Part of administering a LAGERS plan is submitting a monthly wage report on ECLIPSE for covered employees. This monthly report, due on the twelfth of each month, is used to determine the contributions needed to fund your organization’s defined benefit plan.
A common question LAGERS employer services specialists receive involves understanding the difference between reimbursements and allowances on a wage report.
Allowances
Allowances are recurring payments provided to your organization’s employees. These could include regular stipends for commuting, phone allowances, or uniform and clothing allowances. Because they are ongoing and generally part of an employee’s compensation package, allowances are considered reportable compensation.
Allowances should be included in your monthly wage report.
Other forms of recurring compensation that function like wages that should be included on your monthly wage report may include:
- Gross wages, including overtime, recurring bonuses, and paid time off (vacation, sick leave, compensatory time, etc.) These wages should be reported to LAGERS for the month paid, not the month earned.
- Lump sum payments, but only if they have been paid in the past or will be paid in more than one reporting month, not payroll period.
- Fees that are considered salary.
- Employee payments made to a deferred compensation plan.
Reimbursements
Reimbursements are payments made to employees to cover one-time expenses incurred while performing their job duties. Examples might include travel costs, meal expenses, work equipment, or office supplies. These payments are typically made after expenses occur and are not considered reportable compensation.
Do not include reimbursements on your monthly wage report.
Other payments that may show up on payroll but are not considered reportable salary for LAGERS include:
- Employer payments for insurance premiums
- Reimbursements for expenses incurred by an employee
- One-time lump sum payments
- Salary or benefits paid for any month the employee was on, worker’s compensation, military leave, educational leave
- Short-term disability payments, whether administered by the employer or a third party
Wage reporting exists to keep member records accurate and to make sure that your employees’ retirement benefits are calculated correctly when they are ready to retire. If you are unsure how to classify a payment, please reach out to your employer services specialist.
More information on what should and should not be reported to LAGERS is available in the Administrative Handbook, on the molagers.org employers news section, and online.
