This program letter supersedes program letter 2003-05 from May 2003
and provides information about what railroad employers need to know
regarding sections 2(f) and 12(o) of the Railroad Unemployment Insurance Act (RUIA).
Copies of this program letter should be provided to all claims department,
labor relations and payroll department personnel involved in the processing
and payment of claims for pay for time lost, guarantee pay and personal injury settlements.
Prepared by:
Quality Reporting Service Center
Railroad Retirement Board
844 North Rush Street
Chicago, Illinois 60611-2092
Phone: |
(312) 751-4992 |
Fax: |
(312) 751-7190 |
E-mail: |
QRSC@rrb.gov |
General Railroad employers are
required under certain circumstances to reimburse the Railroad Retirement Board
(RRB) for unemployment and sickness insurance benefits paid to their employees.
Such reimbursements are required under sections 2(f) and 12(o) of the RUIA.
Section 2(f) - Section 2(f) requires that employers reimburse the RRB for
benefits paid to an employee for days for which salary, wages, pay for time lost
or other remuneration is later determined to be payable. Reimbursements under
section 2(f) generally result from the award of pay for time lost or the payment
of guaranteed wages. Please note that the term "remuneration" includes the
following types of employer payments, and that the payments are, therefore,
subject to the provisions of section 2(f):
- Dismissal allowances paid pursuant to labor-protective conditions imposed
by the Surface Transportation Board (e.g. New York Dock or Oregon Conditions),
or under any related implementing agreements;
- Coordination allowances under the Washington Job Protection Agreement of
1936;
- Annual Compensation payments under Article IV of the job stabilization
agreement of February 7, 1965, or under revisions to that agreement; and
- Any similar 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.
The only exception to the types of payments listed above are payments made
under a non-governmental plan for unemployment insurance that the RRB has
approved under section 1(j) of the RUIA. Benefits paid under a non-governmental
plan do not constitute "remuneration". (See
Circular Letter No. UI-C-220, RRB
Regulation Defining Non-governmental Plans for Unemployment or Sickness
Insurance.)
The statutory language of section 2(f) is as follows:
(f)"If (i) benefits are paid to any individual with respect to unemployment
or sickness in any registration period, and it is later determined that
remuneration is payable to such employee with respect to any period which
includes days in such registration period which had been determined to be days
of unemployment or sickness, and (ii) the person or company from which such
remuneration is payable has, before payment thereof, notice of the payment of
benefits upon the basis of days of unemployment or sickness included in such
period, the remuneration so payable shall not be reduced by reason of such
benefits but the remuneration so payable, to the extent to which benefits were
paid upon the basis of days which had been determined to be days of unemployment
or sickness and which are included in the period for which such remuneration is
payable, shall be held to be a special fund in trust for the Board. The amount
of such special fund shall be paid to the Board and in the collection thereof
the Board shall have the same authority, and the same penalties shall apply, as
are provided in section 8 of this Act with respect to contributions.
Section 12(o) -
Under section 12(o), the RRB is entitled to reimbursement of
benefits paid for days of sickness resulting from any injury or infirmity for
which the employee is paid a personal injury settlement or damages. Section
12(o) of the RUIA reads as follows:
(o) Benefits payable to an employee with respect to days of sickness shall be
payable regardless of the liability of any person to pay damages for such
infirmity. The Board shall be entitled to reimbursement from any sum or damages
paid or payable to such employee or other person through suits, compromise,
settlement, judgment, or otherwise on account of any liability (other than a
liability under a health, sickness, accident, or similar insurance policy) based
upon such infirmity, to the extent that it will have paid or will pay benefits
for days of sickness resulting from such infirmity. Upon notice to the person
against whom such right or claim exists or is asserted, the Board shall have a
lien upon such right or claim, any judgment obtained thereunder, and any sum or
damages paid under such right or claim, to the extent of the amount to which the
Board is entitled by way of reimbursement.
RRB Notices Under Sections 2(f) and 12(o)
Effective July 1, 2006 the RRB no longer sends form letter ID-30 (Notice Under
Section 2(f) Of Railroad Unemployment Insurance Act) to payroll offices when
employees indicate on unemployment applications that they may receive wage
guarantee payments or pay for time lost.
Each business day the RRB sends form letter ID-4E (Notice of RUIA Claim
Determination) or its electronic equivalent notice via RaiLinc to rail
employers. This constitutes sufficient and timely notice of benefit payments
that may be subject to reimbursement under section 2(f) of the RUIA from any
salary, wages, pay for time lost, or other remuneration that may become payable
for days for which benefits are paid.
