Welcome to the Frequently Asked Questions section. This page is designed to provide additional information to employers in the form of a Q and A, using real examples from employers.
If you would like to submit questions for use in a Q&A, or would like to suggest ideas for other topics to consider, please contact us.
Many employers utilize seasonal employees. For PERA purposes, a “seasonal position” means a position where the nature of the work or its duration is related to a specific season or seasons of the year. Among some of Minnesota’s traditional seasonal jobs are plowing snow, maintaining parks or roads, and operating outdoor skating rinks, ski lodges, golf courses, or outdoor swimming pools. In addition, the PERA law specifies that coaches of athletic activities are also considered to be seasonal positions.
Before January 1, 2015, if a single employee held more than one seasonal position with an employer, all of the positions that meet PERA’s definition of seasonal were excluded. Similarly, if an employee held both a seasonal position and a part-time permanent position, eligibility for PERA membership was based on the facts of each separate position.
No. A paraprofessional position is not seasonal in nature, as it is not related to a specific season or seasons of the year. The position may require the employee to report to work for only 174 days in a school year, but the period of employment is for the 9 or 10 month school year. Moreover, PERA’s exclusion for a seasonal position requires the duration of employment to be limited by the employer to 185 consecutive calendar days or less in each year of employment. This is approximately 6 months, give or take a few days. The duration of the employment starts the first day the employee works and every subsequent calendar day is counted, regardless of whether the employee actually works on that day.
No, the employee’s coaching pay is subject to PERA deductions as of Jan 1, 2015 because the coaching job is not the sole position with a single employer.
Project the total earnings from both positions for the next 12 months to determine whether the employee’s gross pay is anticipated to exceed the $5100 annual threshold. If it is, enroll the employee when the attendant position begins.
No. If the original employment dates fit PERA’s definition of a seasonal position, you must review the earnings of the employee once you know that the term of employment will exceed 185 days. If you anticipate that the employee will exceed the annual earnings threshold, you must complete the PERA enrollment immediately. Do not wait until 185 days has passed; the seasonal exclusion becomes invalid at the time it is known that the position term will be extended beyond 185 days.
When someone holds consecutive seasonal positions, eligibility is dependent on the length of the break between the two positions.
If there is a 30-day (or more) break between them, the 185-day window ‘resets’ and you look at the duration of each position independently. For example, if the first position had an employment period of 120 calendar days, a break of 45 days occurred and then the employment period for the second seasonal job was 185 days, the employee is excluded from PERA under two separate seasonal employee exclusions.
On the other hand, if the break between the two positions is not less than 30 days, the 185-day window continues. Example: the first position is 120 calendar days. A 15 day break occurs before the person is hired to a second seasonal job that will last 185 calendar days. In this case, you must make an eligibility determination based on anticipated annual earnings because you know that the total employment period (position 1 plus position 2) will extend beyond the 185 calendar days allowed under the seasonal employee exclusion. If the annual earnings are expected to exceed the threshold, enroll the employee at the start of the second position.
If the seasonal work is the employee’s only employment with your agency, it is possible this could be treated as two separate seasonal positions. You must look at the length of the break between the two positions. If there is at least a 30-day break between the end of snow-plowing and the beginning of road-grading (and then again between when the road-grading ends and snow-plowing begins again), then you can consider each a separate seasonal position.
However, if one or both of the breaks are less than 30 days, you must review the earnings of the employee and enroll him/her immediately if annual earnings are expected to exceed $5100. You should also ensure that the person is an employee rather than an independent contractor. For information on this, refer to the Independent Contractor or Employee Brochure and Worksheet.
The eligibility of Election Workers is sometimes a difficult decision. The following FAQ is designed to provide information and previously addressed situations to help with these determinations.
The term is listed in IRS Publication 15 and defined in IRS Revenue Ruling 2000-6 as follows: "Election workers are individuals who are generally employed to perform services for state and local governments (governments) at election booths in connection with national, state, or local elections." The term is to be narrowly applied and refers to services performed only at election booths. It does not include compensation earned by a worker for administrative work done at locations other than at the polling place on the day of the election. Thus duties such as mailing absentee ballots or doing administrative duties after the Election Day would not be considered pay to an election worker. Revenue Ruling 2000-6 does state that an individual who is employed as an election worker may also perform services for the government in another capacity.
Note: Although the IRS states that election worker wages is only applicable to services performed at election booths, it does also include any training undergone prior to the election.
No, (see the previous answer)
No, employees such as this do not meet the definition of an election worker under Ruling 2000-6. Wages earned for overtime is considered PERA-eligible salary.
