Following a recent meeting with MBTA Labor Relations, they have rechecked their original calculations and discovered that a column was mistakenly not paid. This column represented overtime from 07/01/18 through the date the new pay went into effect in March 2019. The E-Board has decided to not wait until we have the sit down as previously discussed, and have the MBTA pay out the money owed to the membership as soon as possible. They are processing these amounts now, and you can expect them to be paid out in the near future. This does not necessarily mean there are no further mistakes that may be uncovered, only that Labor Relations is acknowledging and taking fault for this singular mistake at this time. We understand there are members who have issues outside of this, and those are also currently being addressed. The “office hours” meetings, in the event that members believe their payments are still wrong, will also still be scheduled at a later date as previously discussed.

In regards to the uniform allowance, the MBTA has agreed to reimburse officers up to a set amount given you provide receipts for said purchases. The logistics behind this are still being sorted out, so we urge that members do not go out purchasing items with expectations they will be reimbursed just yet. We hope to have more information later next week, and will provide that to you all when we receive it.

Ground rules for negations on the next contract have been set, and we are currently in the process of selecting dates for these meetings. We are also looking at the end of October for the next upcoming union meeting, and will have more information in regards to specific date, location, and agenda as we move closer. If you have any questions please feel free to contact any of E-Board members.

As many of you may have heard, state transportation officials recently signed off on weekend closures of portions of the MBTA to speed up repairs along the system. The MBTA control board approved the plan Monday, and the work is expected to begin in October and last through December.

Discussions regarding staffing levels, and the impact this may have on the association, have not yet taken place. However, we do want to make you all aware that we anticipate this resulting in an increase in the amount of overtime needed during this period.

Attached below are links to the articles along with the plan proposal. We will pass along more information regarding the matter as soon as we receive it.

MBTA Plans Top Shut Down Sections of T For Repairs - 7 News Boston

MBTA Mulling Weekend Shutdowns To Expedite Repairs - Boston 25 News

Plan Proposal

As you are all aware by now, our annual clothing allowance, which was received on the 7/26/19 pay check, was taxed without any prior warning from the MBTA. After several correspondences between our council and Labor Relations, we were given an explanation in which the tax was due to a new IRS code. The following is the exact language MBTA payroll had used to explain the new tax to labor relations, who passed it along to us:

“From Payroll:

Per IRS publication, if documentation/receipt is not provided to the employer by the employee, the payment made will have taxes deducted and will be reported on the W-2 at year end.  

In order to not be considered tax-reportable payments by the employer, the employee is required to submit detailed documentations/receipts to the employer.

Detail:  

Cash disbursements, such as reimbursement and allowances, will be considered issued under a “Non-accountable plan” if employees are not required to substantiate the expenses with invoices or other proof of expenditures, and return any unused amounts.  The Commonwealth is required under IRS tax rules to report reimbursement and allowance disbursements under “Non-accountable plans” as taxable wages for amounts paid in calendar year 2018.

 Employees have an independent tax obligation, separate from their employer, to report business expenses received under a “Non-accountable plan” as taxable income, even if their employer did not report these amounts as wages.  

Wages and Compensation: Employee Business Expense Reimbursements.

Employers determine remuneration for employment, including wages and other compensation. The IRS determination of whether reimbursements or allowances paid to employees are considered taxable “wages” is based upon whether the employer uses an “Accountable plan” or a “Non-accountable plan” when disbursing employee business expense reimbursements, as outlined in IRS Publication 15 (2018) Circular E Employers Tax Guide: https://www.irs.gov/pub/irs-pdf/p15.pdf.  See also: Quick Reference Guide for Public Employers: https://www.irs.gov/pub/irs-pdf/p5138.pdf

Employee business expense reimbursements. (IRS Publication 15, page 15)

A reimbursement or allowance arrangement is a system by which you pay the advances, reimbursements, and charges for your employees' business expenses. How you report a reimbursement or allowance amount depends on whether you have an accountable or a non-accountable plan. If a single payment includes both wages and an expense reimbursement, you must specify the amount of the reimbursement.

These rules apply to all ordinary and necessary employee business expenses that would otherwise qualify for a deduction by the employee.

Accountable plan. To be an accountable plan, your reimbursement or allowance arrangement must require your employees to meet all three of the following rules.

1. They must have paid or incurred deductible expenses while performing services as your employees. The reimbursement or advance must be payment for the expenses and must not be an amount that would have otherwise been paid to the employee as wages. 

2. They must substantiate these expenses to you within a reasonable period of time.

3. They must return any amounts in excess of substantiated expenses within a reasonable period of time.

Amounts paid under an accountable plan aren't wages and aren't subject to income, social security, Medicare, and FUTA taxes.

