Workers Compensation With Payroll Time Sheets Procedure



State of Iowa – DAS-SAE/Centralized Payroll Procedures related to Workers Compensation Leave 07/01/2016Workers Compensation policies are stated in the Managers and Supervisors manual, Section 6.20. This narrative is only meant to help with Timesheet and Payroll processing that occurs on HRIS, based on the policies stated in the Managers and Supervisors manual. If an employee is injured while at work, he/she must work with their supervisor to complete the forms necessary for workers compensation benefits. If the employee is determined to be eligible for workers compensation benefits, Iowa law requires a 24-hour waiting period before benefits begin. There are lots of forms and documentation items to be submitted to Sedgwick upon notification of an injury at work. You will want to work with your Sedgwick representative to ensure that all information is provided as quickly as possible, so that benefits eligibility can be immediately reviewed and determined. Also note that an FMLA designation may run concurrently with workers compensation leave. You will want to closely coordinate with Reed Group, Sedgwick and DAS on HR/Payroll actions for any employees who are on FMLA leave and also receiving workers comp benefits.The workers comp waiting period typically commences on the first full day of disability following the date of injury. As stated in Section 6.20.07 of the Mgr/Supervisors manual, the employee may use accrued banked leave for the compensation of lost time during his/her scheduled to work hours that fall within the 3-day (24 hrs accumulated) waiting period. Per Sheryl Jensen-HRE, waiting period hours do not count towards FMLA until Sedgwick approves the work comp claim. On HRIS timesheets, use regular sick, vacation, other banked leave or LWOP time types to record employee waiting period hours.? Reason (per HRE) is because a workers comp determination may not yet have been made.? Once a w/comp determination is made, then retroactive FMLA hrs adj may be needed.Note: Per Section 6.20.07, on the date of injury, if the employee cannot complete work for the rest of the day, the State is to pay the employee regular time for any scheduled hours missed on that day. You should record those hours on date of injury on the timesheet as time type 010-Regular Time.? In this instance, remarks/comments entered on the timesheet are always recommended to document date of injury and hrs missed from work on that date.After commencement of lost time benefits begins following the waiting period, the employee will receive payments from Sedgwick until it is determined that he/she is released back to work. Sedgwick benefit payments are reported to all State of Iowa HR/Payroll staff via a weekly email notification process. Contact Sheila Grech at Sedgwick to get on the email distribution list. When TTD/TPD (lost time) benefits will be paid by Sedgwick, the employee should immediately complete DAS-HRE form called Workers’ Compensation Benefit Election. If the employee has enough banked leave hours available, he/she may elect to supplement his/her workers compensation payments with banked leave. The election can be made at any time during the period in which benefits are received. However, once the election to supplement is made, supplementing shall continue until the selected banked leave is depleted. The employee is responsible for communicating this election to the appropriate personnel staff and for completing any necessary paperwork in a timely manner. DAS-HRE Work Comp Benefit Election form should be kept in Personnel file.A. If the employee CANNOT OR CHOOSES NOT TO SUPPLEMENT workers compensation benefits with banked leave:If an employee has no banked leave, he/she cannot be allowed to supplement work comp benefits. If an employee does have enough banked leave, but does not want to supplement, then he/she needs to complete and sign/date the DAS-HRE Benefit Election form and mark the selection that says ‘I decline to supplement my workers compensation benefits at this time’. An employee who is not supplementing work comp benefits and who is not working any regular hours is NOT considered to be in ‘paid’ status during the work comp leave period. In effect, the EE receives payments from Sedgwick CMS that replaces his/her pay from the State. If the EE will be on extended leave (for1- 2+ pay periods), the EE should be placed in a leave code (depending on employee circumstances, leave code 54 or 57 may apply). Key P1 type 501 and record detailed remarks to indicate leave period is Work Comp