Page 42 - AASBO The EDGE Summer 2022

SPRING CONFERENCE WRAP-UP

BY DON HARRIS
Mona Rodriguez Cheryl White
How, When to Provide Total Compensation Statements

AASBO members who are responsible for compiling total of a total compensation statement is to report dollars, so it
compensation statements for employees under the terms of could be interpreted to report the dollar value of paid leave
a new law probably have plenty of questions. Fortunately, compensated to the employee. Other legal interpretations seem
two experts provided the answers to many of the frequently to require reporting the paid leave units. AASBO members are
asked questions during a breakout session at the AASBO advised to ensure that your district has internal discussions and
Spring Conference in Laughlin, Nevada. Cheryl White, consults with legal counsel to determine your reporting method
Heinfeld Meech and Co., and Mona Rodriguez, Peoria Unified and be consistent with your method.
School District, explained that Arizona Revised Statute now
requires the governing board of a school district to provide its Also unclear is whether to furnish total compensation statements
employees a total compensation statement that is broken down to employees at the beginning or end of fiscal year. Although
by category or benefit for each fiscal year. the law does not specify, best practice recommendation is to
provide them at the end of the fiscal year. The statute does not
A total compensation statement is a way for employers to impose a deadline, but it was recommended furnishing total
demonstrate the value of an employee’s total compensation, compensation statements to employees as soon as possible
which includes wages earned for the work performed and the after the last posted payroll of the fiscal year.
employer’s cost to provide benefits to the employee and their
dependents. The statute is also silent on whether the statements can be
provided in hard copy or electronically. AASBO members
Information that must be reported includes the employee’s base were advised to use either method as long as the statement
salary and any additional pay, any medical benefits and the includes, at minimum, the components required in statute.
value of any employer-paid portions of plan premiums, such Above all – document your procedures!
as medical, dental and vision coverage. The report must also
include employer-paid state retirement contributions and other These statements must be furnished to all employees, including
voluntary employer-paid retirement plans and the employer part-timers, if they received any kind of pay or benefits from
share of Social Security, Medicare and other required benefits, the district during the fiscal year. Terminated employees who
paid leave, life insurance and any fringe benefit stipends. received any pay or benefit from the district during the fiscal
year must be given a total compensation statement as well. It’s
Hopefully, the list of requirements is clear, but White and up to the district whether to furnish it at the time an employee
Rodriguez raised a question: “What is not clear?” terminates or when all the other statements are provided.

The statute itself only dictates that a total compensation It’s important for the district to document that it complied
statement must be furnished and the minimum components with the law. Some strategies the presenters recommended:
that are required to be included. But, there are many questions document method of disbursement, have employees sign an
regarding how to comply with this new law. For example: acknowledgement that they received a statement, and maintain
What is considered base salary and additional pay? Include copies of what is published or provided. Once again: Document
all wages paid to an employee, plus stipends, extra duty and your decisions!
performance pay.
They also touched on setting up compensation statements.
It is important to note that gross pay, not net pay, must be You should define compensation statement categories;
reported on the total compensation statement. assign categories to position funding lines; assign categories
to master deductions; set up the compensation statement
The question on what is required to be reported regarding paid content and format; generate compensation statements; review
leave raises two more questions. Are you reporting the value of compensation statement summary information; and print
the employee’s available leave balance, and are you reporting compensation statements.
the leave balance in units or dollars?
And finally: Document, document, document.
The answer, according to White and Rodriguez: It depends on Cheryl White can be reached at: cheryl.white@hm.cpa
how the statute is interpreted. They explained that the purpose Mona Rodriguez can be reached at: mrodriguez@pusd11.net

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42 THE EDGE SUMMER 2022