Ala. Admin. Code r. 480-4-2-.29

Current through Register Vol. 43, No. 1, October 31, 2024

Section 480-4-2-.29 - Back Pay Awards

If a worker who has been wrongfully separated from a job is reinstated to that job retroactively and is paid wages for that period in which he was separated, the following actions are provided:

(a) The amount of back pay is defined as "wages" in Code of Ala. 1975, § 25-4-16. For tax payment and reporting purposes this payment is to be reported during the quarter it is paid and taxes paid thereon in the same manner as wages paid to other workers during that quarter. This provision applies only to back pay awards made on or after May 28, 1980, except those ordered prior to that date by a court or the National Labor Relations Board (NLRB).

1. If the worker receiving back pay has been paid unemployment benefits for any week during the period covered, the amendment to Code of Ala. 1975, § 25-4-78(8) requires:

(i) The claim be reopened, even after the end of the benefit year and a redetermination be issued assessing a disqualification for each week of unemployment falling within the award period, under Code of Ala. 1975, § 25-4-77, as "not unemployed." This of course is an appealable determination.

(ii) The amount of benefits paid during the disqualification period be determined, an overpayment established in that amount and the employer advised of the amount. The employee (claimant) must also be notified. This, again, is appealable.

(iii) The employer making the payment must deduct the amount of the overpayment from the payment and immediately transmit that amount to the Department, except in those cases resulting from action by the National Labor Relations Board.

(iv) The amount of restitution must be credited against the overpayment and the claimant's MBA restored.

(v) Benefit wage or benefit cost charges to the employer's experience rating or reimbursement account will be removed and credit applied in the year and quarter in which the restitution of the overpayment is received.

(b) The law requires the employer to deduct the overpayment amount from the award except in those cases resulting from action by the NLRB. The employer must determine the amount to be deducted, by preparing a Notice of Back Pay Award (Form BEN-290) or such other form as the Director may prescribe. This notice contains a request that the Department compute the amount of benefits paid to the employee in question. This request will be processed and the employer notified of the amount of overpayment to be collected.

(c) It should be noted that these provisions apply only to individuals who were separated from their jobs and are returned with pay, on a retroactive basis. It does not apply when the worker is not separated as in the case of retroactive awards made for demotions or discriminatory promotions, etc.

(d) Because of an agreement between the Department and the NLRB as a result of a Supreme Court decision, the employer deduction requirement of Code of Ala. 1975, § 25-4-78(f) is not to be applied to back pay awards resulting from a National Labor Relations Board back pay order, settlement agreement or adjustment. Therefore, an employer will no longer be required to deduct and transmit benefits previously paid to the employee, from a back pay award resulting from National Labor Relations Board involvement. All employers will be required to continue providing the Department with notice of the issuance of a National Labor Relations Board back pay award prior to payment to the employee on Form Ben 290, currently in use. Form Ben 290 should be forwarded to the attention of Claims Investigation and Collections Unit, Department of Industrial Relations, Montgomery, as far in advance of the issuance of the award as is possible to facilitate collection arrangements.

(e) The employer's experience rating account will be given an appropriate credit at the time the overpayment resulting from the National Labor Relations Board award is established. Reimbursing employers will be given an appropriate credit against their benefit costs as the overpayment is collected by the Department.

Author: William E. Parsons

Ala. Admin. Code r. 480-4-2-.29

September 30, 1982.

Statutory Authority:Code of Ala. 1975, §§ 25-2-7, 25-2-8, 25-4-111.