Pay Administration

WHAT

PAY ADMINISTRATION POLICIES
TVA's employee pay administration policies and practices are based on:

TVA Board approved compensation plans
Federal laws and regulations.
Negotiated labor agreements.

WHEN EMPLOYEES WAGES AND SALARIES ARE PAID
All employees are paid biweekly.

DEDUCTIONS FROM PAYCHECKS
Some deductions from employees' pay are mandated by federal or state laws, while others are voluntary.

ELECTRONIC FUNDS TRANSFER (DIRECT DEPOSIT)
Employees hired on or after July 26, 1996, are required by federal law to receive wage/salary payments by electronic funds transfer, unless they certify in writing they do not have a bank account.

Any employees hired before July 26, 1996, are encouraged to arrange for direct deposit of their net earnings into the financial institution of their choice.

TIMING OF DEPOSIT
Deposits are sent in time to reasonably assure delivery to the financial institution on pay day, or the first business day following an observed holiday which falls on a pay day.

WHO

All employees.
All personal services contractors with an employee/employer relationship.

WHY

TVA is required by law to make deductions from employees' pay for federal and state income taxes and Federal Insurance Contribution Act (FICA) taxes.

TVA allows employees to make voluntary deductions and federal law requires direct deposit for wages/salaries, expense reimbursement, and benefits payment paid by TVA (including tuition, Live Well, and professional fees reimbursement) to save time, reduce TVA cost, and for the convenience of employees.

HOW

PAY CAP
No TVA employee can receive a salary in excess of that received by a Board member.

OVERTIME
Employees classified as non-exempt under the Fair Labor Standards Act (FLSA) must be paid overtime at the time and one-half rate for all hours worked over 40 hours in a work week. In addition, negotiated overtime policies may require payment which exceeds the FLSA standards. Those negotiated provisions vary according to the employee’s position. General guidelines follow:

Represented Salary Policy Employees
Inflexible Work Schedule employees normally have no discretion to modify regularly scheduled hours of work. Such employees generally receive overtime pay for work in excess of 40 hours per week or scheduled straight-time hours per day.

Flexible Work Schedule exempt employees are expected to work overtime with no additional pay when the overtime hours are casual, inherent to the job or self-imposed. Based on business needs or when it is not feasible to use compensatory time within a reasonable period, management may temporarily place a flexible schedule exempt employee on the inflexible schedule. When this occurs, overtime is paid at the overtime rate in the applicable labor agreement.

Additional information related to Salary Deductions - Exempt Employees is included in Employment Practice 8, Fair Labor Standards Act.

Trades and Labor and Teamsters Employees
Trades and Labor and Teamsters employees generally receive overtime pay for authorized time worked outside of their regularly scheduled shift during any 24-hour period, or outside of their regularly scheduled hours during any calendar week. Specific overtime provisions are contained in negotiated labor agreements or the approved menu of alternative work schedules.

Management and Specialist Employees
Management and Specialist exempt employees are expected to work overtime with no additional pay when the overtime results from the normal requirements and responsibilities of their positions. However, overtime pay for some Managers and Specialist employees may be authorized under certain circumstances by the organization's Vice President, at either the straight-time or time-and-a-half rate.

REPRESENTED EMPLOYEES PREMIUM PAY
Represented employees receive premium pay as negotiated in the applicable labor agreement.

DEDUCTIONS
Deductions are noted on the Earnings and Deductions Statement that employees receive with their paychecks or can view online via the intranet self-service facility. Deposits and deductions must be authorized by the employee. Most forms employees need for mandatory or voluntary deductions are available through their human resource office, the electronic forms facility, or Employee Accounting.

Mandatory Deductions
These deductions include:

Federal Income Taxes.
FICA Taxes.
Civil Service Retirement Systems (CSRS) or Federal Employee Retirement System (FERS) Contributions*.
State Income Tax.

* CSRS or FERS deductions apply only to those employees who transfer to TVA from positions in other federal agencies that are covered by the CSRS. Certain employees who remain with the CSRS will not have the Social Security portion of the FICA tax deducted from their pay; however, the Medicare portion of the tax will be deducted.

Voluntary Deductions
These deductions include, but may not be limited to:

Medical Insurance.
Dental Insurance.
Employee Life Insurance.
Spouse and Dependent Life Insurance.
Employee Accidental Death and Dismemberment Insurance.
Spouse and Dependent Accidental Death and Dismemberment Insurance.
Optional Long-Term Disability Insurance (Salary Policy employees only).
Retirement Savings Plans.
Long Term Care.
401(k) Plan.
Savings Allotments.
Combined Federal Campaign.
United States Savings Bonds.
Union Dues.
Van Pool.
Flexible Spending Accounts.
- Health Care Account.
- Dependent Care Account.

Details about the various deductions can be found in the Payroll manual.

DIRECT DEPOSIT
Forms and instructions for authorizing direct deposit of net earnings are available from any human resource office or Employee Accounting.

ROLES

All Employees

Complete appropriate forms (SF1199A) to initiate direct deposit and change or delete desired deductions.
Submit completed SF1199A to appropriate financial institution and provide TVA Employee Accounting with a copy.

Supervisors

Approve employee time reports.
Assist employees with obtaining and properly completing necessary pay-related forms.

Human Resource Managers/Officers

Create employee records in the Human Resource Information System data base, which are used by the Employee Accounting department to initiate employee pay records.
Serve as sources of forms.
Assist employees in completing forms.

Organizations

Responsible for the day-to-day pay administration of the Manager and Specialist Compensation Plan.

Employee Accounting

Calculates employees' "gross to net" pay.
Collects, reports and remits all voluntary and mandatory deductions to the proper government agencies and benefit carriers.
Administers the agency time-reporting system.
Administers all employee reimbursements and receivables.
Generates payroll data for all TVA business offices and employees.
Maintains pay records.
Develops, maintains and interprets accounting procedures related to pay and employee deductions.
Distributes all pay and Earnings and Deductions information.
Processes electronic payments for direct deposit of employees' net earnings.
Processes U.S. Savings Bonds deduction forms.

Labor Relations

Negotiates and advises on provisions of labor contracts.

Compensation Staff

Recommends pay schedules for management, specialist and excluded positions.

Board of Directors

Approves all new pay rates and incentive plan payments prior to implementation.

RESOURCES

Human Resource Service Managers/Consultants
Employee Accounting Staff
Labor Relations Staff
Compensation Staff
Human Resources Information Services

This practice is based on various Board actions and negotiated labor agreements.

EMPLOYMENT
PRACTICE 4

Pay Administration

Last Revised 06/2005