Effective January 1, 2015, an employee who performs election activity as part of the regular duties of his/her job is not considered to have election worker status while preparing for elections or working at polling places on Election Day. The salary earned performing these duties is PERA-eligible salary.
If the election workers earn more than $1,800 in a year for the services they render, the entire amount earned as election workers becomes reportable—including the first $1,800.
PERA’s Annual Exclusion Report lists the names of all employees who worked for an employer any amount of time in the previous school or calendar year but did not contribute to PERA or another qualified pension plan.
Minnesota Statutes, section 353.27, subdivisions 10 and 11 state that all school districts and local units of government that meet the definition of “governmental subdivision” are required to submit an Annual Exclusion Report to PERA at the end of the school or calendar year.
The purpose of the report is to identify all employees and non-governing body elected or appointed public officials who do not have coverage in a PERA retirement plan or another statewide system such as the Teachers Retirement Association or the Minnesota State Retirement System. PERA reviews the reports to ensure that exclusions are applied appropriately. PERA may contact the employer with questions about a person’s exclusion from membership in a PERA Defined Benefit Plan.
Effective July 1, 2014, employers with internet and email capabilities are required to submit their Exclusion Report using PERA’s Employer Reporting and Information System (ERIS). A revised paper Annual Exclusion Report is available only to employers who are exempt from ERIS reporting.
There are two options for using ERIS to submit an Exclusion Report:
1. Use ERIS to create your own online Exclusion Report and submit it to PERA electronically.
2 . Transmit a data file that meets PERA’s File Format Specifications. This can be a text file (.txt) with fixed length fields or an Excel file. (.xlsx preferred, but .xls is acceptable).
There are errors or missing data in one or more of the lines of your report. Open the report in ERIS and check the Status column on the left. Open any lines in Error and correct the data. Once all lines of the report are fixed, the Save/Submit button will be available.
Employers who transmit a data file or create and submit a report in ERIS automatically certify the information via their ERIS login information.
For employers who submit a paper Exclusion Report, the separate Certification of Annual Exclusion Report form is no longer required as long as the person completing the form provides his or her name, job title, and daytime phone number on the Exclusion Report.
The report is due Aug. 31 of each year for school districts and February 28 for all other employers.
No. Upon receipt, PERA will review the information on your report and may contact you with questions or request additional information to determine if a person’s exclusion from PERA membership is valid. Once all follow-up (if any) is resolved, you will receive an email or letter confirming that your Exclusion Report is complete.
No, a faxed copy is sufficient.
List gross earnings under each code that wages were earned. In this example, you would list both exclusion codes on the report.
Due to a change in state law, governing-body elected officials (such as city council, school board and township supervisor) are no longer required to be reported on the Exclusion Report. Employers must continue to list non-governing body elected officials (such as clerks and treasurers) on the Exclusion Report.
Yes. All employers are required to submit a report annually. If there are no excluded employees to report:
- Employers with ERIS access should log into ERIS to create an online Exclusion Report, check the box marked “No Excluded Employees/Elected Officials”, and click “Save – Submit to PERA.”
- Employers exempt from ERIS reporting should check the box on the paper form to indicate that they have no excluded employees or elected officials and return the form to PERA.
Yes. Minnesota law requires an annual Exclusion Report from every school and governmental unit that is eligible to participate in PERA. The report must provide information about all employees – including non-governing body elected officials (clerks/treasurers) – who worked during the reporting year and did not contribute to a PERA plan or other MN public retirement system. If there are no non-governing body elected officials and no employees, follow the instructions in #13 above to complete your report.
You must obtain certification and monitor the full-time student status. This can be done with PERA’s Full Time Student Exclusion form or by obtaining a fee statement which the student can generally access from the school’s website. Fee statements document the number of credits per semester and don’t require a registrar’s signature. Explain to student employees that it is their responsibility to provide you with documentation each semester. If they do not, and no other exclusion applies, contributions must be withheld until student status is verified.
Documentation of student status is to be kept by you and provided to PERA only if requested.
In this case, only the treasurer should be listed on the Exclusion Report because he/she is a non-governing body elected official who is not participating in PERA. Anyone contributing to a PERA plan should not be reported because they are not excluded. The two elected supervisors who have chosen not to participate should not be listed on the report because they are governing-body elected officials. The individual who contracts with the township to perform road grading and snow plowing is not reported because he is an independent contractor.
The Annual Exclusion Report is required by law and employers who fail to comply may be subject to a fine of $25 for each failure. PERA may also conduct a field audit to review an employer’s payroll records.
Paid Leaves of Absence
The following questions and answers are provided to help employers understand how to apply the PERA salary exclusion as it relates to paid medical, personal, parental or military leaves that began after May 23, 2013.
