Procedures for making damage payments for services performed prior to signing the State Oath of Allegiance.
Summary of University of California Policy AM-P196-21
It is the policy of the University of California to make a damage payment to an employee who, without knowledge of the State Oath of Allegiance requirement, performs services for the university prior to signing the State Oath of Allegiance. A damage payment constitutes a settlement of an employee's claim based upon services rendered. Please refer to the complete policy (AM-P196-21: Damage Payments for Services Performed Before Loyalty Oath is Signed) for more details.
Damages may be claimed where all of the following conditions are met:
- The employee entered into university employment in good faith, with no knowledge of the State Oath of Allegiance requirement.
- The employee would have executed the State Oath of Allegiance prior to commencing university employment had the university advised the employee of the requirement to sign the Oath.
- The employee did, in fact, sign the State Oath of Allegiance upon learning of the requirement.
The following procedures must be followed before a damage payment may be made:
Employee: The employee must submit a claim for a damage payment to the employing department.
Department: Complete all fields on the Damage Payment Report indicating the gross amount to which the employee would have been entitled if the employee had been in the payroll system with an active employment status. The Human Resources Partner/Representative or other authorized designee must sign the Report. The Assistant Vice Chancellor of Human Resources must approve any damage claims that are more than 120 days.
- Obtain a signed State Oath of Allegiance from the employee.
- Obtain a completed Damage Payment Release from the employee. Signature of employee will be obtained and witnessed by Central Payroll at time of check pick up in Central Payroll Services.
- Send the completed original forms to the Central Payroll office.
- Departments are required to advise employees of the following:
- Damage payments are subject to federal, state, and FICA withholding deductions. Vacation or other benefits, not including sick leave, accrued prior to signing the Oath must be included.
- If the employee has been paid UCRP eligible salary prior to the Oath being signed, UCRP deductions made by the employee, if any, will be refunded by the Central Payroll office.
Central Payroll: Review the claim for completeness and appropriate approval before processing payment. The deductions should be made for appropriate federal and state income tax and FICA.
- If applicable, refund to the employee any contributions made to UCRP.
- Notify the department when the payment to the employee will be available.
- Retain a copy of the Damage Payment Report.
Damage Payment FAQs
- Who has to sign the State Oath of Allegiance form?
Only university employees, including staff, faculty and other academics, are required to sign the Oath.
- Who does not have to sign the State Oath of Allegiance form?
- > Visitors, volunteers, independent contractors, outside temporary agency employees, and other non-university employees.
> ANR volunteers (4-H, Master Gardener, etc).
> Permanent Resident (green card) and Non-Resident Aliens are not required to sign the Oath.
- When does the Oath have to be signed?
- > Oath should be signed by employees at the date of hire, but no later than the time at which the employee begins providing compensable service.
> Oath instructions state a new form must be signed at re-employment if the original form on file is more than one year old (from signature date).
> Separate "sign" dates can apply for Oath and Patent.
- What are the consequences for not signing the Oath?
If an employee refuses to sign the Oath, the issue should be forwarded to either the Chief Human Resource Officer or the Academic Personnel Director at the campus level for further discussion and evaluation.
The campus will still need to pay the employee for services performed during the time period the Oath was not signed.
- What are the methods of obtaining and recording the signature?
- 1. Although an in-person signature is preferable, if the individual is unable to sign in the presence of a university employee, a remote signature may be faxed or mailed along with similar on-boarding new hire documents.
2. Remote signatures should be in the presence of a notary, personal attorney, or an employee of another university, and the signature should be witnessed
- What is the tax treatment of damage payments associated with failure to sign the Oath at date of hire?
- The damage payment should be treated as wage income subject to withholding for federal and state income and FICA taxes.
- Is the damage payment in addition to any wages the employee may have been paid prior to the time when the Oath was signed?
- The "damage" payment is not intended to be in addition to any wages that may have been paid. Rather, it is meant to provide payment for services rendered during the time period the employee was working and the university failed to present the Oath to the employee for signature.
- How is pay handled in the following scenarios?
Scenario A: Employee has been working for two months and it is discovered in the third month from date-of-hire that the campus had not presented the Oath for signature. If the employee signs the Oath, pay should be handled as follows:
> For pay period paid prior to the Oath being signed, pay previously coded as "regular wages" should be reversed and recorded as damage payment by the Central Payroll office.
If the employee chose not to sign the Oath, pay should be handled as follows:
> For pay period paid prior to the Oath being signed, pay previously coded as "regular wages" should be reversed and recorded as a damage payment by the Central Payroll office.
> If employee won't sign the Oath, refer to policy at http://manuals.ucdavis.edu/ppm/380/380-60.pdf
Scenario B: Employee has been working for two weeks and it is then discovered that the hiring campus/department failed to present the Oath for signature but had the opportunity to obtain a signature on the Oath form.
> Most likely the employee had not been paid so there may not be any "regular wages" to back out or UCRP contributions to be returned.
> If the employee has been paid, for pay period paid prior to the Oath being signed, pay previously coded as "regular wages" should be reversed and recorded as damage payment by the Central Payroll office.
- How are Academic Year (AY) Faculty handled under the following scenarios?
Scenario A: AY Faculty has an appointment date of July 1, 2017. The appointment letter was not available until July 8, and the Oath was not signed until July 16, 2017. He/She is not scheduled to begin teaching until September 5, 2017. The first payment is scheduled for August 1, 2017.
> The Oath should be signed as soon as possible. However, if the Oath was signed on July 16, and sevices did not begin until September 5, and the first paycheck received on August 1, a damage payment is not required.
Scenario B: Same as above, but the faculty began teaching on July 1, 2017.
> Campus should make a good faith effort to obtain a signature on the Oath as soon as possible. The facts and circumstances of each case should be reviewed to determine whether a signature was obtainable before services were performed and whether or not a damage payment is appropriate for the period covering July 1-15.
Scenario C: How are interim offers handled (i.e. the period where a tentative offer letter was issued but the academic is going through peer review process before a formal offer letter is issued)?
> If the academic employee has not provided services nor been paid, a damage payment is not owed. The Oath should be signed as soon as possible after a formal offer letter has been provided but before services and/or payment has been made.