HUMAN RESOURCE POLICY

Layoff Benefits for Employees Eligible for Retirement

Because DHRM has recently received several questions on this topic, we thought it would be helpful to provide the following guidance. 

1. Severance – The employee may opt to NOT retire and received the standard severance payments and layoff benefits
   • The employee may receive severance payments for the allotted number of weeks or until recalled or re-employed by a state agency.
   • The agency will continue to make the state contribution toward the employee’s healthcare premium under the active employee group, and the employee will continue to be covered by group life insurance for up to 12 months.
   • The employee retains recall and preferential hiring rights for 12 months.
2. Enhanced retirement:
   • The value of all of the severance benefits (severance payments, heath insurance contribution, and group life insurance) is converted to retirement credit.
   • The employee MUST retire on the first of the month following the effective date of layoff. Employee MAY NOT defer the retirement effective date.
   • Employees should always be referred to VRS to ensure that retirement calculation estimates are accurate before making decisions.
     
     Example
     • Employee is laid off on 5/9/08 and elects to take enhanced retirement. Employee MUST retire on 6/1/08.
     • If the agency offers an appropriate placement effective 5/29/08 and the employee declines the placement, the employee is no longer eligible for enhanced retirement.
3. Severance and regular service retirement:
• The employee may retire under regular service retirement on the first day of the month following the effective date of layoff or at any time within 12 months of the layoff effective date.
• The employee may receive the severance payments for the allotted number of weeks or until the effective date of retirement, whichever occurs sooner.
• The agency will continue to make the state contribution toward the employee’s healthcare premium under the active employee group, and the employee will continue to be covered by group life insurance for up to 12 months. The employee must enroll in the retiree healthcare coverage at the end of the 12 months of active coverage under layoff.
• Employees should always be referred to VRS to ensure that retirement calculation estimates are accurate before making decisions.
  
  Examples
  • Employee is laid off effective 5/9/08 and elects to take regular service retirement on 7/1/08. The employee may receive severance benefits from 5/10/08 through 6/30/08 and health and life insurance coverage (paying his/her portion) through 5/9/09.
  • Employee is also subject to recall until the retirement date. If the agency offers an appropriate placement option effective 6/15/08 and the employee declines the placement, (s)he is no longer eligible for severance benefits or health and life insurance coverage. Severance ends effective 6/15/08.
  • If, for example, the employee is eligible for 36 weeks of severance benefits, opts to retire after the 36 weeks, and does not decline an appropriate placement option during this period, (s)he will receive the full severance amount. Health and life insurance benefits continue until 12 months after the effective date of layoff. The employee remains subject to recall for up to 12 months from the layoff effective date or until (s)he retires, whichever is first.

It is important to inform all employees considering these options that, if an appropriate placement option (a placement that does not require the employee to relocate or take a reduction in pay) is offered by the agency prior to the effective date of the (enhanced or regular) retirement, the employee loses severance benefits if (s)he declines the placement.  Agencies are obligated to offer any appropriate placement options until the effective date of retirement.

Enhanced Retirement Benefits and Future Retirements

Recently, DHRM has received several inquiries regarding the following scenario:

An employee was laid off, opted to convert his severance to enhanced retirement, and retired.  Several years later, the employee decided to return to full-time employment.  He applied for, and was offered, a classified position at the same agency. 

Question:  “What happens when he decides to retire again?  Will his benefits be reduced?”

Answer:  The additional years he received under WTA will not be added to the accumulated service when he retires the second time.  Retirement calculations will be based on the length of time he has actually worked (plus any purchased service.)  According to Policy 1.57:

I-9 Compliance

DHRM has recently received numerous questions related to the completion and maintenance of I-9 forms.  Specifically, agencies have sought guidance regarding the timeliness of the completion of the forms and the methods used to correct information originally provided by employees.

