Memo PR2000-014 - Merger of Cycles O and M to the Monthly Payroll Cycle A

State of North Carolina

Office of the State Controller

James B. Hunt, Jr., Governor

Edward Renfrow, State Controller
Gwen Canady, Chief Deputy

September 13, 2000

M E M O R A N D U M

TO:	Chief Executive Officers (Central Payroll Agencies Only) Chief Fiscal Officers (Central Payroll Agencies Only)
FROM:	Edward Renfrow State Controller
SUBJECT:	Merger of Cycles O (Longevity) and M (Shift, Overtime, Holiday and On-call) to the Monthly Payroll Cycle A

The purpose of this memorandum is to announce completion of the project to merge the M (Shift, Overtime, Holiday and On-call) and O (Longevity) supplemental cycles to the monthly A cycle effective with the October payroll.

The decision to merge the mid-month supplemental pay cycles with the monthly pay cycle was based on requests issued to OSC by the Governor's Office as well as several central payroll agencies. These request were in direct response to employee complaints regarding the supplemental tax rates required on the Premium and Longevity pay cycles M and O of 28% in Federal Tax and 6% for NC Tax.

Merging Longevity (cycle O) and Premium (cycle M) pay with the Monthly cycle A will accommodate calculation of required taxes using the employee's current withholding allowance certificate instead of the maximum flat rate amount as stipulated for supplemental wage payments. Therefore, the month-end payroll, cycle A, will include payment of Longevity and Premium Pay for all eligible employees. The inclusion of the supplemental pay types into the monthly pay will result in a single direct deposit of pay for all affected employees. In addition, the legislative $500 bonus, which will be shown as an I cycle transmittal, will be included in the October cycle A (monthly) for all eligible employees. Agencies will have until the close of the monthly keying schedule to enter premium and bonus data.

OSC, working closely with the ITS application support staff, has made every effort to minimize the operational impact of the cycle merger. The processing of M and O cycle information or data will be transparent to the user thus minimizing the need for changes to existing data entry screens or processes. Simply stated there are no changes in how cycle A, M, and O data will be keyed by the respective units. However, there are several very important business rules that will impact payroll processing as a result of the cycle merger.

Effective October 3, 2000 (Start of keying period for the October monthly payroll):

1.	Premium Pay will now be entered under the same time schedule that is used for the Monthly Payrolls. Premium Pay updates for employees having a monthly cycle A master record will be entered into the system as before, under cycle M. Premium Pay for employees on the Temporary (cycle C), Student (cycle K) and Contract (cycle N) Mid-Month payroll cycles will be entered as split records by each agency. This update process will also provide these employees with a potential tax savings. These split records MUST be changed each pay cycle by your agency.
2.	The one-time legislative bonus of $500 will be included in the October Monthly payroll. Changes or updates will be handled using the standard procedures for Bonus (cycle I) or special pay.
3.	The Split method is being utilized to combine the other pay cycles I, M and O into the Monthly pay cycle A. Currently, the payroll system is limited to a maximum of (30) splits (any combination of cycle A, M, O & I) per employee record. It is imperative that your agency check to ensure that the number of split records for each employee does not exceed a total of (30) for all cycles including A, M, O, and I. In addition, you must check to see that no two splits are identical. If an employee has more than (30) splits or two splits, which are identical, the employee's record WILL NOT be processed.
4.	Separate transmittals for cycles A, M, and O will be provided each month, as before. An additional I cycle transmittal will also be provided for the one-time bonus to be issued in October.
5.	Individual gross pay amounts for cycle A, I, M, and O will be itemized on the pay stub for verification purposes.

It is imperative that employee and agency representatives contact OSC immediately if additional information or clarification is required regarding this memorandum. Please direct all requests in writing to: DWaugh@controller.osc.state.nc.us or RFarmer@controller.osc.state.nc.us.

cc:	Payroll Officers-Central Payroll Agencies
	Tom Barbour, Office of State Personnel
	Mollie Doll, OSP, For Distribution to HR Managers
	Paula Schubert, President SEANC
	Linda Polvich, Governor's Office

	Central Payroll - Roger Farmer, CPA, Manager
MAILING ADDRESS 1410 Mail Service Center Raleigh, NC 27699-1410	Telephone: (919) 981-5545 Fax Number: (919) 981-5570 State Courier: 56-50-10 Website: www.osc.state.nc.us/OSC/	LOCATION 3512 Bush Street Raleigh, NC
	An Equal Opportunity/Affirmative Action/Americans With Disabilities Employer

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