related. On HRIS timesheets (or PAYN), the supervisor/HRA will enter any hours worked as 010-Regular time, and remaining hours are entered as LWOP, using either time type 268 (WC LWOP) or 938 (FMLA WC LWOP). Detailed comments & documentation should be noted on HRIS timesheet as needed. Treatment of Work Comp Medical Appt hours for employees who do not supplement:For an employee who is NOT supplementing and is released to work for part of the workday:Employee is only to be paid for actual hours worked on HRIS timesheet or PAYN. For the remaining hours that EE is not released back to work, the EE gets no hours/wages paid on timesheet. These hours should be recorded as either FMLA WC LWOP (time type 938) or WC LWOP (time type 268). It doesn’t matter if EE is attending a Work Comp Medical Appt or if EE is just going home during the time period that EE is not released back to work. The end result is that since Sedgwick is already paying the employee lost time benefits for those partial hours that he/she not back to work, the employee gets no additional wages paid on HRIS for those same hours.For an employee who elected to NOT supplement benefits, but has been released back to work full-time:If EE is attending Work Comp Medical Appts during their regularly scheduled return to work hours, then EE can be paid WC MED APPT hours on HRIS timesheet for the hours that they are away from work. Enter detailed remarks on timesheet to document Dr. Name, Appt hrs (begin/end), Appt type (followup visit, physical therapy, etc).In these particular instances where employee has been released back to work, you must confirm that the criteria items below are both met: 1) Employee is missing their scheduled to return to work hours to attend the Work Comp Medical Appts, and 2) Employee is NOT being paid any lost time benefits by Sedgwick for the Work Comp Medical Appt hours, because EE has been released back to work.In this case, wages can be paid to EE for reduced Regular work hours + Work Comp Med Appt hours, because EE will not have received more in pay/work comp benefits than their normal Gross BW pay.However, if the EE who elects to not supplement does get paid lost time benefits for attending Medical Appt hours, then you must record the missed hrs as LWOP on PAYN/HRIS timesheet. This ensures that the employee will not be paid MORE in wages/work comp benefits than their normal Gross BW pay. Insurance Billing Adjustments: If EE has elected to not supplement, and if EE is not receiving a biweekly pay warrant, monthly insurance billing adjustments may be needed. Contact Sandy Mezera for assistance with insurance billing adjustments.Note that per DAS Administrative Rules, the employee will not receive banked leave accruals for the hours that the employee is on a LWOP status. Also, an employee who is not considered to be in ‘paid’ status is not eligible for holiday pay. Furthermore, the employee is not eligible to use any banked leave hours to receive additional pay for the hours missed from work.Note: Catastrophic leave and/or FMLA rules may force the employer to payout all banked leave hours first, so the EE can become eligible for leave donations. If an employee is receiving catastrophic leave donations, then the combined total of all gross wages paid + Sedgwick benefits paid cannot exceed the employee’s normal gross biweekly pay. HRA’s will need to closely monitor this situation!!B. If the employee chooses to SUPPLEMENT his/her workers compensation benefits with banked leave:*Important* An employee election to supplement benefits with paid leave DOES NOT MAKE THE EMPLOYEE WHOLE. This is not the intent of the benefit offered by the State. Employee needs to complete a DAS-HRE Work Comp Benefit Election form, which requires the employee to mark and prioritize selected leave hours that are to be used for supplementing. For purposes of time type/timesheet entry on HRIS, those leave hours will first need to be designated by the Agency as Non-FMLA or FMLA covered.On a biweekly basis, HRA staff should complete a P-17 form (forms are available on the DAS/SAE website under ‘Centralized Payroll-Payroll Forms’) for all employees who elect to supplement their TTD/TPD lost time benefits. Note: PPD benefits are not treated as lost time benefits. See Central Payroll if PPD benefits are paid, as procedures are much different in this case! The P-17 form is only to be completed for employees who elect to supplement work comp benefits. The P-17 form should be submitted to Centralized Payroll for each pay period, as documentation of 1) the employee’s timesheet hours