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ORDINANCE NO. 422O0
AN ORDINANCE of the City of Port Angeles
repealing Ordinance No. 2056 with re-
ference to the exclusion of sick leave
payments from social security taxation.
WHEREAS, the President of the United States signed
H.R. 4331 into law on December 29, 1981; and
WHEREAS, H.R. 4331 eliminates the exemption which pre-
viously allowed payments made on account of an employee's illness
to be excluded as taxable wages under Federal Old Age and Sur-
vivors Insurance;
NOW THERFORE, THE CITY COUNCIL OF THE CITY OF PORT
ANGELES DO ORDAIN AS FOLLOWS:
Section 1. Ordinance No. 2056 is hereby repealed.
PASSED by the City Council of the City of Port Angeles
at a regular meeting of the Council held on the (6.8L day of
1982.
ATTEST: -
Marian C. Parrish, City Clerk
APPROVED AS TO FORM:
Craig . Miller, City Attorney
PU: TSHED:��
MEMO: February 10, 1982
TO: Dave Flodstrom, Mayor Duncan and
FROM: Rob Orton, Director of Finance and
mbers
inistrative Services
RE: Exemption of Sick Leave Payments from Social Security Taxation
Recently, Federal action taken to bolster the Social Security system
included eliminating the exemption from taxation of payments munici-
palities made for employee sick leave. The exemption was granted
municipalities about three years ago and we implemented a procedure
to enact it. The law essentially exempted about 95% of our sick
leave payments from Social Security taxation and this measure saved
the City about $11,000 a year since we began taking advantage of it.
Unfortunately, a partial solution to the Social Security woes causes
another problem for others: discontinuance of the sick leave exemption
will cost the City of Port Angeles between $12,000 and $15,000 in 1982.
It should be noted that this expense is not provided for in the 1982
budget.
The attached ordinance repeals Ordinance 2056 which established the
sick leave exemption some time ago.
Thank you.
EMPLOYMENT SECURITY DEPARTMENT
OASI - TAX BRANCH
OLYMPIA, WASHINGTON 98504
January 4, 1982
SPECIAL NOTICE
PLEASE NOTE, THIS IS A CHANGE IN LAW:
It is very important that this memo be routed to the person who is re-
sponsible for payroll preparation and reporting of social security con -
tributions and wages.
This is to advise you, at the earliest possible date, of a change to social
security reporting requirements effective January 1, 1982. H.R.4331, as
approved by both the House and the Senate, was signed into law by the
President on December 29, 1981. This law removes the present exemption
from OASI contributions, of sick pay received by an employee during the
first six months, under an approved plan or system. Explicitly, all sick
pay to an employee during the first six months of illness is reportable for
social security purposes and contributions are payable on such pay.
It should be noted, however, that payments received under worker's compensation
laws are not affected.
Any questions regarding this notice should be directed to the OASI Section,
(206) 753 -5178.
PRATIBHA RAJPAUL
State OAST Administratrator
JAN