Title of Rule: Treatment of cash payments made in lieu of unused leave.

Purpose: To advise members of teachers retirement system (TRS) Plan 1 what compensation can be included in calculating their retirement benefit.

Statutory Authority for Adoption: RCW 41.50.050.

Statute Being Implemented: RCW 41.32.010 (10)(a).

Summary: This WAC advises TRS Plan 1 members that compensation in lieu of unused annual leave may be considered earnable compensation for Plan 1 members in their retirement benefit calculations under RCW 41.32.010 (10)(a). It advises members how average final compensation is calculated when unused leave is included in the calculation.

Reasons Supporting Proposal: The WAC refers to WAC 415-112-410 which has been repealed and replaced with WAC 415-112-4605. The WAC should be corrected to advise members, employers and other interested parties of the accurate, updated WAC reference.

Name of Agency Personnel Responsible for Drafting: Elyette Weinstein, 6835 Capitol Boulevard, Tumwater, (360) 664-7307; Implementation and Enforcement: Margaret Wimmer, 6835 Capitol Boulevard, Tumwater, (360) 664-7044.

Name of Proponent: Department of Retirement Systems, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: This WAC advises TRS Plan 1 members that cash compensation in lieu of unused annual leave may be considered earnable compensation for Plan 1 member retirement benefit calculations under RCW 41.32.010 (10)(a). It advises members how average final compensation is calculated when unused annual leave is included in the calculation.

The proposed change involves updating this rule so that it no longer refers to a repealed WAC and instead, cross references the current recodified WAC number. This technical change will provide clarification and avoid confusion.

Proposal Changes the Following Existing Rules: This WAC advises TRS Plan 1 members that cash compensation in lieu of unused annual leave may be considered earnable compensation for Plan 1 member retirement benefit calculations under RCW 41.32.010 (10)(a). It advises members how average final compensation is calculated when unused annual leave is included in the calculation.

The proposed change involves updating this rule so that it no longer refers to repealed WAC 415-112-410 and instead, cross references current recodified WAC 415-112-4605. This technical change will provide clarification and avoid confusion.

March 28, 2000

Elyette M. Weinstein

Rules Coordinator

OTS-3930.1

AMENDATORY SECTION(Amending WSR 94-23-049, filed 11/10/94, effective 12/11/94)

WAC 415-112-415
Treatment of cash payments made in lieu of unused leave -- First-in-first-out accounting method for determining when leave earned -- Forms of leave deemed excess compensation -- Conversions.

(1) Cash compensation in lieu of unused annual leave may be considered earnable compensation for Plan I members subject to the provisions of RCW 41.32.010 (10)(a) and WAC ((415-112-410)) 415-112-4605.      Employers may not limit the inclusion of cash compensation paid in lieu of unused annual leave as compensation earnable in conflict with RCW 41.32.010 (10)(a).      Provisions of collective bargaining agreements, employment and administrative policies or other rules applied by an employer that conflict with RCW 41.32.010 (10)(a) and rules adopted thereunder are without legal effect.

(2) When an employer provides cash compensation in lieu of unused annual leave, the department applies a first-in-first-out accounting method to determine when the compensated leave was earned and when or whether the leave was used or cashed out, unless the employer has in place a regulation, charter provision, ordinance, collective bargaining agreement, or other comparable written policy statement which clearly delineates when the cashed out leave was accrued, or a different method of accounting for the accrual and use of leave, and, if applicable, compensation for unused leave and the same such method is consistently applied in each instance and for all purposes.

Any employer's policy which is not consistent for all purposes which is contained in a regularly negotiated labor agreement in effect on the effective date of this section will be honored until the expiration date of the agreement not including any extensions at which time it will be brought into compliance with this section.      Any employer's policy which is not consistent for all purposes which is established by the employer shall be brought into compliance within sixty days of the effective date of this section.      In the event an employer fails to come into full compliance with this section by the dates established herein, the department will treat cashed out leave on the same basis as the employer has established for using leave.

(3) A cash out of leave which is not annual leave as defined under WAC 415-112-015, shall be treated by the department as "any other form of leave" under RCW 41.50.150(2).      The department shall bill the employer for any such leave cash out as excess compensation under RCW 41.50.150.

(4) For purposes of determining average final compensation and excess compensation, hours of leave earned by a member shall be considered for all purposes in the form in which it was earned.      The department shall disregard any conversion of leave by an employer of one form to another and bill the employer for the amount converted as excess compensation pursuant to RCW 41.50.150.

[Statutory Authority: RCW 41.50.050.      94-23-049, § 415-112-415, filed 11/10/94, effective 12/11/94.      Statutory Authority: RCW 41.50.050 and Bowles v. Retirement Systems, 121 Wn.2d 52 (1993).      94-11-009, § 415-112-415, filed 5/5/94, effective 6/5/94.      Statutory Authority: RCW 41.32.010(11) and 41.32.160.      87-17-060 (Order DRS 87-07), § 415-112-415, filed 8/19/87.]

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