FAQs for Executive back pay
Note: This document includes questions and answers that were developed in collaboration with OCHRO, PSPC and the Association of Professional Executives of the Public Service of Canada (APEX). It will be updated as new Q&As are developed. You are encouraged to visit this page on a regular basis.
Updated on: May 28, 2020
1. Who is eligible for the salary revisions?
You are eligible for the salary revisions if you were an employee in the Executive (EX) Group or acting in an EX position in the core public administration (CPA) between April 1, 2014 and March 31, 2018.
If you are or were an employee in a group and level that mirrors the terms and conditions of employment of the EX Group, please confirm with your human resources advisor whether you are eligible for these increases.
You are not eligible for the salary revision for a fiscal year if you obtained a performance rating of ‘Did Not Meet (Level 1)’ for that year’s performance cycle.
2. What are the effective dates of the economic increases?
The Government of Canada approved annual salary revisions for each of the fiscal years 2014-15 to 2017-18 for executives in the core public administration.
3. What are the effective dates of the economic increases?
The increases are as follows:
- 0.75% effective April 1, 2014;
- 0.75% effective April 1, 2015;
- 1.25% effective April 1, 2016;
- 1.25% effective April 1, 2017; and
- 1.0% wage adjustment on April 1, 2016.
The government is applying equivalent pay increases for unrepresented executives as are negotiated for represented public servants.
4. How will the salary revisions and retroactive payments be completed?
For departments served by the Miramichi Pay Centre, salary revisions will be prioritized as follows:
- Group 1:
- EXs who were active on or after April 1, 2018
- non-executives who acted in executive positions on or after April 1, 2018
- Group 2:
- EXs who were active between April 1, 2014 and March 31, 2018 and who were inactive (retired, resigned, terminated, deceased) as of April 1, 2018
- non-executives who acted in executive positions between April 1, 2014 and March 31, 2018 and who were no longer acting executives or active EXs on or after April 1, 2018
- Departments with their own compensation advisors may have established the same prioritization. If you are currently an employee or retired from a department that is not served by the Pay Centre, you may wish to contact them for status update. A complete list of departments served by the Pay Centre can be found here.
5. What is the current status of the salary revisions and retroactive payments?
The Pay Centre confirms that salary revisions and retroactive payments for Group 1 were completed in 2020. The processing of salary revisions and retroactive payments for Group 2 started in spring 2020. The Pay Centre is targeting to issue all payments to these former Executives by the end of 2020.
Departments not served by the Miramichi Pay Centre and who have their own Compensation Advisors are completing their salary revisions according to their own internal timelines. Former Executives who ended their employment prior to April 1, 2018 in non-Pay Centre departments and have not received retroactive pay are encouraged to contact their former departments.
6. I am a retired executive, so I am identified as being part of Group 2. How will I be able to track the status of the processing of retroactive payments?
The Pay Centre is targeting to issue all payments to Group 2 by the end of 2020. Updates on progress will be communicated by APEX, as required.
7. Will my salary for the period 2014-2018 be recalculated?
Yes, the salary revisions are retroactive. Your salary for each of the four fiscal years between April 1, 2014 and March 31, 2018 will be revised and the adjustments will be calculated as if the salary revisions had been approved on the effective dates.
The retroactive payments will be based on the amount of time you were in an Executive (EX) Group position during each of the four years. Please note that you are not eligible for the salary revision for a fiscal year if you obtained a performance rating of ‘Did Not Meet (Level 1)’ for that year’s performance cycle.
8. Will the economic increase affect the executive performance pay?
Yes, since performance pay is calculated as a percentage of salary, your performance pay will be recalculated based on your revised salary on March 31 for each of the four cycles.
9. Can I get amended T4s for the period covering these economic increases and can I refile my taxes based upon the year that I earned the economic increase to my salary?
Employment income is based on amounts you are paid and receive in a calendar year, regardless of when the work was performed. Therefore, amounts paid to you in 2020 will be reported on your 2020 T4 even if they relate to periods covering 2014-2018. An amended T4 will not be issued for those years.
10. At what rate will the back pay be taxed?
Depending on the income you received for the current year and the tax table that corresponds to the province where you lived on December 31 of the year.
The first thing to do is to check the tax rate versus your salary. Refer to the tax table. Then add salary arrears from 2014 to 2018 to your 2019 or 2020 salary. You will then be able to see if you fall into a new tax bracket.