to be allocated, and 2) all P1 actions that need to occur. The P-17 form is a tool that will assist HRA staff each pay period, in calculating necessary work comp gross pay forfeiture amounts and leave hours to be charged to the employee. The HRA will be responsible for completing/submitting the P-17 forms, and for making all timesheet and P1 entries required. Lisa Elliott in Centralized Payroll will 1) review the P-17 forms, 2) spot-check HRIS timesheet/PAYN entries as time permits, and 3) approve all Work Comp Forfeit pay and Leave Balance Correction P1 entries at PAYL level. Following is an overview for those employees who elect to supplement their lost time benefits paid: 1) For the time period that the employee is not released back to work due to the injury, the EE will receive full normal biweekly wages on their pay warrant. 2) EE will ‘forfeit’ the Sedgwick benefits they received. A gross pay reduction will be keyed on HRIS to forfeit the Sedgwick pay (P1 type 844).3) EE should be charged a percentage of total hours that they were scheduled to work (SW) each pay period, by using their selected banked leave hours indicated on the HRE election form. Typically, the employee is charged for leave hours totaling approximately 30-40% of scheduled to work hours as their required ‘supplemental’ portion. The P-17 form will help the HRA determine the appropriate supplemental hours % calculation. 4) EE will earn pro-rated sick/vacation accruals for each PP while on leave. The HRIS Payroll calculation routine automatically makes the pro-rated calculations, based on ‘adjusted gross pay’ as a % of normal gross pay.For departments not on HRIS time reporting, you will use PAYN to pay the employee + charge specific selected banked leave hours required for supplementing. For those who supplement, you will also need to record the State Share of Work Comp hrs paid in the new field called ‘REG HRS NOT WKD’. Reason: The State share work comp hours are being paid as Regular hours on PAYN, but the EE is not actually working. Effective 10/26/2012, new HRIS time types were developed for use on HRIS timesheets for employees who are on workers comp leave. These time types are classified based on whether the leave hours will be Non-FMLA or FMLA designated. See table below:C. If the employee has been released to return to work, but doesn’t feel well enough to do so. Or, if EE has reached MMI status and/or lost time (TPD/TTD) benefits are no longer paid during leave period: Employee should be placed in a leave code. EE can elect to use 100% banked leave hours if he/she wants to be paid.Non-FMLA designated time types:260WORK COMP EE SICK LEAVETO CHARGE EE BANKED SICK HRS FOR SUPPLEMENTING BENEFITS (AKA - INJURY LEAVE)261WORK COMP EE VAC LEAVETO CHARGE EE BANKED VACATION HRS FOR SUPPLEMENTING BENEFITS262WORK COMP EE COMPTIMETO CHARGE EE BANKED COMP HRS FOR SUPPLEMENTING BENEFITS263WORK COMP EE HOL COMPTO CHARGE EE BANKED HOLIDAY COMP HRS FOR SUPPLEMENTING BENEFITS264WORK COMP EE BANKED HOLIDAYTO CHARGE EE BANKED HOLIDAY HRS FOR SUPPLEMENTING BENEFITS265WORK COMP IUP PERSONAL LEAVETO CHARGE EE FOR IUP PERSONAL LEAVE HRS FOR SUPPLEMENTING BENEFITS266WORK COMP STATE PD HOURSFORMERLY TIME TYPE 330, ‘OTHER LEAVE’. THIS IS STATE SHARE HOURS FOR AN EMPLOYEE WHO IS SUPPLEMENTING, THAT NEED TO BE RECORDED FOR THE REMAINING BALANCE OF THE SW DAY.267WORK COMP MED APPT PAIDFORMERLY TIME TYPE 330, ‘OTHER LEAVE’. THIS IS FOR ANY WORK COMP-RELATED DOCTOR/PHYSICAL THERAPY/OFFICE VISITS/ETC THAT EE IS ENTITLED TO BE PAID FOR.FMLA designated time types:930FMLA WORK COMP EE SICK LEAVETO CHARGE EE BANKED SICK HRS FOR SUPPLEMENTING BENEFITS (AKA - INJURY LEAVE)931FMLA WORK COMP EE VAC LEAVETO CHARGE EE BANKED VACATION HRS FOR SUPPLEMENTING BENEFITS932FMLA WORK COMP EE COMPTIMETO CHARGE EE BANKED COMP HRS FOR SUPPLEMENTING BENEFITS933FMLA WORK COMP EE HOL COMPTO CHARGE EE BANKED HOLIDAY COMP HRS FOR SUPPLEMENTING BENEFITS934FMLA WC EE BANKED HOLIDAYTO CHARGE EE BANKED HOLIDAY HRS FOR SUPPLEMENTING BENEFITS935FMLA WC IUP PERSONAL LEAVETO CHARGE EE FOR IUP PERSONAL LEAVE HRS FOR SUPPLEMENTING BENEFITS936FMLA WORK COMP STATE PD HRSFORMERLY TIME TYPE 330, ‘OTHER LEAVE’. THIS IS STATE SHARE HOURS FOR AN EMPLOYEE WHO IS SUPPLEMENTING, THAT NEED TO BE RECORDED FOR THE REMAINING BALANCE OF THE SW DAY.937FMLA WORK COMP MED APPT PAIDFORMERLY TIME TYPE 330, ‘OTHER LEAVE’. THIS IS FOR ANY WORK COMP-RELATED DOCTOR/PHYSICAL THERAPY/OFFICE VISITS/ETC THAT EE IS ENTITLED TO BE PAID FOR.For an employee who has elected to supplement work comp benefits with paid leave, the net result is that