Section 3309-1-02 - [Effective 7/1/2025] Definition of compensation(A) This rule amplifies and is in addition to the provisions of division (V) of section 3309.01 of the Revised Code.(B) Definitions(1) "Salary" means base salary paid to an employee as set forth in the employee's contract, a collective bargaining agreement, or employer's salary schedule.(2) "Wages" means compensation paid to an employee for services based on time worked, but excluding overtime.(3) "Earnings" means payments paid by reason of employment other than salary and wages.(C) The following earnings paid by an employer are not "compensation." (1) Payments made by the employer for accrued but unused compensatory time for overtime worked;(2) Attendance incentives;(4) Employee recruitment incentives;(6) Payments not paid pursuant to an employment agreement, collective bargaining agreement, or salary schedule;(7) Payments to settle a grievance that are not backpay;(8) Retroactive payments or pay increases made or granted by the employer in whole or in part in consideration of retirement or an agreement to retire; and(9) Any terminal payments or other additional remuneration paid by the employer in consideration of retirement or an agreement to retire.(D) The following earnings are "compensation"(2) Except as set forth in division (V) of section 3309.01 of the Revised Code or paragraph (C) of this rule, payments to an employee in accordance with an employment agreement, collective bargaining agreement, or salary schedule.(E) When an employee as defined under division (B)(2) of section 3309.01 of the Revised Code is a self-employed individual who provides services common to the normal daily operation of an employer pursuant to a service agreement between the employee, or the employee's business, and the employer, the employee's compensation shall be an amount equal to the employee's gross income from the service agreement less necessary expenses to perform the services(F) Contributions on backpay awarded to an employee pursuant to a final order or final settlement award that reinstates the employee to the employee's former position or comparable position without interruption or loss of time, or awards an employee additional compensation for a period of contributing service, shall be reported and paid as follows:(1) For purposes of calculating contributions due under Chapter 3309. of the Revised Code, the full amount of backpay that would have been earned over the period of the reinstatement, or over the period of contributing service, shall be used.(2) The contributions shall be reported over the period of the reinstatement or the period of contributing service.(3) Contribution payments on backpay reported for prior years shall include interest on the contributions in accordance with section 3309.47 of the Revised Code.(G)(1) Prior to remitting contributions on salary, wages or other earnings where there is a question on whether such payments or earnings are "compensation," the employer shall request in writing a determination by the retirement board.(2) The retirement board shall give the employer written notice of its determination.(3) If the employer fails to request a prior determination and the retirement board determines that the salary, wages or other earnings are not "compensation," then any contributions received on such salary, wages or other earnings shall be deemed unauthorized and shall be refunded.(4) If the employer fails to request a prior determination and the retirement board determines that the salary, wages, or other earnings are "compensation," then the retirement board may certify for collection pursuant to sections 3309.47 and 3309.51 of the Revised Code the amount of contributions not remitted. Replaces: 3309-1-02
Ohio Admin. Code 3309-1-02
Effective: 7/1/2025
Five Year Review (FYR) Dates: 02/01/2030
Promulgated Under: 111.15
Statutory Authority: 3309.04
Rule Amplifies: 3309.01, 3309.47, 3309.49
Prior Effective Dates: 12/24/1976, 06/25/1986 (Emer.), 09/18/1989, 02/06/1998, 05/14/2005, 04/02/2010, 04/01/2013, 03/30/2015, 04/17/2015 (Emer.), 07/27/2015