Canadian income tax rates for individuals: https://www.canada.ca/en/revenue-agency/services/tax/individuals/frequently-asked-questions-individuals/canadian-income-tax-rates-individuals-current-previous-years.html
11. As there will be deductions for superannuation from the back pay, how will this affect my registered retirement savings plan (RRSP) and the room I have to contribute?
Earnings in relation to these contributions will be included in the pension adjustment (PA) calculated for the year when the retro payment amount is received. This amount will be reported in box 52 of your T4 for that year.
The PA represents the value of the benefits you earned during the year under your employer-sponsored pension plan. Your PA will reduce your RRSP deduction limit for the following year.
12. How will this economic increase affect an executive who is currently drawing a pension? What about for one who is about to retire?
Once the retroactive amounts owing to you are paid, your pay file will be updated and this information will be transferred to the Government of Canada Pension Centre, where pension payments made to you for the corresponding period will be re-calculated and processed. If you are about to retire, your pension will be adjusted once the Government of Canada Pension Centre receives your updated salary history.
13. Over the period covered by the retroactive payment I have cashed out some excess vacation leave. Will the value of these amounts I received be adjusted as well?
The adjustments will be calculated as if the salary revisions had been approved on the effective dates. Therefore, the value of your cashed-out leave will be recalculated.
14. During the period covered by the retroactive payment I received disability insurance payments. Will these payments also be adjusted retroactively to reflect the new rates of pay for that same period of time?
The adjustments will be calculated as if the salary revisions had been approved on the effective dates. Therefore, the value of your disability payments will be recalculated.
15. During the period covered by the retroactive payment I took maternity/parental leave. Will the top-up of my Employment Insurance Benefit payments be adjusted retroactively to reflect the new rates of pay for that same period of time?
The adjustments will be calculated as if the salary revisions had been approved on the effective dates. Therefore, the value of your maternity leave top up payments will be recalculated.
16. Will the adjustment of the base pension be made at the same time as the payment of owed back-pay?
No. Adjustments to your base salary and pension are handled separately. Once any retroactive payments owing to you are paid, your updated salary information will be provided to the Government of Canada Pension Centre, where your pension history will be amended to reflect any changes in salary and the corresponding adjustment to any pension amounts paid.
17. What services are available to retired executives requesting clarification regarding their receipt of back pay or a review of their pay file?
Former executives who ended their employment in a department served by the Pay Centre can contact the Client Contact Centre.
In Canada or the United States: 1-855-686-4729
Outside Canada and the United States: 1-506-424-4330
Hours of operation: Monday to Friday (excluding statutory holidays), 7 am to 7 pm eastern time.
Former Executives who ended their employment prior to April 1, 2018 in non-Pay Centre departments can contact their former departments.
18. When will the next Economic Increase be implemented that will cover the period starting 1 April 2018?
TBS will inform the executive community once decisions are taken on economic increases for executives for 2018-2019 and beyond.
19. Where can I go if I need support from Canada Revenue Agency (CRA)?
Executives can consult CRA’s website at: https://www.canada.ca/en/revenue-agency/campaigns/about-canada-revenue-agency-cra/frequently-asked-questions-tax-implications-phoenix-payroll-issues.html
20. I was appointed to an EX-01 position in 2016. My initial salary as an executive was determined on the basis of expired rates of pay for a collectively bargained group that subsequently signed a new collective agreement resulting in an increase for that group’s salary structure. Will my initial salary on appointment as an executive be re-calculated on the basis of the increase to the non-executive group’s salary structure and again as a result of the new executive rates of pay?
Yes, your salary on appointment to the EX group will be reviewed and recalculated (as needed) in light of the collectively bargained group’s new salary structure and again, on the basis of the new EX group rates of pay.
21. I am retired and expect to receive a payment related to my employment during the retroactive period. I am no longer receiving bi-weekly pay cheques, so I was wondering, how will I receive any monies owing?
If your Direct Deposit account is still active in the Phoenix system, you will be receiving the payment to that bank account. If you retired from a department served by the Pay Centre and have changed your banking information since retirement, you should let the Pay Centre know as soon as possible. If you retired from a department not served by the Pay Centre, you should let your former department know as soon as possible.
If your Direct Deposit Account is inactive, you will receive a paper cheque to your home mailing address. Please advise the Pay Centre or your former department of any changes to your mailing address.
22. I received a severance payment during the period covered by the salary revisions. Will my severance payment be adjusted to reflect the new rates of pay?
Yes, severance payments will be adjusted. Retroactive remuneration is paid in an amount equal to what would have been paid to the executive had the revision been approved on the effective date.