19GE5021R0107_0001 Q and A.pdf

Payroll & Salary Computation Outsource

US Embassy Berlin, Germany 19GE5021R0107_00001

Questions and Answers (Q&A)

RPSO has received the following eleven (11) questions (Q) and is hereby providing the following answers (A).

1. Q: On page 8 of Scope. You state “the US mission to Germany, as a diplomatic mission, has operational conditions that differ from those of local employers will have to be considered” Can you provide specific examples of what some of these differences are?

A: Please refer to Item 1.1. of Section “Start-Up” under Statement of Work (copied here for easier reference:

• 1.1 Salary payments are made on a bi-weekly basis (“Pay Periods”); these Pay Periods do not coincide with calendar months but regularly cross over the end and beginning of a month.

• In accordance with §28 m SGB IV, Sub-Section (1), the USG transferred responsibility for payment of social security contributions to the GSSS to its LE Staff the employees. The U.S.

Mission thus does not fulfill employer obligations per §28e SGB IV, Sub-Section 1, Sentence 1 and pays the LE Staff without such deductions. Instead, the USG transfers the employer’s share of the GSSS to the LE Staff together with their bi-weekly salary payments; the LE Staff are required to pay the contributions to the Health Carriers. The USG will not change that procedure.

• While the vast majority of the LE Staff are fully subject to the GSSS, there are groups who are partially subject to different requirements. A group of approximately 188 LE Staff of the 698 are subject to the U.S. Federal Insurance Contributions Act (FICA); the majority of employees in this group are also subject to U.S. income tax. Both liabilities are deducted at source; the Contractor shall only handle the employee’s liabilities vis-à-vis the GSSS:

o The aforementioned group of employees are enrolled only in FICA; they do not additionally participate in the German old age insurance system;

o For this group, participation in the Health and Care insurance scheme are voluntary; if they opt for health insurance, the employees are allowed to take out private health insurance regardless of whether they meet the local ceiling requirement otherwise required for eligibility;

o The employees must participate in the German unemployment insurance.

• A very small group of staff (<20) has a private old age insurance in lieu of being enrolled in the mandatory old age pension system. The Contractor shall need to be able to handle those cases.

https://www.sozialgesetzbuch-sgb.de/sgbiv/28m.html https://www.gesetze-im-internet.de/sgb_4/__28e.html#:~:text=%C2%A7%2028e%20Zahlungspflicht%2C%20Vorschuss,Deutsche%20Rentenversicherung%20Bund%20zu%20zahlen

• Each LE Staff member has his/her own employer identification number (Betriebsnummer) due to the fact that LE Staff are considered self-payers (Selbstzahler). To address this issue, the U.S.

Mission will be able to obtain dummy employer identification numbers for each post.

• The actual payroll processing and initiation of salary payments to the LE Staff will be handled by the State Department payroll center, the Global Financial Service Center (GFSC) in Charleston, South Carolina, USA.

• The State Department has a specifically designed internal time and attendance reporting and administration system. The U.S. Mission will be required to continue to use the system: the

Customer thus will prepare certain steps of the process in that system, turn the product over to the Contractor who will handle the scope of work defined in this SOW, and return the results to the Customer for further use.

2. Q: On page 9 of Scope. You state” In accordance with §28 m SGB IV, Sub-Section (1), the USG transferred responsibility for payment of social security contributions to the GSSS to its LE Staff the employees. The U.S. Mission thus does not fulfill employer obligations per §28e SGB IV, Sub- Section 1, Sentence1 and pays the LE Staff without such deductions. Instead, the USG transfers the employer’s share of the GSSS to the LE Staff together with their bi-weekly salary payments the LE Staff are required to pay the contributions to the Health Carriers. The USG will not change that procedure “

Does the indicate the employees are paying their own social contributions security and will continue to do so, instead of being directly paid by the employer?

A: Correct.

3. Q: Page 10 section 2.2. Can you please provide an example of the reports needed or share which fields of data you wish to report on? The purpose of asking is to understand the amount of time needed to create the report.

A: We will require the amounts of the social security contributions for the four German social security area Rentenversicherung (old age pension insurance), Krankenversicherung (health insurance), Arbeitslosenversicherung (unemployment insurance), und Pflegeversicherung (care insurance) for each employee to be able to inform our payroll center in Charleston as to which amounts they have to transfer to the employees so that they, in turn, can transfer employer’s and employee’s share to the social security system.

4. Q: Page 11 section 2.7. Can you provide an example of the annual report? The purpose of asking is to understand the amount of time needed to create the report.

A: Attached please find an anonymized excerpt from the latest annual report.

Our proposal is that we would pull the January 1, 2022, from our system which should still exist by that time and provide that excel spreadsheet to the vendor as a “starter tool”. Changes to an employee's family status, workweek hours or salaries will have to be reported by us to the vendor.

The regular change will affect the salaries that are used to establish the latest creditable salary (average of the last five salaries in effect on January) in that the newest salary replaces the oldest.

Example:

Creditable Salary 2020 was average of Jan 1 salaries in 2020, 2019, 2018, 2017, 2016; Creditable Salary 2021 is average of Jan 1 salaries 2021, 2020, 2019, 2018, 2017 (2016).

