TN 18 (08-12)

RS 02505.025 Special Wage Payment (SWP)

Employers sometimes make payments to employees during periods of absence from work such as vacation pay, sick pay, etc., or make current payment for work previously done such as deferred payments, or make extra payments as a reward for good work such as bonuses. We refer to these as special wage payments.

The nature and purpose of SWPs are such that these payments may not be earnings or, if earnings, they may be earnings for periods different from those in which they were paid.

When encountering a SWP, consider whether:

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  Payment is wages for Earnings Test purposes or excluded from earnings such as sick pay discussed in RS 01402.090, or retirement pay in RS 01402.320 through RS 01402.326, or payments on account of retirement in RS 02505.045.

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  Nature of the payment requires allocation to a special period.

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  Employer made the payment at the time of or after the employment relationship terminated, follow RS 02505.030.

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  Employer made the payment before the employment relationship terminated, follow RS 02505.030.

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  Treatment of earnings of certain special occupational groups, follow RS 02505.160 through RS 02505.185.

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  For deferred compensation, see RS 01401.060 through RS 01401.090, and RS 01505.031