Quality Reporting Service Center

Chapter 11: Contract Services

Coverage under the RRA and RUIA

If a labor organization contracts work with non-railroad employees, this may allow the non-railroad employees to be covered under the Railroad Retirement Act (RRA) and Railroad Unemployment Insurance Act (RUIA) as though they were a covered employee. For this to occur, the non-railroad employees would have to be determined to be in an employment relationship with a covered employer.

Read more about Chapter 11: Contract Services

Chapter 10: Miscellaneous Compensation and Sick Pay

Definition of Miscellaneous Compensation

Miscellaneous compensation is any payment which is subject to Tier I taxes and is creditable as Tier I compensation, but cannot be credited as regular compensation. Miscellaneous compensation, as referred to in these instructions, must meet the following conditions:

Read more about Chapter 10: Miscellaneous Compensation and Sick Pay

Chapter 09: Guarantee Payments

Guarantee Payments

Guarantee Payments are employer payments under any merger, agreement or job protection arrangement that guarantees payment of compensation during periods when an employee has been deprived of employment. These payments are offered in the form of contracts, settlements and/or various agreements between management and its employees.

There will be situations that require a decision by the RRB, its General Counsel, or even a ruling in a federal court. This section reviews several of these type cases and provides a synopsis of each.

Read more about Chapter 09: Guarantee Payments

Chapter 06: Back Pay

Back Pay Defined

Back pay, as used in these instructions, is a retroactive wage increase. For example, a negotiated contract expires December 31st but employees continue to work while a new contract is negotiated. A new contract is approved the following August which includes a pay increase retroactive to January 1st. The retroactive increase, or back pay, is paid in September, for work beginning January 1st.

Crediting Back Pay

Read more about Chapter 06: Back Pay

Chapter 08: Separation/Severance Payments and Dismissal Allowances

Separation/Severance and Dismissal Allowances are Creditable Compensation

Payments that result from the abolition of an employee's job may be known as separation, severance, termination, coordination, dismissal, continuation, or guarantee payments or allowances. By whatever name they are called, they constitute creditable and taxable compensation. The regulations of the Railroad Retirement Board (RRB) distinguish between separation or severance allowances and dismissal allowances. These two types of payments are creditable in different ways.

Read more about Chapter 08: Separation/Severance Payments and Dismissal Allowances

Chapter 07: Pay for Time Lost

Pay for Time Lost Defined

Read more about Chapter 07: Pay for Time Lost

Chapter 05: Vacation Pay

Chapter Overview

The instructions in this chapter are intended only to provide information on correct reporting of service and compensation in various vacation pay situations. Some examples may not be applicable to every employer.

Vacation Taken

Vacation compensation may be credited to the actual vacation period or may be credited when paid. It is assumed that only current employees with employment rights can actually take a vacation.

Read more about Chapter 05: Vacation Pay

Chapter 04: Selected Fringe Benefits

Group Term Life Insurance

The cost of coverage of group term life insurance greater than $50,000 is considered compensation under the RRA to the extent that it is included in the gross income of an employee and subject to railroad retirement tax. The cost of group term life insurance with respect to periods within an employment relationship is treated the same as ordinary compensation creditable for both Tier I and Tier II purposes. See Internal Revenue Code (IRC) section 79 for detailed information.

Read more about Chapter 04: Selected Fringe Benefits

Chapter 03: Delegate Service and Other Exclusions to Creditable Compensation

Payments Not Considered Creditable Compensation

The following payments made to an employee by an employer are not considered creditable compensation under the RRA and the RUIA, and therefore should NOT be reported to the RRB: