Damage Payments: Wage Impacts for Late Signature Oaths
- Damage payments should be treated as wage income subject to withholding for federal and state income and FICA taxes.
- Because the services performed during the time the Oath remained unsigned are not considered "covered employment," the employee does not meet the definition of an "eligible employee." Therefore, the damage payment is not subject to UCRP contribution or deduction, and any contributions made by the employee to UCRP should be returned.
- If the employee does not sign the Oath, vacation or other legally required accrued benefits must be included in the damage payment. Sick pay is excluded from this requirement.
- A "damage" payment is not intended to be in addition to any wages that may have been paid. Rather, it is meant to provide payment for services rendered during the time period that the employee was working and the University failed to present the Oath to the employee for signature.
- If it was not discovered until later that the University had failed to provide the Oath to an employee for signature and had paid "regular" wages, those wages have to be backed out and recoded as a damage payment with the appropriate attributes noted above.
The following procedures must be followed before a damage payment may be made:
The employee must submit a claim for a damage payment to the employing department.
- The department completes all fields on the Damage Payment Report form FR.126 (view Damage Payment Report form FR.126 instructions) indicating the gross amount to which the employee would have been entitled if the employee had been in the payroll system with an active employment status.
- For claims of less than 120 days, the department chair or other authorized designee must sign the Damage Payment Report.
- An Administrative Officer for the UC Santa Barbara campus must approve any damage claims that are for more than 120 days. View a list of current authorized signers for UC Santa Barbara
- Complete the Job Data Update form to correct the hire date and record the Oath in UCPath.
- Obtain a signed State Oath of Allegiance from the employee and return a copy to the BFS- Payroll office via ServiceNow. Oaths are currently administered via DocuSign (see Oath Statement - DocuSign PowerForm).
- Obtain a completed Damage Payment Release form FR.127 from the employee.
- Send the completed original forms to the Central Payroll office via ServiceNow.
- Validates and denies/approves the request for Damage Payment
- Submits appropriate Payroll Request:
- Any previous salary payments will be reversed out and a damage payment issued.
- If the employee has not signed the Oath and has not received pay, please submit an off-cycle request via ServiceNow.
- Processes approved Damage Payment