Timeliness

Employees are required to complete Section I of the form “at the time of hire which is the actual beginning of employment.”  Employers are required to complete Section II “within three business days of the date employment begins.”  Because these terms are not clearly defined by the Federal Government, and because state pay periods may fall on a weekend but the employee is not required to report to work until Monday, Kaufman & Canoles has advised that the first day of work is the first day that the employee is scheduled to report to work.  

Correcting I-9 Forms

There are distinctions in the types of errors that may be corrected by employers while still comporting with good faith efforts to comply with the law (United States Immigration Law Handbook:  A guide for Foreign Businesses, Investors and Professionals published by McCandlish Kaine’s Immigration Practice Group).    

Technical or procedural errors vs. substantive errors

Examples of technical or procedural errors that may be corrected within a 10 day period are:

• The employee failing to date Section 1 of the application;
• The employee failing to complete maiden name, address, or birth date in Section 1;
• The employee failing to date Section 2; and
• The employee failing to complete the date of hire in the middle attestation of Section 2.
           

• Failure of employee to complete Section 1 attesting to citizenship or immigration status
• Failure of employee to sign Section 1
• Failure of employer to review and document either a List A or a List B or List C document in Section 2.
• Failure of Employer to sign Section 2.

If an I-9 has so many errors that it needs to be completely re-done, it is appropriate to have the employee/employer complete a new form within three days of hire.  The I-9 completion dates should reflect the actual dates of completion. 

Agencies are strongly encouraged to contact Heather Mullen or Radlyn Mendoza (Kaufman & Canoles) at (757) 624-3000 for specific guidance and legal advice.   

Guidance on Calculating Military Pay Supplements

Leave and Earnings Statements (LES’s) for employees who are on military leave and receiving the military pay supplements may change as the employees are relocated and reassigned.  LES changes can mean that the supplement amount needs to increase or decrease.  If an LES is not submitted in a timely manner, incorrect payment may result. 

Agencies should adhere to the following guidance when calculating and administering military pay supplements:

• Emphasize to employees and those handling their affairs while they are on leave the importance of timely submission of LES’s.
• Use the daily rate based on the number of days in the pay period to calculate supplement amounts.
• Make supplement pay adjustments retroactively as necessary to be consistent with effective dates of LES changes.
• If an employee’s supplement has been overpaid, notify him/her and:
  • request immediate repayment; AND/OR
  • recoup the overpayment through subsequent supplements until the overage is recovered.
• If an employee’s supplement has been underpaid, notify him/her and pay the additional amount as soon as possible.

Leave for Bereavement and Attendance at Funerals

In response to a number of recent inquiries from employees and managers, we would like to remind agencies that the Commonwealth’s leave policies provide bereavement leave as follows:

• Annual Leave may be used for any personal or family-related absence. While many employees refer to this leave category as "vacation leave," it is designed to accommodate any type of absence provided the employee gives reasonable notice and his/her supervisor approves the absence.
• The Virginia Sickness and Disability Program includes a provision for "Family/Personal" leave that may be taken at the discretion of the employee for any purpose (family, illness, to attend a funeral, or other personal needs, etc.) provided the employee gives reasonable notice and his/her supervisor approves the absence.
• Employees who chose to remain in the Traditional Sick Leave program may use up to 48 hours of their accrued sick leave for the death of an immediate family member per leave year.

Minimum Wage

In May 2007, the Fair Labor Standards Act (FLSA) was amended to increase the federal minimum wage in three steps: to $5.85 per hour effective July 24, 2007; to $6.55 per hour effective July 24, 2008; and to $7.25 per hour effective July 24, 2009.  Agencies are responsible for ensuring that employees who are covered by the minimum wage provisions are paid no less than $6.55 per hour beginning July 24, 2008.  Agencies with employees who qualify for a sub-minimum wage must ensure that payments beginning July 24, 2008 continue to comply with FLSA requirements (e.g., 85% of the minimum wage). 

Policy Committee Update

The Policy Committee will resume activities in May and will focus its initial efforts on revisions to records management policies.  Details will be available soon.