 NATIONAL CONTRACT UPDATE  April 21, 2003 In previous separate correspondence, Carmen General President R. A. Johnson and IP Scardelletti informed you that we were preparing a guide for members to calculate retroactive pay under the National Agreements. Soon after, a dispute arose with the carriers as to whether the Harris Award contemplated payment of one day’s retroactivity from June 30, 2002 to July 1, 2002. Although the amount in question is minimal, we have submitted the dispute back to the arbitrator for resolution. We do not have an answer yet. Inasmuch as the back pay checks should be issued in the near future, we do not want to delay the circulation of this guide any longer. The guide includes the one day’s pay, and there is a footnote explaining what to do if the arbitrator rules against us. As you will see, the nature of the Award makes the calculation of the retroactive payment fairly complicated. To come up with the exact amount owed, a member will have to have precise back pay records as to hours worked during various time periods. Guide for Calculating Retroactive Pay Under the Carmen and Clerical National Agreements Take the hourly rate as of December 31, 2000. For purposes of this example, assume that rate was \$18.50 an hour. Add \$.27 an hour, bringing the hourly rate to \$18.77. We will call this rate the starting base rate. Effective June 30, 2002, increase the rate by 2.5%, making the new hourly rate \$19.24. Subtract the starting base rate from the June 30 rate and multiply the result by the number of hours worked on June 30, 2002 at the appropriate straight time or overtime rate. Assuming the employee worked 8 straight time hours on June 30, 2002, the first component of the retroactive pay will be \$19.24 minus \$18.77, or \$.47, multiplied by 8, for a total of \$3.76. Effective July 1, 2002, increase the June 30 rate by 3.5%. In this example, the \$19.24 rate would increase to \$19.91. Subtract the starting base rate (\$18.77) from the July 1 rate (\$19.91), and multiply the result (\$1.14) by all hours worked beginning July 1, 2002 through the date that pay rates are actually increased on your carrier. For purposes of this example, assume the new pay rates are instituted May 1, 2003. Multiply the \$1.14 by all hours worked during the period July 1, 2002 through April 30, 2003 at the appropriate straight time or overtime rate. Assuming an employee worked 174 straight time hours each of those ten months and did not work any overtime, the retroactive pay for that period would be \$1.14 multiplied by 1740 for a total of \$1,983.60. Add the \$3.76 from the paragraph above, for a total gross retroactive pay of \$1987.36. From this amount, deduct retroactive health contributions due for each month that the carrier paid a premium on your behalf from July 2001 through April 2003. In this example, the employee worked 174 straight time hours each month, so an employee contribution was due each month. From July 2001 through June 2002, that would be twelve months at \$33.39 per month, for a total of \$400.68. For July 2002 through April 2003, that would be ten months at \$81.18 per month, for a total of \$811.80. The total for the entire period would be \$400.68 plus \$811.80, for a total of \$1,212.48. Deduct this amount from the total gross retroactive pay. In this example, deduct \$1,212.48 from \$1,987.36, resulting in a net retroactive payment of \$774.88. From this amount, the COLAs that were discontinued effective June 30, 2002 must be deducted. To do this, subtract out the 21 cents an hour in discontinued COLA from July 1, 2002 through December 31, 2002 and the 32 cents an hour in discontinued COLA from January 1, 2003 through April 30, 2003. Again assuming the employee worked 174 straight time hours each month and no overtime during this period, the deduction would total \$.21 multiplied by 6 multiplied by 174, or \$219.24, plus \$.32 multiplied by 4 multiplied by 174, or \$222.72, for a total COLA deduction of \$441.96. Subtract the COLA deduction from the previous net retroactive figure to arrive at the actual pre-tax retroactive payment due the employee. In this example, subtract \$441.96 from \$774.88, to arrive at a retroactive payment of \$332.92 due the employee. 1. The carriers are disputing whether they owe this one day of retroactivity. In their view, the arbitrator indicated June 30 for the 2.5% GWI and July 1 for the 3.5% GWI for purposes of compounding only. We have submitted the dispute to Arbitrator Harris for resolution, and are awaiting a decision. If he sides with the carriers, simply ignore this paragraph and apply the 2.5% calculation on July 1. The difference in retroactive pay will be minimal. 2. A carrier is required to make a contribution when an employee receives seven days paid compensation in the previous month. Sick leave and supplemental sickness payments do not count as paid compensation; vacation, holiday, jury duty, bereavement leave, and other "time paid not worked" payments do count << return to news front