board Secretariat (TBS) be issuing an information Bulletin to aid client departments in the recalculation process?

TBS issued a bulletin entitled "Pay Equity Agreement between TBS and PSAC" dated July 24, 2000, that deals with various recalculation situations. This bulletin should be read in conjunction with previous bulletins dated January 27, 2000, and April 3, 2000.

Q5:

When doing recalculations, when is recovery action required?

Recovery action may be required in the case of the automatic updates of the rates of pay effective July 29, 1998. When the blended rates were implemented, the rate was revised to the rate immediately below the rate previously being paid (straight down). Upon recalculation, if the rate is incorrect, departmental input is required to recover the salary overpayment between the automatic revised rate and the rate at which the employee should have been paid. Departments are also required to change the ongoing salary rate.

Q6:

What effect does the date of November 16, 1999, have on the salary charges?

The Pay Equity retroactive period is from March 8, 1985, to November 15, 1999, (the date preceding the date on which the agreement was approved by the Canadian Human Rights Tribunal [CHRT]). Events occurring between April 1, 1994 and November 15, 1999, inclusively, which were authorized prior to November 16, 1999, and are the result of a change to the rate of pay, should be charged to Pay Equity. Events authorized on or after November 16, 1999, should be recalculated using the blended rates and there should be no additional charges to pay equity. Any adjustments owing or overpaid due to the recalculation of the events authorized after November 15, 1999, are to be charged to the department.

Q7:

I have an employee who commenced acting pay in an AS-01 position effective March 15, 1994. Do we do a recalculation of the acting pay effective April 1, 1994, or because the period of acting pay actually commenced prior to April 1,1994, do we not do the recalculation.

No, you do not recalculate the acting with a start date effective prior to April 1, 1994. If the employee is appointed to the AS-01 position subsequent to the acting and AFTER April 1, 1994, then you would recalculate the appointment only and not the acting. Recalculations are to be done if the event has a start date of April 1, 1994, or later.

Q8:

An employee as a CR-3 maximum (paid at $29,934) received acting at the CR-4 level effective December 12, 1999, at the second step (paid at $31,155). When the blended rates were updated his salary was revised to $33,738. When we recalculate the acting he should have been appointed to the minimum of the CR-4. Since recalculation is done after the implementation of the blended rates do we correct the rate to the minimum and create an overpayment?

Prior to Blended Rates	Recalculation with Blended Rates
CR-3: $27,601, $28,377, $29,155, $29,934	CR-3: $29,664, $30,440, $31,218, $31,997
CR-4: $30,283, $31,155, $32,026, $32,892	CR-4: $32,866, $33,738, $34,609, $35,475
Lowest increment: $866	Lowest increment: $866
$29,937 + $866 = $30,800	$31,997 + $866 = $32,863

Treasury Board has specified that, upon recalculation due to pay equity, an employee cannot receive less than his previous rate of pay. Since the previous rate of pay was $31,155 and the minimum revised CR-4 rate is $32,866 (greater than $31,155) the employee's rate of pay must be adjusted. Adjustments OWING due to pay equity recalculations must be paid using a pay equity code and charged to Treasury Board. Since the acting pay was authorized AFTER November 15, 1999, the acting rate of pay must be changed to the minimum of the CR-4 ($32,866) and an overpayment is to be created using the pay equity codes under which the adjustment was original paid (code 277--Pay Equity Basic Pay Adjustment or 278--Pay Equity Basic Pay Adjustment--Non-superannuable). Amounts that are owing due to the recalculation are to be paid using the regular codes (002 for acting pay/acting appointment or 001 for basic pay) and charged to the department. Using your example:

CR-3 blended rate effective 20-06-99 is $31,997
Acting CR-4 blended rate effective 12-12-99 is $32,863
Recalculation of acting CR-4 cannot be less than previously received ($32,863) and minimum CR-4 is $32,866. Therefore, the employee loses a step but still receives more than before.

Q9:

Currently working in pay period 14-00 and processing recalculation transactions for acting pay for question above. For the retroactivity owing from December 12, 1999, to current do I use code 277 up to the end of pay period 12-00 (07-06-00) [when the blended rates where updated] and put my REV 002 in effective June 8, 2000, (pay period 13 start date) and pay 10 days retroactivity as code 002 or should all retroactivity be charged to Pay Equity code 277 (TB) up to the current pay period (pay period 14-00) and REV 002 effective pay period 14-00 start date? If some clients don't get around to making the recalculations until October 2000, TB will be charged with all this retro, whereas an account which needed no recalculation has had their blended rates charged to the department from pay period 13 onwards.