If the expenses covered by this arrangement aren't substantiated (or amounts in excess of substantiated expenses aren't returned within a reasonable period of time), the amount paid under the arrangement in excess of the substantiated expenses is treated as paid under a non-accountable plan. This amount is subject to income, social security, Medicare, and FUTA taxes for the first payroll period following the end of the reasonable period of time.

A reasonable period of time depends on the facts and circumstances. Generally, it is considered reasonable if your employees receive their advance within 30 days of the time they incur the expenses, adequately account for the expenses within 60 days after the expenses were paid or incurred, and return any amounts in excess of expenses within 120 days after the expenses were paid or incurred. Also, it is considered reasonable if you give your employees a periodic statement (at least quarterly) that asks them to either return or adequately account for outstanding amounts and they do so within 120 days

Non-accountable plan. Payments to your employee for travel and other necessary expenses of your business under a non-accountable plan are wages and are treated as supplemental wages and subject to income, social security, Medicare, and FUTA taxes. Your payments are treated as paid under a non-accountable plan if:

• Your employee isn't required to or doesn't substantiate timely those expenses to you with receipts or other documentation,

• You advance an amount to your employee for business expenses and your employee isn't required to or doesn't return timely any amount he or she doesn't use for business expenses,

• You advance or pay an amount to your employee regardless of whether you reasonably expect the employee to have business expenses related to your business, or

• You pay an amount as a reimbursement you would have otherwise paid as wages”

As a result of this tax and in response the Executive Board has filed a Step 3 Grievance in an attempt to rectify this matter. The actual grievance was emailed to the membership in an attachment, and will also be made permanent on the website under the Grievance tab. 

It should also be noted we have not received any notice on a completion time frame for the second round of retro recalculations. During the meeting with payroll, that we had referenced in our last email, they gave an approximate time frame of beginning to mid August. We do not anticipate a punctual completion of the recalculations, but assure you all we will notify you if we receive any notice.

The President of the Executive Board, accompanied by our attorney, met with members of the MBTA Labor Relations Counsel and the head of the MBTA Payroll Department. The purpose of the meeting was to discuss the retroactive payment discrepancies, ensure the MBTA acknowledges the issue, and have both parties agree on a plan of correction that would ensure all of our members receive what they are entitled to. We apologize in the delay of information being passed to the membership, and whole heartedly understand all of your frustration. Receiving the retroactive payment when we did, the Friday prior to the July 4th holiday week, attributed to the delay in the meeting and this message to you all.

After discussion, the MBTA had acknowledged there may be discrepancies in the payments. They explained to us that the new state payroll system they are forced to use is cumbersome. They have agreed to, and have already began auditing thecalculations for the entirety of our association. When this process is complete the members of the Executive Board will sit down with the Payroll Department to be used as test subjects. They will show us how they recalculated our payments and we will ensure they used the appropriate Step Rate, Education Level and correct sum of OT hours worked. If this process is a success, and none of our new calculations and subsequent new payments are off, we will then authorize the Payroll Department to issue the new payments for all members. 

When we receive the second round of payments, and if some members still have discrepancies, the MBTA has agreed to host somewhat of an “office hours” type of meeting. At that time those members affected can sit down with a member of the payroll department to work out whatever the issue is. 

We understand the burden this is putting on some of you and ensure you we have been doing everything we can to get the adjustments done in a timely and correct manner, and appreciate your patience as we navigate this issue. As soon as we have more information to pass, such as tentative dates such as when to expect each step of this process to take place, we will inform you. As always if you have questions on this or any other matter please contact and E-Board member.

As you all are aware the retroactive payments from the settlement of our last MOU has posted in this week’s check. We have received many concerns on the payments being incorrect. We understand everyone’s frustration with another error on behalf of the MBTA. Our attorney is currently hashing our specifics on what exactly was paid out, and for what dates. Once we have further info from them we will pass word on how we will go about addressing the shortcomings in some of your payments. In the meantime, please send an email to Eboard@MBTAPA.com informing us of what you received vs what you believe you are entitled too.

We are aware many who were entitled to education backpay as a result of the contract agreement have not received it. Please inform us if you have not received this payment in an email, and how much you believe you should be receiving.

Again we want to express our understanding in all of your frustration. This is unacceptable and we will take every step possible to identify the issue and rectify it.

It has been brought to the association’s attention that there has been an Encore Boston Harbor employee directing traffic inside of the Wellington Station busway. No notice was ever provided, nor an opportunity to bargain the issue. In response the association has begun the steps in filing a grievance. You can find the grievance under the ‘Grievances’ tab located in the Member’s Resources section of the website.