full biweekly pay is being recorded and paid as wages to the employee during the workers comp leave period. It is recommended that comments be used on the HRIS timesheets to fully document the employee’s workers compensation leave details for each pay period.2) For each pay period, the employee’s weekly benefit payments received from Sedgwick are ‘forfeited’. These Sedgwick payments will be recorded as a reduction from the employee’s gross earnings on payroll. Use P1 type ‘844’ to enter the biweekly workers compensation lost time benefits paid for the entire pay period (enter the work comp pay as a + positive amount on the P1). The work comp pay from Sedgwick is then treated as a gross earnings reduction through the HRIS Payroll Calculation routine.Treatment of Work Comp Medical Appt hours for employees who have elected to supplement:For an employee who elected to supplement and is released to work for part of the workday:If EE is attending Work Comp Medical Appts during their adjusted return to work hours, then time types for WC MED APPT can be used on HRIS timesheet to pay wages to the employee. EE is not to be charged banked leave for Work Comp medical appt times. Therefore, hours on P17 form should be marked as MED APPT (not SW).However, if employee is attending work comp medical appts during the part of the workday they are on work comp leave, then the employee is typically receiving lost time benefit payments for that time period. Therefore, those hours should be recorded on P17 form as SW hrs. EE will need to contribute a portion of their banked leave hours to cover those appt times, because lost time benefits are getting paid by Sedgwick for those hours.For an employee who elected to supplement and is not released to return to work at all (or if work restrictions/accommodations cannot be made): If employee is attending Work Comp Medical Appts while they are completely off work and receiving lost time benefits, all Work Comp Medical Appt hours are treated as SW hours on P17 form. EE will need to contribute a portion of their banked leave hours to cover those appt times, because lost time benefits are getting paid by Sedgwick for those hours. C. General Notes:An employee may elect to not supplement Sedgwick benefits initially, and then choose to supplement later on. However, per the Mgr/Supervisors manual, once the employee elects to supplement benefits, the employee must continue to supplement until the selected paid leave is exhausted, or the employee is no longer eligible for workers comp benefits, whichever comes first. Note: For employees covered under the SPOC collective bargaining agreement, additional special provisions apply.For employees who have elected to supplement work comp benefits, sick and vacation leave accruals will occur on a pro-rated basis. The employee is made aware of this policy when he/she reads and completes the DAS-HRE Workers Compensation Benefit Election form. Also, the State’s share for health/dental/life/LTD insurance coverage continues for employees who choose to supplement their workers comp benefits. The state share charges will occur during normal payroll processing, so long as the EE receives a pay warrant.When EE does not, or can no longer supplement, the State’s share of insurance coverage is extended for an add’l four months beyond the date that supplementing ends. This 4 month grace period is claim-specific. If EE receives no payroll warrants for this 4 month extension period, your agency may need to 1) manually collect employee premiums due for insurance, plus 2) submit ‘State Share Transfer’ forms to DAS-SAE for monthly premiums due. You will work with Sandy Mezera in DAS-SAE on insurance billing adjustments.D. When 3-day waiting period is retro-actively paid as lost time benefit days by Sedgwick:The initial 3-day (24 hours) waiting period referenced above will be paid as lost time benefits by Sedgwick, after 14 days of lost time disability occurs. You make NO retroactive payroll adjustments until Sedgwick has reported waiting period dates as retroactively paid benefit dates:1) For an employee who has chosen to supplement their benefits, you will include these lost time benefits as workers comp pay (included with totals recorded on P1 Type 844). HR Associates will need to use the “Prior Period Adjustments” section of the P-17 form to calculate any retroactive adjustment of leave hours to restore, if necessary. Retroactive adjustment of EE leave hours to be restored for the waiting period should be made by the HRA, using P1 type 271 – Leave Balance Correction. P1 entry should