HomeMy WebLinkAboutResolution 2015 (49) Resolution No. 49 (2015)
ST RO .,, RESOLUTION AMENDING THE HUMAN RESOURCES
' �' POLICIES AND PROCEDURES HANDBOOK ARTICLE 10
EMPLOYEE BENEFITS -PERSONAL TIME OFF (PTO)
1 WHEREAS, on March 20, 2015, St. Croix County was notified by the IRS of its
2 intention to conduct an examination of the County's payroll tax returns for 2013 with the focus
3 of the examination on the Paid Time Off(PTO) and Long-term Sick Bank(LTSB)programs;
4 and
5
6 WHEREAS, the IRS has aggressively challenged the County's tax treatment of the PTO
7 payout provision; and
8
9 WHEREAS, the IRS has asserted that because the optional annual PTO payout is elected
10 by the employee for up to 48 hours per year, that employees who have not made that election are
11 in "constructive receipt" of 48 hours as well and therefore said 48 hours is considered income;
12 and
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14 WHEREAS, if the IRS is correct in their position, the County would be liable for taxes
15 due for the years 2013, 2014 and 2015; and
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17 WHEREAS, the County is discontinuing the current Annual PTO payout immediately
18 and is modifying the related language from Article 10 Employee Benefits -Personal Time Off
19 (PTO), Section 6 Annual PTO Options by amending Article 10, Section 6 and creating Article
20 10, Section 6.1 as follows:
21
22 Section 6 Annual PTO Options. The Personal Sick Leave Bank can be replenished
23 annually. At the end of each calendar year, the employee has the option of taking up to
24 ninety-six (96)hours for full-time or forty-eight(48)hours for part-time out of the
25 employee's PTO account and placing the hours into the employee's Personal Sick Leave
26 Bank.
27
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29 of twei4ty f9tif(24) hetifs for-paft time etit of�he employee's PTO Eteeettfit a-Rd ee--
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34 The employee also has the option of carrying over all of the employee's PTO hours into
35 the new calendar year. If the employee does not choose to convert hours to their Personal
36 Sick Leave Bank^gin, the PTO hours will automatically be carried forward into the
37 new calendar year."
38
39 Section 6.1 Annual PTO Cash Payout Option.
40
41 1) An election period will be offered each year during the last ten (10) business days
42 of December, during which time an employee will have the opportunity to make
43 an irrevocable election to cash-out PTO hours that are scheduled to accrue in
44 the next calendar year at the end of that calendar year. An employee may not
45 elect to cash-out PTO hours previously accrued during the current year or any
46 prior year at the time of the employee's election.
47 2) This cash-out benefit option requires an Annual election. Due to IRS regulations,
48 elections will not carry over from one calendar year to the next calendar year.
49 3) An employee may elect to cash-out up to 48 PTO hours, depending on the
50 employee's expected annual PTO accrual.
51 4) A minimum of 120 hours MUST be in the employee's PTO bank, as of December
52 31't, in the year that an employee makes the election. An employee should allow
53 enough PTO hours in their bank in order to cover vacation, sick days, and
54 emergencies. The PTO hours an employee will accrue in the next calendar year
55 that the employee elects to cash-out will not be available to use during that
56 calendar year for these purposes. If an employee makes a deferral election and
57 the minimum number of PTO hours is not in the employee's PTO bank as of
58 December 31, the election will not be effective. If an employee's accrual rate
59 subsequently changes des (such as due to a leave or change as due to a leave or change in scheduled hours) so
60 that there are insufficient hours accrued in the plan year to cover the election, an
61 employee will receive only the balance of the elected PTO cash-out available at
62 the time of the cash-out. If there are no hours available, no cash-out will occur.
63 5) Except for employees who terminate employment during the calendar year in
64 which an election is in place, there is one PTO Cash-Out pay date. The cash-out
65 will accrue on the Wednesday after the first payday in JulY.
66 6) The PTO Cash-Out will be a separate direct deposit.
67 7) For part-time employees, the number of hours an employee can elect to cash-out
68 is pro-rated to 24 hours. However, the actual amount an employee can cash-out is
69 limited by the employee's expected annual accrual. A minimum of 120 hours
70 MUST be in an employee's PTO bank at the time of an election.
71
72 THEREFORE, be it resolved by the St. Croix County Board of Supervisors that the St.
73 Croix County Human Resources Policies and Procedures Handbook be amended as stated above.
Legal—Fiscal—Administrative Approvals:
Legal Note:
Fiscal Impact: Approval of this resolution will prevent employees from electing a PTO payout.
Because of the IRS matter, this would result in about$150,000 of potential savings
to the County in the form of IRS fines and calculation of withholding taxes, if the IRS
is correct in their position.
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11/18/15 Administration Committee APPROVED
......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ..........
RESULT: APPROVED [UNANIMOUS]
MOVER: Roy Sjoberg, Supervisor
SECONDER: Ron Kiesler, Vice Chair
AYES: Schachtner, Sjoberg, Berke, Kiesler, Achterhof
Vote Confirmation.
htner,5u 11/23
S
SL Croix County Board of Supervisors Action:
Roll Call -Vote Requirement—
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RESULT: ADOPTED AS AMENDED [UNANIMOUS]
MOVER: Travis Schachtner, Supervisor
SECONDER: Jill Ann Berke, Supervisor
AYES: Schachtner, Ring, Babbitt, Novotny, Sjoberg, Koch, Nelson, Berke, Ostness,
Larson, Hansen, Kiesler, Brinkman, Peterson, Anderson, Leibfried, Peavey
ABSENT: Chris Kilber, Judy Achterhof
This Resolution was Adopted as Amended by the St. Croix County Board of Supervisors on December 1, 2015
Cindy Campbell, County Clerk