Workers compensation payroll procedures
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Workers’ Compensation Payroll Procedures. What We Will Learn (1). Overview WC payments & the UC supplements Paid and unpaid leaves: Retirement Service Credit Calculating the WC Leave bank Method 1: Web Calculator Method 2: Paper Calculation Sheet Calculating the UC Supplement (SL/VL/ESL)

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Workers compensation payroll procedures l.jpg
Workers’ CompensationPayroll Procedures


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What We Will Learn (1)

  • Overview

    • WC payments & the UC supplements

    • Paid and unpaid leaves: Retirement Service Credit

  • Calculating the WC Leave bank

    • Method 1: Web Calculator

    • Method 2: Paper Calculation Sheet

  • Calculating the UC Supplement (SL/VL/ESL)

    • Method 1: Time Record Reconciliation

    • Method 2: Option A or Option B form

  • Processing payment and crediting Retirement Service

  • Reconciling the Time Record


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What We Will Learn (2)

  • Coordinating:

    • Application for other disability benefits:

      • UC Supplemental Disability

      • Other

    • Continuity of Health Insurance:

      • Medical (OP Contingency Fund)

      • Optical

      • Dental


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What We Will Learn (3)

  • Special Topics:

    • WC Payments to UC Regents

    • WC TD Overpayments

    • UC Payroll Overpayments

    • Delayed & Denied WC Cases

  • Hands-on practice


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WC Payments

  • TPA pays WC benefits

  • UC integrates those payments into its:

    • Payroll calculations and procedures

    • Benefits procedures


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UC Supplements

  • UC policies and employment contracts allow most employees to elect

    • To receive WC only, or

    • To supplement WC with SL, or

    • To supplement WC with SL, then VL.


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SL Supplement

  • Supplemental SL brings total income (including WC payments) up to 100% of regular pay plus shift differential.


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VL Supplement

  • Supplemental VL brings total income (including WC payments) up to 100% of regular pay plus shift differential.

  • Supplemental VL cannot be used until Supplemental SL is exhausted.

  • VL cannot accrue beyond the VL Max.


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ESL (1): Eligibility

  • When SL/VL exhausts:

    • Most employees are eligible for Extended Sick Leave (ESL).


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ESL (2): Description

  • Extended Sick Leave (ESL)

    • Only exists for WC injuries and illnesses.

    • Maximum of 26 weeks for any one injury.

    • The 26 weeks need not be continuous.

    • Cannot be used before SL/VL is exhausted.

    • Brings Total Income up to 80% of Regular Pay plus Shift Differential.


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ESL (3): Bank vs. Payments

  • The ESL Bank is a bank of weeks, not hours.

    • ESL Benefit is paid in HOURS.

    • ESL Bank is adjusted in WEEKS.

  • In a pay period, any use of ESL hours is counted as use throughout all of the weeks in the pay period.


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UC Supplements: When Exhausted

  • When SL/VL/ESL exhausts:

    • Dept places the employee on LWOP.

    • Dept coordinates:

      • Application for UC Supplemental Disability

      • Continuation of Health Plan insurance

        • Medical (Contingency Fund pays)

        • Optical (Employee self-pays)

        • Dental (Employee self-pays)


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Benefits that Supplement WC

  • SL or SL & VL (paid by Dept)

  • ESL (paid by Dept)

  • UC Supplemental Disability (Liberty Mutual)

Supplements are Sequential: on the date one ends, the next begins.

Supplements Differ: each supplements to a different % of earnings.


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SL/VL Supplement

Appointment is100%

Distribution is 100%

Brings income to 100%

SL/VL being used

SL/VL accrue at 100%

New Accruals credited upon accrual

Holidays at 100%

Ends when balance(s) = 0

ESL Supplement

Appointment is 100%

Distribution is80%

Brings income to to 80%

SL/VL must be exhausted

SL/VL accrue at 100%

New Accruals credited upon RTW

Holidays at 100%

Ends at 26 week Max

UC Supplements Compared


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SL/VL Election Form

  • Employee must authorize UC to use SL/VL as supplements.

  • Employee makes their election on the SL/VL Authorization form:

    • DMS sends this form to each employee.

    • The employee returns the form to DMS.

    • DMS sends the department an email advising which option the employee chose.


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SL/VL Option C

  • If EE elects not to supplement WC:

    • Place EE on Leave without Pay (LWOP)

    • Follow FMLA procedures and requirements

  • The EE will not be eligible for:

    • ESL

    • UC Supplemental Disability

    • Contingency Fund

    • Other UC benefits


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SL/VL Options A & B

  • Option A: SL to supplement WC:

    • Change Pay Status to Sub 2

    • Change Time Code to “Z”

  • Option B: SL & VL to supplement WC:

    • Change Pay Status to Sub 2

    • Change Time Code to “Z”

  • If EE is working a reduced schedule

    • Fax weekly Report of Reduced-Schedule Wages to ORS.