You should continue to obtain information from the RRB about the amount of
reimbursement due under section 2(f) by email or facsimile when:
- an employee who is claiming unemployment benefits receives a coordination
or dismissal allowance or may be covered under the National Job Stabilization
Agreement or under a similar plan providing for a minimum amount of work or
compensation, or
- an employee who is claiming unemployment benefits receives pay for time
lost.
A notice of lien (Form ID-30B) is mailed to an employer when an applicant for
sickness benefits indicates that he or she has filed or expects to file a claim
against the employer for personal injury. Form ID-30B is notice of the RRB's
right to reimbursement of sickness benefits from any sum or damages payable on
account of liability for the employee's injury or illness.
Amount of Reimbursement
Prior to payment of either pay for time lost in the form of wages or
guarantee pay, or the payment of a personal injury settlement, railroad
employers should contact the RRB's Sickness and Unemployment Benefits Section to
obtain information about the amount of benefits to be deducted from the award
for reimbursement under section 2(f) or section 12(o). See
Employer Requests for
Information below.
Section 2(f) - In general, the amount of reimbursement due under section 2(f)
from the award of pay for time lost or other remuneration is the amount of
benefits paid for days in the period for which the payment is to be made, or the
amount of the payment for the period, whichever is less.
Section 12(o) - Under the RRB's regulations (20 CFR 341.5), the amount of
reimbursement due the RRB under section 12(o) is the amount of the sickness
benefits paid to the employee for the infirmity for which he or she is paid any
sum or damages, or the net amount of the settlement, whichever is less. The net
settlement is considered to be the amount of the damages paid with respect to
the employee's injury or infirmity, minus the amounts of the medical, hospital
and legal expenses incurred by the employee in connection with the injury.
Medical and hospital expenses are deductible in determining the amount of the
net settlement even if they are covered by the employee's insurance.
Advances paid to an employee on a personal injury settlement are considered
to be paid on account of liability and are subject to the provisions of section
12(o). This is true even if no settlement or judgment is entered, or the
employee does not prevail in a court action for damages against the employer.
When money is paid to an employee in the form of an advance on a personal injury
settlement, keep in mind that sickness benefits paid by the RRB may be
recoverable as a result of such payments.
Employer Requests for Information
Please refer to Program Letter 2006-05 from February 2006 for information about
use of secure email for requesting reimbursement amounts.
Employer requests for information about amounts due under sections 2(f) and
12(o) may be made by facsimile using special forms (Forms ID-3S and ID-3U)
developed by the RRB. Under normal circumstances, you will receive a reply to
your request on the first business day following the RRB's receipt of your fax
transmission. You may make fax requests Monday through Friday (except Federal
holidays), 8:00 AM to 4:30 PM, Central Time. The fax number is (312) 751-7185.
Employers’ use of Forms ID-3S and ID-3U helps to ensure that all the
information we need to respond to your request is provided. The forms along with
detailed instructions for their completion may be obtained by contacting our
Sickness and Unemployment Benefits Section. The telephone number is (312)
751-4820. Printable document versions of the forms are available at www.rrb.gov.
The completed fax form reply from the RRB is your confirmation of the amount
due under section 2(f), or the amount of the RRB's lien under section 12(o). A
confirmation letter will not be sent.
Forms ID-3S or Form ID-3U may also be used for inquiries about RUIA benefit
amounts paid to employees prior to any settlement or guarantee payments. Please
clearly mark such forms “For Informational
Purposes Only”.
Employer Reporting Requirements
Section 2(f) - Under the RRB's regulations (20 CFR 340.16), an employer paying
remuneration for time lost, including guarantee pay, must remit the amount of
reimbursement due under section 2(f) within 30 days of the date of the payment
of the remuneration. The following information is always needed in order to
determine the amounts due under section 2(f):
- the employee’s name and social security number,
- the amount of the payment,
- the time period covered by a guarantee payment
- the exact days paid in a pay for time lost claim.
Notice of the payment should be made by facsimile using Form ID-3U.
Section 12(o) - When an employer makes a settlement or must satisfy a final
judgment based on an injury for which the employee received benefits, the RRB's
regulations (20 CFR 341.6) provide that the employer must notify the RRB in
writing of the settlement or judgment. The notice must be made within 5 days of
the date of the settlement or judgment, and include:
- the employee’s name and social security number,
- the amount of the settlement or judgment,
- the date of settlement or final judgment, and
- the amount withheld from the settlement or judgment to satisfy the RRB's
lien.