Regardless of when the department actually reports the recalculation of an event that was authorized prior to November 16, 1999, the adjustment for the period up to the end of pay period 12-00 (June 7, 2000) is to be charged or credited to Treasury Board and reported using code 271 or 272 for the period up to July 28, 1998, and code 277 or 278 for the period from July 29, 1998, to June 7, 2000. The department is to be charged with the all adjustments from June 8, 2000, to the date the transaction changes the ongoing rate of pay or from the event effective date if it was authorized after November 15, 1999.

Q10:

What happens when an employee is a SI-2 and is reclassified to a CR-4 (salary protected at the SI-2 rate of pay) and then receives an acting assignment as a PM-2 after June 1998? The assignment to the PM-2 was calculated originally from the SI-2 rate and brought him to the second step of the PM-2. Do we use the new blended CR-4 rate to recalculate the acting pay? If we do, then the acting should be at the third step of the PM-2. Or do we just ignore the CR-4 blended rate for recalculation purposes since the employee was salary protected at the SI-2 rate?

The SI reclassification to the CR is to be recalculated on the effective date of the action as well as the acting assignment. If the recalculation of the acting from the CR blended rate to the PM-2 brings the employee to the third step, then an adjustment is to be paid between the second and third step for the period of acting using pay equity code 277 or 278 if the acting was approved prior to November 16, 1999.

Q11:

I have a case where an employee is overpaid from April 1, 2000, (promotion date). Is the department to recover the overpayment as pay equity or as a regular salary overpayment? If they recover as pay equity, will this be credited back to Treasury Board (as opposed to charged to TB when payments are done)?

The recovery of overpayment is credited to Treasury Board since the original payments were charged to Treasury Board. This is done automatically when the transaction is reported using the pay equity codes.

Q12:

Prior to July 29, 1998, the rates used in the recalculation is for administration purposes only. Does this mean that departments are to use the amalgamated rates when doing recalculations but are not to report the blended rates.

Before July 29, 1998, use the amalgamated rates for administrative purposes only and report the blended rates with an effective from date of July 29,1998, or later.

SEPARATION BENEFITS AND SOS

	Q1:	What dates are to be used in the reporting of the separation benefit adjustments? What rate amounts should be used?
	A:	When reporting the separation benefit adjustments for employees SOS prior to 29/07/98 the original dates used for severance pay should be used. The rate amount reported is the rate applicable for the year in which the employee was SOS'd pro-rated to assigned work week for part time employees. If the SOS is after 28/07/98 then all separation benefits are to be recalculated using the blended rates of pay.

	Q2:	Who will be responsible for the payment to former employees who deceased after date of SOS? What will be the procedure? What documents are required?
	A:	PO will be responsible for ensure that the payments are made payable to the "Estate of the late" and that no deductions are withheld and a statement of remuneration is not produced for this payment. This will be done after the department has returned the cheque for cancelation and has submitted the transaction to report the title. If possible a copy of the legal will should be provided to the department. If not the cheque is made payable to the "Estate".

	Q3:	What documents are required for proof of eligibility for payment?
	A:	Employees and former employees do not have to prove they are eligible for the payment. There does not currently exist a "sunset" date. If an employee has changed names then they should provide a copy of the document authorizing the name change (marriage certificate, decree of divorce).

	Q4:	An employee was a contributor, went SOS and received a return of contributions. This employee is now re-employed under cycle 7A as a non contributor. Why were pension contributions withheld from the Pay Equity adjustment cheque?
	A:	The service that was as a contributor resulted in transactions using the entitlement code 267 and if this period was prior to December 1996 "PE" was reflected in the Pay Period. The system automatically calculated and collected pension contributions for this service even though the employee is a non contributor. Message N86 was not produced but a listing was sent to the pay office to verify all pension deductions for all 7A accounts.

	Q5:	If an employee is deceased after SOS but prior to the agreement approval date of November 16, 1999, who is responsible for the adjustments?
	A:	If an employee deceased after SOS but prior to the agreement date of November 16, 1999, then the departments are responsible to determine the "payor"' for the adjustments owing. Any automated retroactivity cheque that is produced for these employees must be returned for cancellation. The retroactive period of 1985 to 1989 should be created leaving the number of days blank. Once the Payor has been identified, a PAC 34 should be reported and a notice sent to the Pay Office to advise of the date of death after SOS. The Pay Office will ensure that the adjustments are paid and that the statutory deductions are not withheld from the payment and that a T4 is not produced.

