As the largest transit worker political action committee (PAC) in the United States, the Amalgamated Transit Union Committee on Political Education (ATU-COPE) is the voice of transit workers, school bus employees and over-the-road bus workers at all levels of government.

Since by law union dues cannot be used to fund political campaigns, voluntary contributions from ATU members* to ATU-COPE are used to help elect pro-labor, pro-transit candidates for local, state and federal office. Once the election is over, ATU-COPE works closely with the officials we helped elect to make sure that our members’ interests are well-represented.

Recent ATU-COPE Accomplishments

• Preserved transit worker collective bargaining and job rights in the recently-passed federal highway and transit legislation.
• Secured federal funding for maintenance training program for transit workers.
• Supported successful ballot initiatives to increase transit funding in Seattle, California, Minnesota and numerous other cities and states across the U.S.
• Defeated so-called "Taxpayer Bill of Rights" (or TABOR) initiatives that would have limited funding for crucial public services, including transit and school transportation, in multiple states.

Supplemental wages are compensation paid in addition to an employee's regular wages. They include, but are not limited to, bonuses, commissions, overtime pay, payments for accumulated sick leave, severance pay, awards, prizes, back pay, retroactive pay increases, and payments for nondeductible moving expenses. Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. How you withhold on supplemental wages depends on whether the supplemental payment is identified as a separate payment from regular wages.

By this definition longevity and the sick pay incentive are considered supplemental wages.  The attendance incentive quarterly payment can be handled in two ways:

Supplemental wages combined with regular wages.   If you pay supplemental wages with regular wages but do not specify the amount of each, withhold federal income tax as if the total were a single payment for a regular payroll period.

Supplemental wages identified separately from regular wages.   If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold income tax from your employee's regular wages.

TO ATU MEMBERS:

SUBJECT: LUMP SUM SUPPLEMENTAL WAGE PAYMENTS

DATE:   April 19, 2009

As you may be aware, there have been inquiries to the Finance/ Payroll Department from ATU members about a recent change in tax withholding procedures of lump sum supplemental wage payments for such benefits as tool allowances, attendance incentives, longevity pay, etc. 

According to IRS regulations these wages are considered to be supplemental as they are paid in addition to an employee’s regular wages.  To comply with IRS regulations the PeopleSoft payroll system taxes supplemental wages identified separately from regular wages at a rate of 25% federal tax withholding.  There are no exceptions or other % allowed.

Supplemental wage payments included in employees’ normal regular wages and specified amounts separately, are subject to federal tax withholding at 25% as well.  These wages would be identified as supplemental even if paid in a single check.

Based on the above, the Finance/ Payroll Department, is highly recommending that any lump sum supplemental wage payments be included in employee’s normal regular wages effective immediately, rather than be payable in separate checks.  To cut manual checks in the new system requires a separate payroll to be run and is a very tedious process.

ATU is agreeable to including supplemental wage payments in employee’s normal regular paychecks and not on a separate check.

Signed:

_______________________   _________

Peter Schiraldi                           Date

ATU Pres.

______________________    __________

Thomas H. Behan                      Date

Director of Employee Relations