Agenda - Council - 03/11/2014 - Laserfiche WebLink

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Definition of an Accountable Plan: Amounts paid under an accountable plan are not considered income to the employee if the following conditions must be met: 1) Must be a business condition for the expense, 2) Must substantiate expenses, and 3) Must return to employer amounts in excess of substantiation. However, clothing items that are considered "adaptable to general usage as ordinarily clothing" (such as a polo shirt with City logo) ARE taxable to the employee. A non -accountable plan does not meet all three requirements and is considered income to the employee --as the stipend would be taxed, but would be far less work administratively for the Finance Department (no tracking of receipts, no sifting through receipts to determine if the item is taxable or not, and no need for the employee to return their worn out clothes to the City). Observations/Alternatives: Option #1: Staff recommends authorizing the LELS-Patrol, LELS-Sergeants, and AFSCME M.O.U.; as well as authorizing the same stipend amounts for applicable non -union staff in Public Works and the Police Department. Option #2. Maintain the current practice. Staff does not recommend continuing the current practice. The current practice falls outside of the IRS guidelines and may result in penalties and the need to reissue corrected W-2s. Option #3: Direct staff to renegotiate. Staff does not recommend this option. This MOU will sunset on December 31, 2014 -- the City Council could direct staff to include this topic beginning with the next contract. Funding Source: There is no additional funding required. Recommendation: Staff recommends authorizing the LELS-Patrol, LELS-Sergeants, and AFSCME Uniform M.O.U.; as well as authorizing the same stipend amounts for applicable non -union staff in Public Works and the Police Department. Action: Motion to Adopt Resolution #14-03-058 Approving an M.O.U. for Uniform Stipends with LELS and AFSCME and to Approve a Non -Union Uniform Stipend Attachments IRS Document Resolution 1403058 LELS Sergeants MOU LELS Patrol MOU AFSCME MOU Form Review Inbox Reviewed By Date Kurt Ulrich Colleen Lasher 03/06/2014 12:38 PM Colleen Lasher (Originator) Colleen Lasher 03/06/2014 12:39 PM Kurt Ulrich Kurt Ulrich 03/06/2014 03:39 PM Form Started By: Colleen Lasher Started On: 03/05/2014 10:39 AM Final Approval Date: 03/06/2014