always be used (vs. HRIS timesheet or PAYN adjustments) to fix hours originally charged, because the transactions are for a prior pay period. Additionally, P1s also provide an audit trail on the employee’s HRIS record. Example: Employee A was charged 24 leave hours for waiting period dates. Once waiting period days have become lost time benefit days, it is determined per P-17 calculations that the EE should only have been charged 8.40 hours. Difference of 15.60 leave hours needs to be added back into employee’s banked leave originally charged (on P1 type 271). It is recommended you use detailed calculations and document the wait period dates on the P1 remarks.2) For an employee who cannot or has chosen not to supplement their benefits, there are 2 ways to proceed when waiting period dates are retroactively paid: 1) No retroactive actions to be taken on payroll, which means the EE gets the Sedgwick benefits pay free and clear, as well as the wages paid for hours originally charged, or 2) Upon EE request, the waiting period hours initially charged to the EE may be returned as banked leave to the employee, and the wages paid on those leave hours are to be fully recouped on payroll. If option #2 is chosen by the employee, HRA’s should key both a P1 type ‘271’ and P1 type ‘846’ (negative regular other pay adjustment) to record the full impact of all transactions all within the same pay period. Detailed remarks on the P1s are needed to document the waiting period dates + banked leave originally charged/paid, as this P1 entry requires both COMP and PAYL approvals.E. If Sedgwick has over-paid lost time benefits to employee:If it is discovered that an EE has been overpaid lost time benefits pay by Sedgwick, notify the carrier immediately. Sedgwick is responsible for recovering the overpayments directly from the EE. This typically happens when an EE returns to work and Sedgwick is not notified about this action from the department. In order to avoid this problem, your agency should be maintaining ongoing contact with Sedgwick re: worked hours, appointment hrs, or other updates for all your employees who are receiving any type of work comp benefits. Pay period calculations (P17 form + P1 type 844) and time entries for the employee should always be made using the corrected leave dates and the corrected amount of benefits received.F. Time away from work for Medical Appointments after employee returns to work full-time:Per 6.20.08 of the Managers and Supervisors Manual, once EE has returned to work full-time (restricted or full duty) after sustaining a work-related injury, and if the employee requires additional medical appointments related to the injury, time lost from scheduled work for these appointments will be paid at the regular rate of pay. These payments typically are not considered weekly benefits. Since EE receives no lost time pay from Sedgwick for the medical appt, the hours are to be paid by the employing agency through normal payroll processing as regular work time pay – medical appt hrs are not charged to EE banked leave.For work comp appointment hours, use time types 267-WC Medical Appt or 937-FMLA WC Medical Appt on HRIS timesheets. Remarks on timesheets are recommended to document Dr. name, physical therapy appt, followup visit, drive time, appt dates/times etc. Employee should be reminded by agency staff to make every effort to schedule these work comp appointments outside of scheduled work hours.G. Impact on IPERS covered wages:Per IPERS rules, only the supplemental earnings of an employee who is on workers comp leave is recorded as IPERS covered wages. Payments received from a third party (Sedgwick) are not recorded as IPERS covered wages. If an employee has questions about the taxable income impact of receiving workers comp benefits from Sedgwick, employee should consult with their tax preparer. Generally speaking, lost time benefits received are not treated as taxable income to the employee. No W-2 or 1099 is issued by Sedgwick.H. Disclaimer/Contact Information:This narrative is meant to be an overview on Payroll functions only. Special exceptions may apply. DAS/HRE is responsible for the overall administration of the Workers Comp benefit program. HRE Benefits/Workers Comp Administrator contact info is (515) 281-4513. SAE Payroll contact is Lisa Elliott, (515) 281-3130. Each agency should also have an assigned Sedgwick representative to contact with claims questions or ongoing updates. 1099-Misc Reporting: Sedgwick/State of Iowa FEIN 42-1590141 ................
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