CD 2013-003

Subject: New Entitlement Codes Clothing Allowance

February 18, 2013

1. Purpose

1.1. The purpose of this directive is to provide information regarding two new clothing allowance entitlement (ENT) codes that have been created in the Regional Pay System (RPS):

  • Distinctive Clothing (ENT 1G1)
  • Non-distinctive Clothing (ENT 1G2)

1.2. An information notice to employees concerning the above subject has been included with this compensation directive.

1.3. Law (LA) group collective agreement, Bargaining Unit Designator (BUD) code 214, signed on July 27, 2010.

2. Background

2.1. Article 29 in the LA collective agreement states that, effective November 1, 2009, where court clothing is required on a regular basis in order for a lawyer to carry out his or her duties, the lawyer will be entitled to be reimbursed for the cost of obtaining one complete set of court clothing, in an amount not to exceed twelve hundred dollars ($1200), provided the employer has not paid the lawyer for these items within the preceding five (5) years. In addition, a lawyer will also be entitled to be reimbursed for the cost of additional court clothing which he or she reasonably requires, including up to one hundred dollars ($100) for the cost of one new shirt each year.

Provided the eligibility requirements are met, an employee may be reimbursed upon proof of payment the cost of clothing as a lump sum amount.

2.2. In order to comply with collective agreements or other authorizing instruments and taxation laws, one entitlement code is required to reimburse eligible employees the cost of distinctive clothing, which is considered a non-taxable benefit, and another entitlement code is required to reimburse eligible employees the cost of non-distinctive clothing, which is determined to be a taxable benefit.

An example of distinctive clothing is the gown/robe, vest/waistcoat and tabs that are worn when lawyers must appear in court. The key here is the word "distinctive". The gown that lawyers wear when arguing in certain Canadian courtrooms is distinctive - a uniform that is required within the context of the courtroom and which is unlikely to be seen outside the courtroom, unless the lawyer is on his/her way to or from court.

The grey pants/skirts that lawyers wear are considered non-distinctive clothing. Although lawyers may choose to wear grey pants/skirts, it is acceptable to wear other pants/skirts. Therefore, it is not a requirement of the job to wear grey pants/skirts, whereas there is a requirement for the gown worn in court.

Similarly, for lawyers working in a court where a gown is not required, if business attire is required, it is also considered non-distinctive. A business suit is something that can be found in any professional business setting. Such attire is not distinctive, as it is worn in a variety of situations.

Consequently, two (2) entitlement codes were created in RPS on August 31, 2012, to process the payments:

  • 1G1 Distinctive Clothing – Non-taxable
  • 1G2 Non-distinctive Clothing – Taxable

3. Policy

3.1. Entitlements 1G1 (Distinctive Clothing) and 1G2 (Non-Distinctive Clothing) will be used to pay a lump sum amount for the cost of clothing to those employees who meet the eligibility requirements provided under a collective agreement.

3.2. The lump sum amount is payable to active and temporarily struck off strength (T-SOS) employees who were members of the relevant bargaining unit on the specified eligibility date.

3.3. Eligible employee types are indeterminate employees, term employees, casual employees as well as employees acting in a position eligible for this payment. Excluded employees are also entitled to receive the payments.

3.4. The new entitlement code for non-distinctive clothing (1G2) is subject to the following deductions:

  • federal and provincial income tax
  • Employment Insurance (EI)
  • Canada Pension Plan (CPP) or Quebec Pension Plan (QPP)
  • Quebec Parental Insurance Plan (QPIP)

The new entitlement code for distinctive clothing (1G1) is not subject to these deductions.

3.5. These allowances are not subject to the Disability Insurance (DI) Plan, the Long-term Disability Insurance (LTD) Plan, the Supplementary Death Benefit (SDB) Plan, the Public Service Management Insurance Plan (PSMIP) and the Public Service Pension Plan deductions.

3.6. These allowances are not considered part of salary for pay purposes. As a result, entitlements related to pay situations (such as promotions or acting pay) will not be recalculated. This payment is not to be used in calculating the 4% gratuity or premium pay in lieu of statutory holidays.

4. Procedures and Instructions

4.1. The new entitlement codes 1G1 "Distinctive Clothing" and 1G2 "Non-Distinctive Clothing" were created in the RPS on August 31, 2012.

4.2. Compensation advisors will be responsible for manually processing this payment for all eligible employees by completing an Entitlement Commence (ENC) - Pay Action Code (PAC) 18C transaction with entitlement code 1G1 or 1G2, rate base 0 (lump sum). For pay input requirements, please refer to the Personnel-Pay Input Manual (PPIM) section PPIM 4-4-18-3-1 and PPIM 14-6-1.

4.3. It is the authorizing manager's responsibility to determine whether a request meets the criteria and to approve a claim for payment.

4.4. The PPIM was updated to incorporate the relative information contained in this directive.

5. Inquiries

5.1. Any inquiries on the information contained in this directive should be addressed to your Public Works and Government Services Canada (PWGSC) Compensation Services Office.

Original Signed by
Carrie E. Roussin

Carrie E. Roussin
Director General
Compensation Sector
Accounting, Banking and Compensation

Reference(s): BUD 214, ENT 1G1, 1G2

Information Notice to Employees

Clothing Allowance - Law (LA) Group

The purpose of this notice is to advise you of a lump sum amount payable to eligible employees in the Law (LA) group.

Effective November 1, 2009, for employees within the LA group, where court clothing is required on a regular basis in order for a lawyer to carry out his or her duties, the lawyer will be entitled to be reimbursed for the cost of obtaining one complete set of court clothing, in an amount not to exceed twelve hundred dollars ($1200). In addition, a lawyer will be entitled to be reimbursed for the cost of additional court clothing which he or she reasonably requires, including up to one hundred dollars ($100) for the cost of one new shirt each year.

If you are an employee in the LA group who meets the eligibility requirements and supplies proof of purchase (receipts), you can be reimbursed the cost of clothing as a lump sum amount provided the employer has not paid you for these items within the preceding five (5) years.

The lump sum amount that is paid to an employee to reimburse the cost of clothing is non-taxable if the clothing is considered distinctive and taxable if the clothing is considered non-distinctive.

An example of distinctive clothing is the gown/robe, vest/waistcoat and tabs that are worn when lawyers must appear in court. The key here is the word "distinctive". The gown that lawyers wear when arguing in certain Canadian courtrooms is distinctive - a uniform that is required within the context of the courtroom and which is unlikely to be seen outside the courtroom, unless the lawyer is on his/her way to or from court.

The grey pants/skirts that lawyers wear are considered non-distinctive clothing. Although lawyers may choose to wear these grey pants/skirts, it is acceptable to wear other pants/skirts. Therefore, it is not a requirement of the job to wear grey pants/skirts, whereas there is a requirement for the gown worn in court.

Similarly, for lawyers working in a court where a gown is not required, if business attire is required, it is also considered non-distinctive. A business suit is something that can be found in any professional business setting. Such attire is not distinctive, as it is worn in a variety of situations.

Since the non-distinctive clothing allowance is subject to income tax, as well as the Canada Pension Plan (CPP)/Quebec Pension Plan (QPP), Employment Insurance (EI) and Quebec Parental Insurance Plan (QPIP) deductions, the amounts paid for this allowance will be reflected on T4 and Relevé 1 statements of remuneration. The distinctive clothing allowance is not subject to these deductions.

Compensation advisors will be responsible for processing approved payment requests.

Any request for information regarding the foregoing should be addressed to your compensation advisor.