The Illinois Educational Labor Relations Act regulates labor relations and collective bargaining for educational employees, and the Illinois Public Labor Relations Act does the same for other public employees. Both acts apply to employers with 20 or more employees. These acts may result in retroactive or lump sum payments. These include:
A labor contract settlement may be made retroactive to an earlier date. If so, the lump sum paid for the retroactive period is considered IMRF earnings when paid to an active member and is not allocated to the retroactive period.
If a retroactive payment is made more than one calendar month after a member has terminated or retired or is no longer actively participating, do not report the amount as IMRF earnings.
For example, if a member terminates on June 15 but is paid a retroactive payment in July, those earnings are reportable to IMRF. However, if the retroactive payment is paid in August (or later), that payment is not reportable to IMRF.
The acts provide that contracts may contain binding grievance procedures. If an employee is awarded back pay pursuant to grievance arbitration, the amount paid is considered IMRF earnings.
If the award specifically states that the back pay is to be allocated to a prior period and identifies the back pay period and the amount allocable to each pay period (the months and amount allocated for each month), the actively participating member will receive IMRF service credit for those months.
If the award is for a lump sum and does not indicate the period and allocation amounts, the payment is considered IMRF earnings when paid to an active member. Under these circumstances, the member will not receive IMRF service credit for months without earnings.
If an actively participating member is awarded back pay by the appropriate labor board, it is considered IMRF earnings.
If the award specifically states that the back pay is to be allocated to a prior period and identifies the back pay period and the amount allocable to each pay period (the months and amount allocated for each month), the actively participating member will receive IMRF service credit for those months.
If the award is back pay in a lump sum without indicating the period and allocation amounts, the payment is considered earnings when paid to an active member. Under these circumstances, the IMRF member will not receive IMRF service credit for months without earnings.
The same rules apply to awards confirmed or directed by a court on appeal.
If the parties settle an employment dispute with a lump sum payment without designating its nature, the payment is presumed to be IMRF earnings when paid to an active member. The member will not receive IMRF service credit for months without earnings.
However, non-wage items, such as medical insurance or medical cost paid to wrongfully discharged employees who lost medical coverage, are not considered IMRF earnings. Also not considered IMRF earnings are awards of interest or attorneys’ fees.
Damage awards, such as damage payment for violation of civil rights laws, are not considered IMRF earnings and should not be reported.