Notice of the settlement should be made by facsimile using Form ID-3S.
Employer Reimbursement Requirements
Section 2(f) - Payment of an amount due under section 2(f) is due at the RRB
within 30 days of the date of the payment of the remuneration for time lost.
Section 12(o) - Payment of the amount of the RRB's lien is due at the RRB
within 30 days after the date of the settlement or final judgment. In order to
insure that remittances are properly credited, be sure to include the following
information on the check or on the remittance document:
- Your payor code,
- The billing document ID number, and
- Whether the remittance is for reimbursement of unemployment (UI) or
sickness (SI) benefits.
Your payor code and the billing document ID number will be shown on the RRB's
response to your Form ID-3S or Form ID-3U if you indicated on the form that the
employee's claim has been settled, i.e. your Form ID-3S or Form ID-3U request
was not for informational purposes only.
Payor codes and billing document ID numbers are also shown on the Form G-145
billing statements issued by the RRB.
If you do not know your payor code or the billing document ID number, then
show on your remittance the employee's name, the employee's social security
number and the date of the injury or the period of time for which reimbursement
is being made.
Remittances
Please refer to Program Letter 2006-07 from September 2006, for information
concerning on-line remittances via the Department of Treasury’s Pay.gov service.
Remittances may be made electronically through the Automated Clearing House
(ACH) using the RRBLINK system. If the RRBLINK system is not used, remittances
are to be mailed to the RRB's lockbox which is operated by U.S. Bank. The
lockbox address is:
U.S. Railroad Retirement Board
Debt Recovery Division - RUIA
P.O. Box 953492
St. Louis, Missouri 63195-3492
Although every effort is made to credit remittances to the correct account,
if a remittance cannot be properly matched with the accounts receivable, a
second billing notice may be issued on the debt. If you receive notice of a debt
after submitting a reimbursement, please show the date and the amount of your
remittance on the second notice and return a copy of the notice to the RRB.
RRBLINK - Electronic Payment System
RRBLINK is an electronic payment system designed specifically for railroad
employers. In addition to paying reimbursements due under sections 2(f) and
12(o) of the RUIA, RRBLINK can be used to make various tax deposits, including
unemployment insurance contributions, Employer's Annual Railroad Retirement and
Unemployment Return (CT-1), Quarterly Federal Excise Tax Return (720),
Employer's Annual Federal Unemployment Tax Return (940), Employer's Quarterly
Federal Tax Return (941) and Annual Return of Withheld Federal Income Taxes
(945).
RRBLINK payments can be initiated by a personal computer with a
communications modem, a touch-tone telephone or a voice telephone. RRBLINK is
the recommended method for making reimbursements under sections 2(f) and 12(o).
The system ensures that payments are credited properly and timely, and helps
employers avoid unwanted interest and penalty charges. Additional information
about RRBLINK and enrollment instructions can be obtained by contacting the
agency's RRBLINK representative at (312) 751-4668 or U.S. Bank’s system
administrator at (888) 273-2265.
Interest Charges
The RRB charges
interest and assesses penalties on delinquent debts. The regulations of the RRB
(20 CFR 340.16 (b)) require that railroad employers and other parties paying any
sum or damages for personal injury reimburse the RRB for amounts due under
section 12(o) of the RUIA within 30 days of the date of settlement. The RRB's
notice of the lien amount is the initial notice of the amount due upon
settlement. Billing statements are issued when the RRB is notified of a
settlement. Amounts due under section 12(o) are due within 30 days of the
settlement date.
Interest begins to accrue on the outstanding principal amount of a debt on
the day of the final settlement or judgment and is charged to the delinquent
account 30 days later. Thereafter, interest is charged every 30 days until the
debt is paid in full. Interest is calculated according to the following formula:
Interest Rate x Interest Days x Principal
divided by
Days in the Year (365)
Example of Interest Charge Dates:
In this example, a personal injury settlement is made on June 13. The railroad
must notify the RRB of the settlement by June 18. Payment is due at the RRB by
July 13, 30 days after the date of settlement. If payment is not received by
July 13, interest will be calculated and charged on the unpaid balance on July
13 and every 30 days thereafter until the debt is paid in full.
6/13 |
7/13
|
8/12 |
9/11 |
Settlement Date |
1st Interest Charge |
2nd Interest Charge
|
3rd Interest Charge |
Accounts receivable under section 12(o) of the Railroad Unemployment
Insurance Act are subject to interest at an annual rate determined by the U.S.
Treasury Department.