Yes. The 2013 law change did not alter the rules relating to reporting payments for leave time taken by members who are on a workers’ compensation leave. The 2013 law change only applies to medical leaves, personal leaves, paternity leaves and military leaves of absence.
PERA law does not define these types of leaves. Generally, PERA will look to the employer’s policies or to applicable bargaining agreements for definitions of these leaves.
Yes. It is in Minn. Stat. § 353.01 Subd. 16(a)(8).
No. The $640 is less than 50 percent of her normal biweekly pay of $1,600 and is based on 32 hours of sick leave usage rather than the 80 hours the employee normally worked. The amounts paid to the employee during the leave period are not PERA-eligible salary.
No. The salary threshold only applies to leaves of absence with pay. This employee is drawing wages for two days of actual work and then has no pay for the remainder of the pay period. All of the employee’s pay is subject to PERA deductions.
No. The wages or salary earned by the PERA member after his or her return to work following a leave are subject to mandatory PERA contributions.
No. If you allow the employee to spread out her leave accruals in order to draw biweekly pay of only $200, rather than her normal $800, the compensation you pay to her during the leave period will not be subject to PERA contributions.
PERA deductions are required on the earnings that an employee has based on work performed in a pay period. Having unpaid days off during a pay period does not affect the eligibility of the wages that the employee earns in that pay period.
As long as all available PTO is being used by the employee each pay period, the associated paid time off is salary for PERA purposes. All of the employee’s pay for hours worked and PTO must be reported to PERA with deductions.
Yes. Pay for actual hours worked by a member is subject to PERA withholdings.
Yes, that is correct.
PERA-covered employees will receive service credit while on a leave of absence with pay from which contributions are made to PERA. Members also earn service credits if, while drawing workers’ compensation benefits, they receive salary on which contributions are being made to PERA. Often, additional service credit may be purchased for complete calendar months in which the member did not pay PERA contributions. These purchases are described in the Building Service Credit brochure.
Annual Earnings Threshold
Effective Jan. 1, 2015, the annual earnings threshold of $5100 per year ($3800 for 9- or 10-month school year employees) replaces the longstanding monthly threshold of $425. Unless some other Minnesota law applies, PERA membership is generally required for public employees filling non-elected positions whose salary from one governmental subdivision exceeds the annual earnings threshold. To learn about the specific positions that are excluded from PERA membership, please refer to Chapter 3 of the Employer Manual.
Calendar Year Employers (non-schools), the report is generated in March for review of the previous year’s earnings.
The report lists employees who have had a full year of earnings evaluated, and did not meet the $5100 threshold by December 31. MN statute requires us to evaluate annual earnings and does not include a provision for prorating.
The eligibility of employees with a partial year of earnings below the threshold will be determined based on the following year of earnings. If they meet the threshold for earnings received the following year (i.e. between January through December), their eligibility will be validated back to their enrollment date during the partial year. If the earnings do not exceed the threshold, we will ask you to either approve a refund of all contributions made during any partial or full years, or provide additional information to support the employee’s eligibility.
Fiscal Year Employers (schools), the report is generated in August for review of the previous FY earnings. The FY report lists employees who have had a full year of earnings evaluated between the dates of July 1 through June 30, and did not meet the $3800 threshold by the end of June. MN statute requires us to evaluate annual earnings and does not include a provision for prorating.
The eligibility of employees with a partial year of earnings below the threshold will be determined based on the following fiscal year of earnings. If they meet the threshold for earnings received the following year (i.e. between July through June), their eligibility will be validated back to their enrollment date during the partial year. If the earnings do not exceed the threshold, we will ask you to either approve a refund of all contributions made during any partial or full years, or provide additional information to support the employee’s eligibility.
Once your report is submitted, PERA staff must review and approve your responses. Typically, refunds and credit memos will be issued within a few weeks if is no additional follow up needed.
The legislation that brought about the change in the membership earnings threshold also requires employers to provide a written notice to any employee who is excluded from PERA membership because the annual compensation is not expected to exceed the minimum threshold amount. The notice must be given to the excluded employee within two weeks of the date in which the employer makes the membership eligibility determination. Keep a copy of the notice in the employee’s personnel file to document the decision. Do not send a copy to PERA.
This new form is available on our website under Employers à Forms and Brochures. The form documents the eligibility decision and provides information to employees about the steps to take if they disagree with the exclusion. As an alternative to using the PERA form, an employer may create its own disclosure notice as long as the document provides information about the employee’s right to appeal the determination to PERA.
Although not required by law, employers are encouraged to use the form to provide written disclosure to ALL excluded employees at the start of employment so that the affected employees are informed about the eligibility determination.
See below for more information on the form’s use for provisional enrollment situations.
