03-P-042 Suggestion Award Earnings Codes
|DATE:||May 14, 2003|
|SUBJECT:||Suggestion Award Earnings Codes|
|EFFECTIVE DATE:||May 1, 2003|
|SUMMARY:||New Suggestion Award SHARP Earnings Codes|
Senate Bill 429 of the 2002 Legislative Session required state agencies to establish and administer an Employee Suggestion Program through which state employees submit suggestions for cost reductions in their respective agency through increased efficiencies or other economies or savings in the operations of the state agency.
House Bill 2369 of the 2003 Legislative Session amended the suggestion award requirements to allow payment of an innovation suggestion award upon adoption of the employee suggestion by the agency. This innovation suggestion award will be in the amount of 2.5% of the estimated cost reduction, as certified by the agency's chief fiscal officer and the agency appointing authority, up to a maximum of $3,500. Each employee with an adopted suggestion would also be paid an employee suggestion bonus. This bonus amount would be the difference between the innovation suggestion award received by the employee and 10% of the documented cost reduction during the first 12 months after implementation of the suggestion, as documented to the division of the budget, up to a maximum employee suggestion bonus of $37,500.
Guidelines have also been established to allow agencies to award a Kansas Savings Incentive Program (KSIP) bonus payment, not to exceed $3,500, to employees whose suggestions are implemented, but do not result in a cost reduction for their agency.
All awards given under the Employee Suggestion Program are nondiscretionary which means the award must be included in the employee's regular rate for calculating overtime compensation. Suggestion awards are included in taxable gross income and are subject to all applicable taxes and employer contributions. These include federal and state withholding taxes, OASDI, Medicare, Unemployment Compensation Insurance, Workers Compensation Insurance, and State Leave Assessment. These awards are not subject to deductions under the Kansas Public Employees Retirement System (KPERS).
The following earnings codes will be added to SHARP to accommodate suggestion awards:
|(Upon adoption of the suggestion, these two codes are used:)|
|ISA*||Award-Innovation EE Suggestion|
|IAO||Overtime-Award-Innovation EE Sug|
|(After 12 months have elapsed from the date of suggestion adoption, these codes are used depending on the actual cost reduction:)|
|ESN*||Award-EE Sugg-No cost reduction|
|* These codes should be entered in SHARP on the Bonus Pay page, NOT on the timesheet. The system will default the IAO, EPO, ENO earnings codes into the timesheet, if applicable.|
|Two earnings codes will be inactivated due to the legislation:|
Due to system constraints during the SHARP upgrade to V.8, please contact Accounts and Reports, Payroll Section, if an Innovation Suggestion Award must be paid prior to the pay period beginning June 8, 2003.
Complete Employee Suggestion Program guidelines, procedures, and sample forms are available on the Division of Personnel Services website located at: http://www.da.ks.gov/ps/subject/award/.
The Division of Accounts and Reports, Payroll Systems Team, is responsible for adding these earnings codes in the SHARP system. Regents' Institutions are responsible for ensuring these earnings codes are available on their individual systems.