Additional Pay Types Includable as Earnable Compensation

Changes take effect Sept. 10, 2019

Aug 23, 2019
  • Legislation

For Immediate Release: August 23, 2019
Contact: Marty Karlon, Public Information Officer, (603) 410-3594; [email protected]

CONCORD, NH – House Bill 468 (Chapter 214, Laws of 2019) adds annual attendance stipends or bonuses to the definition of earnable compensation for all members and also enables wages paid to full-time Community College System of New Hampshire (CCSNH) faculty for teaching summer courses to be included as earnable compensation. Both changes are effective September 10, 2019.

Earnable compensation is the compensation paid to a member that may be included when calculating a retirement benefit; members and employers pay NHRS contributions on earnable compensation. 

HB 468 specifies that for an annual attendance stipend or bonus to be considered earnable compensation, it must be paid pursuant to a collective bargaining agreement, personnel policy, or other agreement applicable to substantially all employees and the amount of which is determined by reference to the amount of sick days an employee used in the calendar or fiscal year.  Under current law, such cash awards are not treated as earnable compensation.  

Current law also excludes wages paid to community college faculty for instructional activities provided outside their academic year contract period.

The bill was signed by the Governor on July 12, 2019.

Frequently Asked Questions

Is HB 468 retroactive?

No; any attendance-based compensation paid prior to the effective date should not be reported as earnable compensation.

How does HB 468 affect attendance incentives that award additional time off, as opposed to a cash incentive?

HB 468 pertains to cash bonuses or stipends. If additional time off is awarded as an attendance bonus it is considered to be vacation time. If this time off is taken, it is reportable as base pay. However, if the additional time off is not taken and is subsequently paid out, it is pay for unused vacation time, which is only reportable as earnable compensation for members vested prior to January 1, 2012. 

Are wages for teaching summer courses in the community college system considered earnable compensation for all members, such as K-12 teachers or public safety personnel who also work as part-time adjunct faculty?

No. HB 468 specifies that summer wages for instructional activities are earnable compensation for full-time CCSNH faculty only. (Note: No compensation earned as a part-time adjunct instructor for the community college system by active NHRS members who work full-time for another employer is reportable as earnable compensation.) 

How should employers report these pay types?

Attendance stipends or bonuses and summer adjunct wages should be reported as base compensation for members vested prior to January 1, 2012, and reported as compensation over base for all other members.  

The law says annual attendance stipends or bonuses are earnable compensation if they are paid pursuant to a collective bargaining agreement, personnel policy, or other agreement “applicable to substantially all employees.” In cases where an employer has different contract provisions with different bargaining units or groups of similarly situated employees (i.e. some bargaining units or groups are eligible for an attendance bonus and some are not), would these payments be earnable compensation?

Yes, as long as the attendance stipend or bonus is available to all members of a respective bargaining unit or group of similarly situated employees. The intent of the law is to prevent attendance bonuses paid to individuals or small groups on a selective or arbitrary basis from being included as earnable compensation. 

Does HB 468 impact how payouts for unused sick time are treated?

No. Changes made to the law in 2011 excluded payouts for unused sick time from the definition of earnable compensation for members who were not vested prior to January 1, 2012. This provision has not changed.  Pay for unused sick time remains earnable compensation for members who were vested prior to January 1, 2012.

Additional resources

Text of HB 468: http://gencourt.state.nh.us/bill_status/billText.aspx?sy=2019&id=760&txtFormat=pdf&v=current

Earnable compensation chart: 

Updated statutory interpretive memo regarding “Additional Compensation for Non-abuse of Sick Time, Perfect Attendance, and Similar Bonus leave Programs”: 
https://www.nhrs.org/docs/default-source/interpretive-memos/im-2015-4.pdf

About NHRS

NHRS provides retirement, disability, and death benefits to its eligible members and their beneficiaries.  The State of New Hampshire and nearly 470 local government employers participate in NHRS for their employees, teachers, firefighters, and police officers.  NHRS has approximately 48,000 active members and 37,000 benefit recipients. NHRS administers a defined benefit plan qualified as a tax-exempt entity under sections 401(a) and 501(a) of the Internal Revenue Code. 

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