UPB - Entering and Approving Previously Taxed Vacation Hours – Bi-weekly Hourly, Web Time Entry (UIC)

The Illinois Nurses Association (INA) and the SEIU Local 73 Technical (L-73) contracts allow for the annual payout of limited vacation benefits. Under the Internal Revenue Code, IRC Section 451(a), an item of gross income is includible in the taxable year in which it is actually or constructively received by a taxpayer. In a Letter Ruling, 9009052, the IRS held that an employee is constructively in receipt of income as soon as the right to receive cash for PTO becomes fixed. If the employee elects to receive the vacation payout at the end of the calendar year, the tax will be withheld from the payout. If the employee does not elect to receive the payout, the full or remaining balance of the eligible vacation hours will be treated as a taxable benefit. The employee will be taxed even if they did not elect to receive the payout.

When an employee uses taxed payout eligible vacation hours the next calendar year, the Time Approver must edit the employee’s submitted timesheet in the Employee Self-Service application and replace standard vacation hours with Vacation-TimeTaxed NotPrevPaid hours to ensure that the employee is not double taxed. This earn code is only available to Time Approvers in the timesheet.

The Vacation-TimeTaxed NotPrevPaid earn code is configured to pay assigned hours; however, those hours will not be used to calculate state or federal taxes within the pay event.

UIC HR will provide units a report that tracks the union negotiated, payout-eligible vacation hour balances.

Open the Pending Timesheet

1. Log in to Employee Self-Service.
2. Click Employee.
3. Click Time Sheet.
4. Make your selections:
   1. Select Approve or Acknowledge Time.
   2. Make the appropriate selection from the Act as Proxy list.
      1. Select Self if you are the Time Approver.
      2. If you are a Proxy, select the Time Approver’s name from the list.
5. Click the Select button.
6. Select the time sheet criteria:
   1. Select the appropriate Department and Description if more than one appears.
   2. Select the Pay Period from the list.
   3. Click the Select button.
7. Click the employee’s name in the Pending section to open the timesheet.

Review the Timesheet

8. Review and validate:
   1. The Time Sheet section to review hours entered and submitted by the employee.
   2. The Account Distribution section to review labor distributions.
   3. Use the methods below to make any necessary corrections.

Edit the Time Sheet hours for Vacation-TimeTaxed NotPrevPaid

9. Click the Change Record button.
10. Add hours to the Vacation-TimeTaxed NotPrevPaid earn code (bottom of the page).
    1. Click Enter Hours on the first day vacation hours were taken in that row.
    2. Type the hours in the Hours field.
    3. Click the Save button if only one vacation day was taken during the pay period.
    4. For multiple days in the same pay period, repeat the above steps.
       1. OR Click the Copy button if the same amount of daily vacation hours should be record on multiple days within the pay period.
          1. Select the checkbox for each applicable date of vacation taken.
          2. Click the Copy button once again.
          3. Click the Time Sheet button.

Reduce Submitted Vacation Hours

11. Zero out the entered regular vacation hours
    1. Click Enter Hours on the first day vacation hours need to be removed in that row.
    2. Type 0 hours in the Hours field.
    3. Click the Save button if only one vacation day needs to be removed during the pay period.
    4. For multiple days in the same pay period, repeat the above steps.
       1. OR Click the Copy button if the same amount of daily vacation hours should be removed on multiple days within the pay period.
          1. Select the checkbox for each applicable date of vacation being reduced.
          2. Click the Copy button once again.
          3. Click the Time Sheet button.

Approve the Timesheet

1. Add comments
   1. Click the Comments button.
   2. Type in the Enter or Edit Comment memo field an explanation of the edits and corrections made to the timesheet, including the substitution of Vacation-TimeTaxed NotPrevPaid hours for regular vacation hours.
   3. Click the Save button.
2. Approve.
   1. Click the Previous Menu button to return to the timesheet.
   2. Click the Approve button.
3. Exit the timesheet by clicking the Previous Menu button or the Exit link to close the Employee Self-Service application.