Accounts receivable under section 2(f) of the Railroad Unemployment Insurance
Act are subject to interest in the same manner as unpaid employer contributions
under section 8(g) of the RUIA. Section 8(g) provides for the assessment of
interest at the rate of 1 percent per month, or fraction thereof, from the due
date until paid. The annual interest rate applied to debts incurred under
section 2(f) is 12 percent. The rate is shown on all section 2(f) billing
statements.
Penalty Charges
Debts that remain unpaid by the collection due date (30 days after the date
of the billing statement) are considered delinquent. Debts which are delinquent
for 90 days incur a penalty calculated at a rate of 6 percent per year assessed
on the principal balance of the debt. Penalty charges continue to be assessed
every 30 days until the debt is paid in full. Penalties are calculated using the
following formula:
Penalty Rate x Penalty Days x Principal
divided by
Days in Year (365)
Example of Penalty Charges:
In this
example, a railroad is issued a billing statement on October 1. The collection
due date is October 31. If the bill is not paid in full 90 days after the
collection due date, penalties will be calculated and charged on January 29,
February 28 and every 30 days thereafter until the debt is paid in full.
10/1 |
10/31 |
11/30 |
12/30 |
1/29 |
2/28 |
Settlement Date |
Collection Due Date |
30 Days Delinquent |
60 Days Delinquent |
1st Penalty Calculation (90 day charge) |
2nd Penalty Calculation (90 day charge) |
Delinquent Debts
The RRB is
required by the Debt Collection Improvement Act of 1996 to refer debts,
delinquent for 180 days, to the Department of the Treasury for offset of any
Federal government payments that may be due to the debtor by any Federal agency
or program and for cross-servicing of the debt. Cross-servicing is an
enforcement program in which debts are placed in collection programs such as
referral to private collection agencies, referral to the Department of Justice,
wage garnishment, etc. to enforce recovery of the debt. Charges may be added to
the debt by Treasury, private collection agencies, DOJ, etc. on debts referred
for offset or cross-servicing. Once a debt has been referred to Treasury, it is
no longer in the RRB’s jurisdiction. After referral to Treasury, all inquiries
regarding the debt should be made directly to the U.S. Treasury. Their toll free
number is (888) 826-3127.
Canceling Billing Statements and Refund
Procedures
Occasionally, the RRB receives premature information that a
settlement has been made and a billing statement is prepared on the basis of
that information. If you receive a billing statement on a case that has not yet
been settled, contact our Sickness and Unemployment Benefits Section immediately
by telephone or fax. The telephone number is (312) 751-4825. The billing
document will be canceled and your account will be adjusted accordingly.
Under certain circumstances, railroads are entitled to refunds of amounts
remitted to the RRB. Refunds of amounts that were improperly paid or are no
longer due the RRB can be obtained by writing to U.S. Railroad Retirement Board,
Bureau of Fiscal Operations - Debt Recovery Division, 844 N. Rush Street,
Chicago, Illinois 60611-2092. Give the name and social security number of the
individual for whom an incorrect remittance was made, the amount to be refunded
and the reason for the refund request.
Railroad employers cannot take credit for overpaid amounts on remittances
that are due on other employee accounts. Refunds of amounts incorrectly paid can
only be obtained by writing to the Bureau of Fiscal Operations - Debt Recovery
Division.
Paperwork Reduction Act Notice
The
RRB is authorized to collect the information requested on Forms ID-3S and ID-3U
under section 5(b) of the Railroad Unemployment Insurance Act (RUIA). The
information is needed to determine the amount of benefits reimbursable under
section 12(o) or section 2(f) of the RUIA. We estimate that Forms ID-3S and
ID-3U take an average of 3 minutes per response to complete, including time for
reviewing the instructions, getting the needed data, and reviewing the completed
form. If you wish, send comments regarding the accuracy of our estimate or any
other aspects of the forms, including suggestions for reducing completion times,
to the Chief of Information Management, Railroad Retirement Board, 844 N. Rush
Street, Chicago Illinois 60611-2092.
Inquiries
Questions and inquiries
concerning sections 2(f) and 12(o) of the Railroad Unemployment Insurance Act
should be directed as follows:
Questions concerning Form ID-30B, and requests for information about amounts
due under section 2(f) or section 12(o)
Sickness and Unemployment Benefits Section
(312) 751-4825
Fax: (312) 751-7185
Inquiries about billing statements, interest and penalty charges
Bureau of Fiscal Operations - Debt Recovery Division
(312) 751-4848
Fax: (312) 751-3364
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