Payments made to employees resulting from a settlement agreement negotiated
between an employee, the employee's representative, the department and Employee
and Labor Relations Consultants (on behalf of the University) CANNOT be
processed until the written agreement has been signed by the parties involved.
All payments must be made in accordance with the policies described in the University of California Accounting Manual. The two chapters relevant to these particular transactions are:
Monetary settlements that provide lump sum payments considered as punitive damages are paid through PAC and not through the Payroll System. The language typically used in the settlement agreement for this type of payment is similar to the following example:
Within thirty (30) days from the date of execution of this Agreement, the University shall pay (name of employee) the sum of forty thousand dollars ($40,000.00) on account of (name of employee) allegations of physical and emotional damages. The University shall not withhold any taxes from this settlement amount.
Lump Sum Payments in Lieu of Wages
Monetary settlements that provide lump sum payments in lieu of wages are subject to applicable federal and state taxes and are therefore paid through the Payroll System using the EDFT screen.
The DOS code used for settlements payments may vary based on whether the separation action is voluntary or involuntary and the circumstance of the settlement agreement. The following DOS Codes should only be used by departments after consultation with CHR, Employee Relations, Health System Human Resources or UCOP HR/Benefits.
| DOS | DESCRIPTION | USAGE |
| VTL | Voluntary Termination - Lump Sum | Settlement payments |
| ITL | Involuntary Termination - Lump Sum | Settlement payments |
(Refer to the Description of Service (DOS) Table for the derivation of pay
for these codes.)
DOS Codes No Longer Available For Use
The language typically used in the settlement agreement for this type of payment is similar to the following example:
The University agrees to pay, and _______ agrees to accept, the lump-sum amount of Ten Thousand Dollars and No Cents ($10,000.00). This amount is subject to the usual and customary, federal, state, income and employment taxes.
For lump sum payments (after consultation with the Employee Relations Consultant and/or Labor Relations Specialist in campus Human Resources, Health System Human Resources or UCOP HR/Benefits) the DOS code VTL or ITL should be used. In the comments section of the PAN, enter, "Lump sum payment in accordance with settlement agreement". The Employee Relations Consultant and/or Labor Relations Specialist in Campus Human Resources, Healthcare Human Resources or UCOP HR/Benefits who is assigned to the case must be copied as an additional recipient of the PAN. The PAN will serve as documentation that the payment has been processed within the time limits specified by the settlement agreement. A copy of the transacation must also be sent to Payroll Notification (PPPAY) only if the department is requesting a rush check.
There may be settlement agreements that are reached after the employee's record has been purged from the EDB. In these cases, the EDB preparer must process a hire transaction in EDB Entry/Update to reestablish the appointment and distribution as they were right before the employee’s separation. After the employee’s record is reestablished, the payroll preparer may process the payment using the EDFT screen.
The following is an example of a settlement agreement payment processed on the EDFT screen.
PPETFT0-E0967 Dept. Time Reporting 07/06/YY 15:50:52
05/17/YY 22:22:06 One Time Payment (EDFT) Userid: ABCDE
ID: 555666555 Name: PAYMENT,SETTLEMENT Emp Status: A
Pay End: 07/31/YY Check Date: 08/01/YY Pay Cycle: MO Page 1 of 1
E T D W
R Y U PerEnd S
C Seq LACFPS C P C Ttl DOS Amount MMDDYY P
00005 4 660500 19900 2 E 2 4724 VTL 04000.00 0731YY
Next Func: ID: 555666555 Name: SSN:
Seq No: Pay Cycle: MO Pay End: 0731YY
U0007 Update process complete
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F: 1-Help 2-Jump 5-CANCEL
F: 9-UPDATE
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In the comments section of the PAN enter, "Lump sum payment in accordance
with settlement agreement" and then add the Employee/Labor Relations Specialist
as an additional recipient of the PAN.
There are other payments that may be required in settlement agreements, and are subject to applicable federal and state taxes, and are therefore paid through the Payroll System using the EDFT screen.