	Q6:	Pay equity payments made to former employees who have died after November 16, 1999, but prior to the payment being issued are NOT insurable (subject to EIP) but ARE pensionable (subject to CPP/QPP/PSS). Is this correct?
	A:	Yes, you are right; these payments would not be insurable (subject to the Employment Insurance Plan [EIP]). Pensionable in this case means Canada Pension Plan (CPP) or Quebec Pension Plan (QPP) and not the Public Service Superannuation Plan (PSSP). Payments issued after death are not insurable. When a payment is taxable it is also pensionable (as per the CPP and QPP legislation).
		Note: There could be cases where the first pay equity payment (issued in April) was insurable and the second payment (issued in September) would not be insurable because the person died between April and September 2000.

\|	Q7:	What Pay Equity code should be used to pay the adjustment to the balance of month of death for a former employee?
\|	A:	The code 274 should be used to ensure that this amount is included on the T4A or Relevé2 for the estate.

TAX WAIVERS

	Q1:	Should we be offering tax waivers to SOS employees? How will these be input for the automated runs?
	A:	Former employees can complete a tax waiver to be applied to the pay equity payments if they wish. Tax waivers will be input using the departments regular input method but controlled to ensure that these transactions are processed in the same update as the automated runs.

	Q2:	Which dates do we use to report a tax waiver for the SOS accounts?
	A:	A tax waiver must not be reported with a future date. We should report the waiver using the payment dates. The same applies to tax waivers applicable on adjustment cheques for severance pay and separation allowances. They must be reported using the same period as the period used for these payments.

PROFORMA (LOTUS / EXCEL)

	Q1:	Where will the data on the spreadsheets be pulled from?
	A:	The data that is entered on the spreadsheet will be entered by the Pay and Benefit Advisors from the employees pay file. The Excel / Lotus conversion macro extraction program will pull the pay equity data directly from the Proforma portion of the spreadsheets. That is why client departments have been instructed to convert only the Proforma portion of the spreadsheets to a text format.

	Q2:	7A- 1985 to 1998 is on the proforma. Will the entire period pay?
	A:	The Excel / Lotus programs have been created to extract the entire 7A service from the proforma portion of the spreadsheet.

	Q3:	Will the ad-hoc payments show a different code on the finance reports?
	A:	The payments for Pay Equity will be charged to Treasury Board if the pay equity entitlement codes are used.

	Q4:	Can the departments key everything in rather than submit the proforma?
	A:	The Excel and Lotus spreadsheet routine is the approved Treasury Board method to pay the period of 1985 to 1989 for 7B and 7C accounts and the entire period for 7A accounts. As Treasury Board has indicated that the payments should be pure for pay equity, this is the current established process.

	Q5:	If the spreadsheets are in error, will the departments be required to key everything in on-line?
	A:	When the diskettes are received in the regional offices, they will be run through a process that has an edit routine. If an error is detected, the entire diskette will be pulled from production and a report will then be sent to the originating department for corrective action. The department will then retrieve the backup for the disk identified in error and perform the necessary adjustments. Once completed, the corrected diskette will then be sent to the pay office for processing. Diskettes containing accounts that are found to be in error will NOT be returned to the originating department. The entire process is outlined in Compensation Directive 2000-009 .

	Q6:	Can the H/D/W indicator on the spreadsheets be changed?
	A:	No. It cannot. The spreadsheets have been programmed to indicate a DAY or an HOUR indicator under specific circumstances. Attempts to change these indicators could cause data to become erroneous.

	Q7:	Can you have more than one spreadsheet per employee?
	A:	Yes. There is a maximum number of lines that can be entered on the Proforma portion of the spreadsheets (40 for excel and 50 for Lotus). Therefore, it is possible to have more than one spreadsheet per account.

	Q8:	Is everyone aware that the spreadsheets are not calculating properly for acting situation?
	A:	When the first version of these spreadsheets were created, the criteria was that employees in acting situations would be given the better benefit. However, when the actual pay equity agreement was reached, employees in acting situations were compensated based on the pay equity rates for the acting position itself even if the substantive position provided a better benefit. Therefore, client departments were instructed to only report the acting position itself for any acting situations.

OVERPAYMENTS

	Q1:	Do we cancel overpaid cheques?
	A:	If the amount overpaid is so large that we could not recover it from the first available funds, then the cheque should be cancelled.

	Q2:	What do we consider first available funds?
	A:	The employee's next pay cheque, a pay equity adjustment cheque for overtime or promotion. The overpayment should not be recovered from the interest cheque as it is not the next available payment to the employee.

	Q3:	Can an employee give a personal cheque to cover the overpayment?
	A:	Yes. The cheque must be made payable to the Receiver General of Canada, deposited to the departmental account and a CRT(PAC 20) using code 566 or 567 entered in the pay system to inform the pay office that the amount is recovered. Before this is done, the NET overpayment must be established in the pay system via the new OVD screen.