Provisional Enrollment is a new process that allows you to enroll certain members upon hire on a provisional basis rather than wait until the threshold is met and risk the possibility of an omitted deduction billing. In a provisional enrollment situation, an employer stipulates that they are unable to accurately predict whether the earnings in the coming 12 months will exceed the annual threshold.
To enroll a new employee on a provisional basis, process the enrollment as usual and provide the employee with a Notice of Non-Covered Employment or Provisional Coverage within two weeks of hire. The form is available on our website under Employers > Forms and Brochures.
PERA will monitor the earnings of all new employees and will generate a report at the end of each fiscal and calendar year to identify members who have had a full year of employment with a single employer, but have not met the annual salary threshold. At that time, we will contact employers to determine whether the enrollment was invalid and if a deduction-in-error refund is appropriate.
Employees hired mid-year will not be included on the report for the first (partial) year because a full year of earnings is needed to determine whether the threshold was met. As such, an employee’s enrollment may remain provisional for well over a year to allow for us to collect sufficient earnings data.
This is an annual report. The annual reports will be provided approximately 2-3 months after the calendar or fiscal year ends.
To determine whether a new employee will meet the earnings threshold, calculate the gross earnings projected in the next 12 months. For employees with a regular schedule, this is hourly wage x number of hours worked per week x number of weeks worked per year.
When an employee’s schedule is less certain, refer to internal documents that help define job factors such as pay and work schedule, which may be found in job announcements or budget documents. Past experience with other employees who have held that same position could also help to estimate the annual salaries of employees.
The $5100 annual threshold is the general rule. The only exception is for employees whose work is limited to the 9/10 month school term. Those employees have an annual salary threshold of $3800.
General Scenarios Regarding Money and Earnings
No. Although the $425 per month threshold ended 12/31/2014, eligibility that was established under that guideline remains in effect. An employee who was a member of PERA on Dec. 31, 2014, based on employment that had previously qualified for coverage under a PERA Defined Benefit Plan (DBP) retains that membership for the duration of the person’s employment in that position.
The annual earnings threshold replaces the previous $425/month threshold. As such, earning more than $425 in any one month does not qualify an employee for PERA coverage – only the total annual earnings can. You may wish to keep an eye on the employee’s earnings to confirm that he or she isn’t on track to go over the threshold.
No. The PERA membership is valid because the employee was hired to a position that was stipulated to provide an annual salary in excess of $5100. She may apply for a refund, but the employer contributions remain with PERA.
General Scenarios Regarding Date and Time
While not common, there are times when an employee’s PERA membership may be valid even though PERA’s records do not indicate that their annual earnings exceeded the annual threshold. Examples:
- PERA records have only a portion of the employee’s earnings for the year
There is a period during the applicable calendar year in which the employee had earnings that were excluded from PERA membership and when all earnings are totaled, the employee meets the salary requirement. This can occur in these situations:
Employee is a seasonal worker who was not expected to work more than 185 consecutive days. However, the employment was extended beyond 185 days and earnings from that point forward were reported to PERA. When the amount of excluded earnings is added, the total annual earnings exceed $5100 (or $3800) for the year, making the employee’s PERA membership valid.
- The person terminated employment and only worked a partial year
The employee was expected to earn more than the PERA threshold amount during the year, however, he/she terminated employment and only worked a partial year. If the person’s employment had not ended before the end of the year, the employee’s earnings would have exceeded PERA’s Annual Threshold. (In this situation, the employer did not report the date of termination to PERA prior to the date the Annual Salary Threshold report was prepared).
Enroll the employee immediately. When you complete the enrollment, list the actual hire date, the date of eligibility (the effective date of enrollment) and the exclusion code that was used between hire and enrollment (302 for earnings under $3800 or 303 for earnings under $5100). PERA will request the employee’s earnings during the year in which the membership threshold was exceeded and, where applicable, will generally bill omitted deductions. Limited exceptions may apply.
For omitted deduction billings, the employee pays member contributions on the most recent 60 days. If the period of omission is greater than 60 days, any remaining omitted employee deductions must be paid by the employer. The employer is also obligated to pay the omitted employer contributions for the full period and annual compound interest.
Enroll the employee. The eligibility decision is based on anticipated earnings in the upcoming 12 month period rather than the remaining months in the calendar or fiscal year.
PERA has developed a Membership Eligibility Checklist that may help when making eligibility determinations. To access the form, visit the Employers > Forms and Brochures page on our website.
When there is a change in an employee's position, always review for eligibility. Calculate his expected earnings 12 months from the start date of his new position using the pay rate and scheduled hours of the full-time job. If the anticipated earnings exceed the annual threshold, enroll him as of the date the new position begins.