5. Q: How shall German social security contributions be delivered to the German health insurance funds in the future? Continue to go through each individual employee including employer match being paid out to employee? Or can a process be jointly developed so that the payments are made directly from the different embassy branches to the health insurance funds (i.e. separate company number for each embassy branch with employee contributions being withheld from the employees and remitted to the health insurance funds together with the employer’s match)?

A: See response to Q 2 above and below excerpt from Section 1 of the Statement of Work: we will continue the current practice as per which the social security contributions are to be made by the employees. That is, the employees receive their salaries plus the employer’s share to the German social security system.

Excerpt from Statement of Work:

In accordance with §28 m SGB IV, Sub-Section (1), the USG transferred responsibility for payment of social security contributions to the GSSS to its LE Staff the employees. The U.S.

Mission thus does not fulfill employer obligations per §28e SGB IV, Sub-Section 1, Sentence 1 and pays the LE Staff without such deductions. Instead, the USG transfers the employer’s share of the GSSS to the LE Staff together with their bi-weekly salary payments; the LE Staff are required to pay the contributions to the Health Carriers. The USG will not change that procedure

6. Q: Are there any special arrangements between the U.S. Embassy and health insurance companies? If so, can you please send us these arrangements or inform us about the content of this arrangements?

A: The transfer of responsibility for payment of social security contributions to the German system is covered under 28m SGB IV, Sub-Section (1).

With regard to other employer responsibilities such as reporting vis-a-vis health carriers the health carriers have been handling those via tacit understanding; there are no official agreements in place.

7. Q: Should contribution declarations continue to be filed using employees' individual company numbers? Or can a process be developed here that the registration of the contribution statements takes place under company number(s) of the employer (the US Embassy institutions)?

A: The Mission has already addressed this issue with the authorities as we understood this fact to be a major hindrance. Please refer to Item 1.1. of Section “Start-Up” under Statement of Work (copied here for easier reference) where we outline as follows with regard to that issue:

• Each LE Staff member has his/her own employer identification number (Betriebsnummer) due to the fact that LE Staff are considered self-payers (Selbstzahler). To address this issue, the U.S.

Mission will be able to obtain dummy employer identification numbers for each post.

8. Q: Social security contributions in Germany are due once a month. Therefore, it is not possible to calculate the social security contributions twice a month. Contribution statements to the health insurance funds can only be sent once a month. Is it therefore da binding requirement that payroll runs take place per US pay cycle (i.e. bi-weekly) in Germany although a submission to the health insurance funds can only be processed once a month? However, a process can be implemented between the US Embassy and the Payroll provider to estimate the German social security contributions for the first US pay cycle.

A: Correct. To address this issue the Mission, per Item 3 Requirements 3 of the Statement of Work - and there sub-section 3.3 - the Mission proposes the following system:

3.3 The Contractor shall prepare bi-weekly and monthly reports using salary and GSSS contribution calculations from previous Pay Periods that are assigned to a particular calendar month. Note: The 26 Pay Periods are spread over 12 calendar months; the Customer will, for the sole purpose of the payroll and salary computation administration, assign the Pay Periods to particular calendar months. The Customer will provide the information to the Contractor at the beginning of each calendar year. The Customer will work with the Contractor to establish a method of salary reporting and computation that addresses the unique challenges presented by the different pay system used by the USG and which suits the Contractor’s systems as best as possible.

We understand from another US Mission that they handle the issue that way.

9. Q: Can you tell us how many requests from staff can be expected on average per month? In addition, do you have an indication of how many certificates will be issued on average per month?

A: A Mission Germany-wide count resulted in an estimate of 35 per month (Germany-wide:

Berlin plus small posts: 15, Frankfurt 15, Munich 5).

10. Q: In which data format will the monthly US Payroll data and calendar evaluations (sickness, maternity leave, parental leave, etc.) be transmitted to the Payroll Provider? Can you send us an example of the future data transfers?

A: The data format can/will be decided between the Mission and the vendor to ensure a method that serves both parties best. As this is a new program, we do not have a sample.

11. Q: We assume that the data transfer is to take place via a SharePoint, correct?

A: Any secure portal that serves the Mission and the vendor best will be acceptable in so far as Mission IT security rules allow.

Attachment to Questions and Answers set one – 19GE5021R0107

VERSN COD FAMILIEN_NAME_VORNAME G GEBDAT F EINTRI BEITRI BGEHALT BEMDIFF WAZ AUSTRI A GEHALT1 GEHALT2 GEHALT3 GEHALT4 GEHALT5

1586 509 2 1 20081026 20131101 56015 0 4000 0 0 49027 51410 54083 57961 67597

1054 502 1 1 19891101 19941101 37287 0 4000 0 0 34065 34756 35599 38120 43899

1223 508 1 2 19950701 20000701 70467 0 4000 0 0 65285 66599 68207 70952 81296

1613 538 2 2 20101012 20151101 59791 0 4000 0 0 47776 53539 59901 64190 73549

915 524 1 2 19880524 19930601 80520 0 4000 0 0 82246 85553 87616 91138 104287

1052 502 1 1 19891002 19941101 46343 0 4000 0 0 40477 41296 42297 48000 59648

1638 534 1 1 20130701 20180701 63281 0 4000 0 0 55017 58155 61413 65430 76393

1518 202 1 2 20060109 20110201 55216 0 4000 0 0 46698 52001 53259 57020 67103

1322 502 1 2 19990913 20041001 58537 0 4000 0 0 54214 55306 56644 58926 67597