	Q4:	How does the OVD screen work?
	A:	The Compensation Advisor must enter the from and to date of the overpaid period and also the gross amount overpaid. The system will calculate a net overpayment in the next pay run. The 5% lump sum will be automatically calculated on the overpayment amount if the "effective to" date is prior to April 1, 1994. If the "effective to" date is prior to December 27, 1996 or is between December 24, 1998 and December 23, 1999 the pay period must be "PE". If the "effective to" date is between December 27, 1996 and December 23, 1998 the pay period must be left "blank". The CRT screen (PAC 20) will automatically debit the overpayment element by the amount of the personal cheque. Pay office intervention is no longer required.

	Q5:	When an overpayment is collected by personal cheque, the cheque is deposited to the departmental account. Will a journal voucher have to be created to transfer the money back to Treasury Board using the special pay equity coding?
	A:	No, a journal voucher will not be required as the overpayment process credits Treasury Board with the gross amount using to the correct coding according to the entitlement code used.

	Q6:	Please explain the overpayment process.
	A:	Once an overpayment is in history, the overpayment will be collected from the first available funds. The pay period on the OVD transaction should equal PE or be left blank to ensure that the overpayment is processed against year 2000 earnings and so that an amended T4 will not be issued. For interest calculations, the overpayment must be processed and in history prior to the issuance of the interest payments. It is very important that the exact dates of the overpayment and the pay equity codes are used when entering the overpayment. If the employee is paying by personal cheque, the department must enter the CRT to ensure overpayment is not collected from the next payment.

PUBLIC SERVICE SUPERANNUATION ACCOUNT DEDUCTIONS

	Q1:	It appears that PSSA deductions were taken when an employee received a Return of Contributions (ROC). Should we refund the money?
	A:	PSSA deductions taken for the period for which a ROC was paid will be refunded to the employee automatically if the account is still in SOS status. If the employee has been re-employed as a contributor and previously received a ROC, Departments must notify the Pay Office in writing so that a refund can be actioned.

	Q2:	If an employee or former employee has completed 35 years of service and is entitled to a Pay Equity settlement, PSSA contributions were deducted at 1% for the entire period of retroactivity. How is the balance to be collected?
	A:	Every effort is to be made to recover the PSSA contribution deficiencies from the Pay Equity payments (including interest) prior to the final instalment being given to the employee or former employee. If it happens that there are no further Pay Equity payments to be made, then it would be appropriate for the outstanding deficiencies to be recovered from other payments such as regular pay. The amount must be recovered over a period twice as long as that over which the deficiency occurred, or in the case of financial hardship, over three times the period of the deficiency. Any individuals so affected who retire, or who have already retired, will have this recovery action dealt with by the Superannuation Directorate. Detailed instructions for reporting information to Superannuation Directorate will be included in a SAM Special Bulletin to be issued later in the Spring.

T5s and Relevé 3s

	Q1:	Compensation Directive (CD) 2001-004 states that "individuals who are residents of Quebec should also receive a Relevé 3". Does this apply to employees who work in Ontario and live in Quebec or only those who work in Quebec? In other words, is the Relevé 3 based on the employee's province of work or the province of residence?
	A:	The Relevé 3 works like the Relevé 1 - it is produced based on the last known province of residence for struck-off strength (SOS) accounts and is based on the province of work for active accounts. In other words, all active employees who work in Quebec, regardless of province of residence, will receive a Relevé 3. All employees who work in a province other than Quebec, even if they reside in Quebec, will NOT receive a Relevé 3.

TAX COMPLIANCE

	Q1:	How were the amounts on the T1198(E) calculated?
	A:	The amounts were recorded into the taxation year based on the ”Effective to” date reported in the departmental input as reflected on the Payment Register Data Base (PRDB) [be it disk, on-line or tape]. The transactions that were created by the Regional Pay System (RPS) used either an “Effective to” date of March 31st or the last day of pay period (PP) 26 of each calendar year. There could be instances where the amount is understated in the earlier years and overstated in the later years based on the “Effective to” date used in the transaction.
		We have consulted with the Canada Customs and Revenue Agency (CCRA) and they have published a Q&A document concerning this situation. In the document, they state that it will probably not be in the employee's best interest if the adjustment paid is for the earlier period.

	Q2:	Could the fact that a transaction was done manually by a department rather than automatically through the RPS cause a major problem with the calculation? (i.e., 1985-1989 portion and 7A input.)
	A:	No, there is no problem. The “Effective to” date of all transactions, whether departmental input or system generated, was used to determine the year to which it applied.
		For most of the cases that were examined the differences were minimal and amendments are not to be issued. Amendments should be issued by departments only with reasonable request. Here is an example of a reasonable request for an amendment: multiple years are reported as a single transaction for a period from 1989 to 1996 and the entire amount was recorded in the 1996 year based on the “Effective to” date of the transaction.