As with the previously mentioned DOS codes, these may vary based on whether the separation action is voluntary or involuntary and the circumstance of the settlement agreement. The following DOS Codes should only be used by departments after consultation with CHR, Employee Relations, Health System Human Resources or UCOP HR/Benefits.
| DOS | DESCRIPTION | USAGE |
| VTS | Voluntary Termination - Severance | By agreement payments |
| ITS | Involuntary Termination - Severance | By agreement payments; for example, one month pay for each year worked |
| ITP | Pay in lieu of notice | Regular pay in lieu of notice |
In the comments section of the PAN, enter, "Severance payment in a
accordance with settlement agreement". The Employee Relations Consultant
and/or Labor Relations Specialist in Campus Human Resources, Healthcare Human
Resources or UCOP HR/Benefits who is assigned to the case must be copied as an
additional recipient of the PAN. The PAN will serve as documentation that the
payment has been processed within the time limits specified by the settlement
agreement. A copy of the transaction must also be sent to Payroll Notification
(PPPAY) only if the department is requesting a rush check.
Severance Payments in Monthly Increments
Severance agreements may also require pay in monthly increments. These payments are also subject to applicable federal and state taxes and are paid through the Payroll System using the EDAP screen.
As with the previously mentioned DOS codes, these may vary based on whether the separation action is voluntary or involuntary and the circumstance of the settlement agreement. The following DOS Codes should only be used by departments after consultation with CHR, Employee Relations, Health System Human Resources or UCOP HR/Benefits.
| DOS | DESCRIPTION | USAGE |
| VTR | Voluntary Termination - Regular Pay | Pay in monthly increments |
| ITR | Involuntary Termination - Regular Pay | Pay in monthly increments |
In the comments section of the PAN, enter, "Severance payment in a
accordance with settlement agreement". The Employee Relations Consultant
and/or Labor Relations Specialist in Campus Human Resources, Healthcare Human
Resources or UCOP HR/Benefits who is assigned to the case must be copied as an
additional recipient of the PAN. The PAN will serve as documentation that the
payment has been processed within the time limits specified by the settlement
agreement. A copy of the transaction must also be sent to Payroll Notification
(PPPAY) only if the department is requesting a rush check.
Depending on the duration of these payments, entry of new distributions may be required in the Personnel/Payroll System (PPS) - EDB. The DOS code payments may then be submitted through the use of the roster or the use of the EDAP process.
The following is an example of a settlement agreement payment using the DOS code of VTR processed on the EDAP screen.
PPETAP0-E1138 Dept. Adj Trans 06/17/YY 16:52:37
04/28/YY 02:51:57 Additional Pay (EDAP) Userid: ABCDE
ID: 555666555 Name: PAYMENT,SETTLEMENT Emp Status: A
Pay End: 06/30/YY Check Date: 07/01/YY Pay Cycle: MO Page 1 of 1
C
Seq: 00112 Per End: 0630YY Pay Cyc: M Dst: 11 E: E T: 2 D: Ttl: 7242
LACFPS: 4 760420 70000 2 Rate: 04187.00 AH: A Prorate:
DOS: VTR Time: 1.0000 H%:% DOS: Hr: DOS: Hr: WSP:
Seq: Per End: Pay Cyc: Dst: E: T: D: Ttl:
LACFPS: Rate: AH: Prorate:
DOS Time: H%: DOS: Hr: DOS: Hr: WSP:
Seq: Per End: Pay Cyc: Dst: E: T: D: Ttl:
LACFPS: Rate: AH: Prorate:
DOS: Time: H%: DOS: Hr: DOS: Hr: WSP:
Next Func: ID: 555666555 Name: SSN:
Seq No: Pay Cycle: MO Pay End: 0630YY
U0007 Update process complete
===>
F: 1-Help 2-Jump 3-PrevMenu
F: 9-UPDATE 12-Exit
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In the comments section of the PAN, enter, "Regular payment in accordance with settlement agreement". The Employee Relations Consultant
and/or Labor Relations Specialist in Campus Human Resources, Healthcare Human
Resources or UCOP HR/Benefits who is assigned to the case must be copied as an
additional recipient of the PAN. The PAN will serve as documentation that the
payment has been processed within the time limits specified by the settlement
agreement. A copy of the transaction must also be sent to Payroll Notification
(PPPAY) only if the department is requesting a rush check.
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