Montana Public Employees Association

Lump-Sum Pay Increase Awaits Ratified Agreements

MPEA has received a number of questions from state bargaining unit members about the receipt and taxation of the $450 one-time-only pay adjustment negotiated and ratified by members of state bargaining chapters.

The $450 lump-sum payment is for full time employees whose base salary is $45,000 per year or less. Part time employees who earn $21.635 per hour or less and regularly work 20 hours a week or more are eligible for $225.

The Department of Administration will include the lump-sum payments on the paychecks that are to be distributed Wednesday, July 29. This legislative session’s pay bill, HB13, like most pay bills is recent years, contains a provision that MPEA members and other organized state employees must have a ratified agreement before receiving the payment. At this point in time, nearly all state collective bargaining agreements are being negotiated. When a bargaining chapter has completed negotiations and an agreement has been ratified, members will receive their lump sum payment.

The amount received will have federal taxes, state taxes, social security and Medicare, and the retirement contribution taken out. The actual dollar increase in the check that has the lump-sum payment will vary by individual because of the amount of federal income tax withheld.

The IRS considers these lump-sum payments to be “supplemental earnings” therefore subject to withholding regulations. State statute also provides that “supplemental earnings” are subject to state retirement withholding.

Got Twitter?!?!?

At MPEA we are always interested in better and faster ways to communicate with our membership and partners in the labor movement. We have set up a Twitter account that we’ll use for updates on a wide range of issues from the Legislature to local bargaining unit updates. You can ‘follow’ us by adding us on your Twitter at http://twitter.com/MPEA or sending a non work email to quint@mympea.org to receive an invitation to follow. Twitter is a free service and only requires an account. We look forward to seeing you and giving you updates and news fast!

VEBA: Health Reimbursement Accounts

Want to learn about how health reimbursement accounts in Montana work? Click here for the Voluntary Employees’ Beneficiary Associate (VEBA) Web site. This may be the answer to some of your concerns about the cost of health care and its relation to your retirement.

MPEA is an independent public employee union established on the principle that all dues collected should remain in Montana to benefit those who pay the dues. MPEA became a union in 1973 with the passage of the Montana Collective Bargaining Act. The Association provides the full time organizational structure and staffing that allows public employees to join together to represent their issues in collective bargaining, lobbying the legislature and representation before the courts.