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UC Goals

  • Supplement WC payments with Paid Leave

  • Credit service for WC Leave (if appropriate)

  • Avoid double payment of WC Leave

  • Keep accurate Time Record

  • Keep accurate Paid Leave balances

  • Coordinate application for STD/LTD benefits

  • Coordinate continuity of Health Insurance


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Each Pay Period (1)

  • DMS will email you the WC payments (mid-month & end)

  • Convert them using,

    • Method 1: Web Calculator or

    • Method 2: Calculation Worksheets

  • Calculate the UC supplement, using:

    • Method 1: Time Record Reconciliation Method, or

    • Method 2: Option A or B form

  • Determine Percent Time on Pay Status

    • 1. REG time (Hours Worked, WC Hours, HL, SL, VL)

    • 2. ESL time (if ESL is due)


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Each Pay Period (2)

  • Use the Payroll AP form to:

    • Process the UC Payment and Credit Retirement Service

    • Process the WC pay reduction using DOS code WCR.

  • Reconcile the employee’s Time Record

  • Adjust Accrual Balances and ESL Bank balance

  • Coordinate continuity of STD/LTD benefits

  • Coordinate continuity of Health Insurance


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Leave: Paid & Unpaid

  • Leave With Pay (Paid Leave)

    • Holiday Leave

    • Sick Leave

    • Vacation Leave

    • Extended Sick Leave

    • Other

  • LWOP (Unpaid Leave)


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WC Payments as Paid Leave

  • While employee uses SL/VL/ESL

    • Treat WC payments as Paid Leave

  • If EE has returned to reduced-schedule work:

    • If ESL is not exhausted: Treat WC as Paid Leave.

    • If ESL is exhausted: Treat WC as Unpaid Leave:

      • Ignore the WC payments (do not convert them)

  • If EE has not returned to work:

    • Treat WC payments as Unpaid Leave

    • Ignore the WC payments (do not convert them)

    • Place employee on LWOP


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    Hours: Three Types

    • Hours of Work (“REG Time)

    • Hours of Paid Leave

      • Holiday Leave (“REG” Time)

      • WC Leave (“REG” Time)

      • Sick Leave (“REG” Time)

      • Vacation Leave (“REG” Time)

      • Extended Sick Leave (“ESL” Time)

    • Hours of Unpaid Leave (LWOP)


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    Retirement Service Credit

    • Paid Leave vs. Unpaid Leave (LWOP)

    • Treating WC payments as Paid Leave (REG time) credits Retirement Service.

    • Treat WC payments as Paid Leave (REG time) when SL/VL/ESL supplements WC.

    • When SL/VL/ESL exhausts, ignore the WC payments.


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    WC Payment Schedule (1)

    • Does not match UC Payroll schedule.

    • WC payments may straddle two UC Pay Periods.

    • By the end of the Pay Period there may be some dates WC has not yet paid, but will pay.


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    WC Payment Schedule (2)

    • If you do not have WC payment info for all dates in the pay period, choose one:

      • 1. Pay hours worked, but DELAY paying Supplemental SL/VL/ESL, OR

      • 2. Include known payments and adjust next pay cycle for new payments, OR

      • 3. Include known and estimate unknown, then adjust for differences when known.


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    STEP 1:Converting the WC Payments

    Two Methods


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    Receiving the WC Payment Info

    • DMS emails a spreadsheet twice per month


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    Convert WC Payments to:

    • Hours of Paid Leave (WC Leave Hours)

      • to credit service

    • Dollars by which to reduce pay (“WCR” Dollars)

      • to avoid double-payment

    The WC Web Calculator does the conversion for you.


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    WC Payment Conversion: Two Methods

    • Two Methods

      • Worksheet

      • Web Calculator


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    Step 2:Calculating the UC Supplement

    Two Methods


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    Method 1:Time Record Reconciliation Method

    Option A or B form not used


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    Time Record

    • Think in Hours not in Dollars.

    • Your goal is to fill the Timesheet with hours until they run out.

    • You will enter WC Hours in the “Other Leave” column.


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    Unreconciled Time Record

    • Start by Determining:

      • PRE-Disability hours payable

      • POST-Disability hours payable

    • Then include:

      • WC Hours

      • Holiday Leave Hours

    • Then you will be able to calculate:

      • Supplemental SL/VL/ESL due


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    Entering Hours on the Time Record

    • Enter the hours in the following order:

      • Worked hours

      • Holiday hours

      • WC hours (in the “Other Leave” column)

      • SL hours

      • VL hours

      • ESL hours (in the “Other Leave” column)

    • In this way, you “build” a timesheet.


    Holidays sl vl vs esl vs lwop l.jpg
    Holidays: SL/VL vs. ESL vs. LWOP

    • If holiday falls in the SL/VL period

      • EE gets credit for all hours.

    • If holiday falls in the ESL period

      • EE gets credit for all hours.

    • If holiday falls in the LWOP period

      • EE does not get credit for hours.


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    New Accruals: SL/VL Supplement

    • While using SL/VL to supplement WC

      • SL & VL continue to accrue at regular rate.

