6510.02 - PAYMENT OF SALARY FOR BARGAINING UNIT EMPLOYEES

Defiance City School District

Bylaws & Policies

6510.02 - PAYMENT OF SALARY FOR BARGAINING UNIT EMPLOYEES
Payment Periods

The yearly salaries for each contractual year will be paid in one of two methods, at the employee's election, as provided for in the collective bargaining agreement:

Option (a):	Twenty-six (26) equal installments, payable every other Friday with the first pay period beginning the second Friday after the first work day of each school year.

Option (b):	Twenty (20) equal installments, payable on the schedule and in the amounts as if the employee had chosen option (a), with a twenty-first installment paid on the same schedule as if the employee had chosen option (a), but for a lump-sum amount including all of what would have been installments twenty-one (21) to twenty-six (26) under option (a).

Changes in the Internal Revenue Service (IRS) 409A regulation of deferred compensation require the District to give a notice letter and an election form to employees because both options (a) and (b) involve deferred compensation. As a result, the IRS requires the employees to file an election for deferred compensation form with the District or face significant costs in interest and penalty payments.

The District shall provide the notice letter and election form to current employees prior to the 2008-2009 contract year and to new employees starting after the beginning of the 2008-2009 contact year within thirty (30) days of hire. The election form shall be effective in perpetuity unless the employee files a new election form changing his/her payment method. The District shall also make the notice letter and election form available in the Treasurer's office for employees who wish to change their election as allowed by the collective bargaining agreement. Election forms shall be kept on file within the District.

The collective bargaining agreement allows employees to choose option (b) at any time prior to May 15^th. This policy, the 409A notice letter, and the 409A election form do not alter the terms or rights under the collective bargaining agreement. However, under the IRS regulations in 409A there are tax and penalty consequences to changes in deferred compensation schedules. Employees shall be given notice of the possible consequences in the 409A notice letter and election form.

SUPPLEMENTAL PAY SCHEDULE

Any person contracted for a supplemental position shall receive a lump sum payment at the conclusions of the activity for that school year.

Adopted 4/9/08