      • Can be used as soon as accrued (next pay period).

      • If EE separates, pay VL.

    • VL Maximum

      • Accrued VL cannot exceed the maximum


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    New Accruals: ESL Supplement

    • While using ESL to supplement WC

      • SL & VL continue to accrue at regular rate.

      • EE cannot use until Return to Work.

      • EE can use if Returns to Work on reduced schedule.

      • If EE separates, pay VL.

    • VL Maximum

      • Accrued VL cannot exceed the maximum.


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    New Accruals: ESL Exhausted

    • When the 26 weeks of ESL is exhausted:

      • If EE not working, place on LWOP.

      • SL & VL continue to accrue at regular rate.

      • EE cannot use until Return to Work.

      • EE can use if Returns to Work on reduced schedule.

      • If EE separates, do not pay VL, unless EE had returned to work on a reduced-schedule.

    • VL Maximum

      • Accrued VL cannot exceed the maximum.


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    Holidays and New SL/VL AccrualsReturn to Work at Reduced Schedule

    • If EE returns to work on reduced schedule

      • On holidays, EE gets credit for all hours.

      • SL & VL accrue at regular rate.

      • SL & VL can be used as soon as accrued.

      • If EE separates, pay VL.

    • VL Maximum

      • Accrued VL cannot exceed the maximum.


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    Method 2:Option A & B form Method

    The forms are self-explanatory.

    So, we will not learn this method in class.


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    Option A and B forms

    • The Option A and B forms:

      • Credit service for WC payments

      • Compute the UC supplement (SL, VL, ESL)

      • Adjust accrual and ESL bank balances

      • Compute Percent Time on Pay Status

      • Alert you to:

        • Need to coordinate other disability benefits

        • Need to coordinate Health Insurance continuity


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    Step 3: Processing Payment

    • Filling out the Payroll AP form

      • Percent “REG” Time on Pay Status

      • Percent “ESL” Time on Pay Status

      • “WCR” Dollars to be deducted


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    Step 4:Coordinating Other Disability Benefits

    • If ESL exhausted:

      • Refer EE to HR Benefits, so EE can:

        • Inquire if eligible for UC Supplemental Disability

        • Apply for same if eligible

      • If EE Has not Returned to Work

        • Place on LWOP


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    Step 5:Coordinating Health Insurance

    • If ESL exhausted and no Return to Work

      • Dept refers EE to Campus Payroll, so EE can:

        • Arrange to self-pay Dental plan premiums

        • Arrange to self-pay Optical plan premiums

      • Dept contacts HR Benefits to:

        • Request activation of OP Contingency Fund to pay Medical Plan premiums


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    Special Topics:TD Payments to UC Regents

    • Before making an initial TD payment, the TPA will call you to inquire whether:

      • UC paid the employee in full using SL/VL.

      • UC paid the employee ESL for the entire pay period (80% of regular pay)

    • If UC paid the employee as above:

      • TPA will make the TD payment payable to the UC Regents.


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    Special Topics:WC TD Overpayments (1)

    • The TPA seeks reimbursement directly from the employee for any overpaid WC Temporary Disability.

    • If the employee reimburses the TPA, this may or may not affect UC Payroll, depending upon whether UC paid SL/VL or ESL; or whether the employee received no such payments.


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    Special Topics:WC TD Overpayments (2)

    • The TPA cannot unilaterally reduce future TD payments.

    • If the TPA is unable to obtain a TD reimbursement from the employee, they will pursue a credit against other W/C benefits.

    • Any such credit must be judicially approved by the WCAB.


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    Special Topics:UC Payroll Overpayments

    • Per UC Accounting Manual

      • A reasonable repayment schedule should be negotiated with the employee.

    • See “Notes” section to this slide for details.


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    Special Topics:Delayed & Denied WC Cases

    • If a WC case is Delayed or Denied:

      • TPA will send you a cc of the Notice Letter that they send to the employee.

      • Treat the case as a regular (non-WC) disability case until such time as the WC case is accepted (if it ever is).

    • Refer the employee to HR Benefits to:

      • Inquire into eligibility for UC Supplemental Disability benefits

      • Apply for same, if eligible.


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    Practice

    In this example:

    EE elected Option B – SL & VL.

    EE will need to use ESL.


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    Practice

    • Converting the WC Payments

      • Method 1: Worksheet

      • Method 2: Web Calculator

    • Calculating the UC Supplement

      • Method 1: Time Record Reconciliation

      • Method 2: Option A or B form

    • Reconciling the Time Record

    • Filling Out the Payroll AP form

    • Coordinating other Disability Benefits

    • Coordinating Health Insurance Plan coverage

    • Narrative Summary


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    Steps

    • Convert WC payments. Use either:

      • Worksheet, or

      • Web Calculator

    • Calculate UC Supplement. Use either:

      • Option A or B form (B in this case), or

      • Time Record Reconciliation Method

    • Process payment using Payroll AP form.

    • Reconcile Time Record and balances.

    • Coordinate disability application & health insurance continuity.


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