LCTCS CENTRALIZED PEOPLESOFT PAYROLL MEMORANDUM #

Transcription

1 LCTCS CENTRALIZED PEOPLESOFT PAYROLL MEMORANDUM # TO: FROM: All PeopleSoft Users Lura A. Kamiya LCTCS Human Resources Director DATE: January 27, 2010 RE: Annual Reminder: Workers Compensation Documentation Supercedes documentation issued prior to August 24, 2009 Effective August 24, 2009, in an effort to make the earnings codes established for workers compensation more user-friendly, new workers compensation earnings codes and their set up were implemented. Hour tracking codes will work in the same method as all other codes established for the sole purpose of tracking hours. Buy back codes will serve the dual purpose of adding hours bought back to the appropriate leave balance and applying the appropriate payroll taxes to those hours that are bought back. Issue: When an employee is no longer actively working, but is approved for workers compensation this procedure documentation applies. At the point in time when the employee is no longer actively working, the annual and leave balances must be noted, as these are the balances that will apply to buy-back provisions while the employee is out on workers compensation Compensatory leave is not considered in buy-back of leave as defined in statute, therefore, no workers compensation codes are to be used for compensatory leave used Civil Service Rule states that the employee shall, to the extent of the amount accrued to his credit, be granted sick leave not to exceed the amount necessary to receive total payments for leave and workmen s compensation equal to his regular salary. In no case can the employee receive more than the total salary that would have been earned if he/she were not out on workers Civil Service Rule states, further, the employee may, to the extent of the amount accrued to his credit, be granted annual leave or a combination of annual and sick leave not to exceed the amount necessary to receive total payments for leave and workmen s compensation equal to this regular salary. In no case can the employee receive more than the total salary that would have been earned if he/she were not out on workers Because of the timing issues related to filing for Workers Compensation and actually receiving payments, an employee may have to use a full pay period of leave (typically 80 hours), assuming such leave balance is available to him/her, in order to receive a payment in the first period or two after filing. Once workers compensation payments are received, the employee is obligated to turn over his/her payment to the agency of employment, and in effect, buy 1

2 back a certain number of hours of leave previously used, to the extent possible based on the dollar amount of the workers compensation check received. Therefore, it is necessary to assure that hours of leave balance used, from that available at the time workers compensation begins, be tracked as workers compensation leave hours taken. Special earnings codes are established for this purpose and will be discussed later in this document Effective 8/24/09 earnings codes for workers compensation were re-established. These workers compensation leave hours utilized are required to be tracked and added back to the employee s balance, to the extent possible by the dollars available in the workers compensation check required to be turned in to the agency by the employee. Sick leave and annual leave accrual while out on workers compensation is eligible to be accrued only on the net hours used to supplement the workers compensation payment to the extent of the employee s full regular pay (the difference between what workers compensation pays the employee and what he/she would have earned if actively working). Workers comp buy back hours are not allowed to be used in calculation of leave accrual. Since the employee was not at work while out on workers compensation (he/she is out on a workers compensation injury or illness), the hours were, in effect never used (they were bought back), and the employee is considered to be on leave without pay for those hours. Leave is not earned while an employee is in leave without pay status. For taxation purposes, the hours associated with buy back of leave are not subject to federal nor state income tax, since these buy-back hours actually represent the payment of workers compensation benefits to the employee (remember, they turned their check into you). Example: An employee earns $1500 per pay period ($1500/80 = $18.75 per hour) Employee has 250 hours of accumulated Sick Leave at the beginning of Pay Period 1 (for the example, assume there is no annual leave, although annual leave would be handled in the same way) Employee is in the 15+ years category for leave earning (7.384 hours per pay period. Explanation Earned Used Balance Beginning Leave Balance Pay Period #1 The employee is paid his regular salary and earns leave at the regular rate. Pay Period #2 The employee is injured on the job and is away from work for the entire period. He files for WC, but it takes a while to process his paperwork. He decides to use 80 hours of prior accrued sick leave in order to continue being paid. Since he is using leave, he earns leave on the full number of hours used

3 Pay Period #3 The employee receives his WC check for $1000 which equates to 2/3 of his regular salary. This is equivalent to 53.5 hours of time ($1000/$18.75 per hour = 53.5 hours of leave to be bought back. 1. He turns this check in to the agency and is credited in his leave balance for this number of hours. He has bought back 53.5 hours of leave and 53.5 hours are applied to the balance by using the buy back code. 2. He continues to record 80 hours of sick leave used and is paid his full salary. He will buy back some of these hours with his next check. * 3. He earns leave only on the difference between the hours used this period and the hours bought back this period. Since, in effect, the 53.5 hours were never used and the employee was not at work during those hours, he is in leave without pay status for those hours and cannot earn leave while in leave without pay status (80.0 hours minus 53.5 = 26.5) (26.5 X.0923 per hour = 2.446) (previous balance hours) ( minus 80.0) ( plus 2.446) Pay Period #4 The above process repeats itself each pay period. Eventually, the employee may exhaust his accumulated leave balances and will at that time cease turning in his check to the agency and will revert to a full leave without pay status. He will no longer receive a payment from the agency or earn leave until he returns to work. *To determine the amount of leave hours that the employee can buy back, take the gross amount of the workers comp check and divide by the hourly rate in effect at the current time. Ex: $1000 gross WC check/$18.75 per hour = 53.5 hours of leave that he can buy back. 3

4 When the employee goes out on workers compensation, you must notify the employee who is the designated person for the for receipt of workers compensation checks that are required to be turned in to the agency. In the event that the employee turns the physical workers compensation check over to you in human resources, this check must be turned over to the institution s designated person in the finance/accounting department so that the appropriate accounting entries may be made. PeopleSoft Earnings Codes for Workers Compensation As indicated previously, the workers compensation check may take time reach the employee, and it may be necessary to allow the employee to utilize previously earned leave. At this time you will code the leave utilizing the regular leave taken codes of either SLT (sick leave taken), FST (faculty sick leave taken), and ANL (annual leave taken). You will need to use the companion workers compensation leave tracking code to keep a running balance of leave hours taken while on workers Sick Leave SLT Use this code during the initial period of workers compensation when the Compensation check has been received. You must use together with HWS To track these hours as leave hours taken while out on workers HWS Workers Compensation Sick Leave Hours Tracking This code tracks the hours of sick leave used while out on workers BWS Workers Compensation Sick Leave Buy Back This code pays the hours as sick leave, rather than regular hours and adds (buys) the hours to the balance and adjusts for proper payroll taxes on the buy back. Faculty Sick Leave FST Use this code during the initial period of workers compensation when the Compensation check has been received. You must use together with HWF To track these hours as leave hours taken while out on workers HWF Workers Compensation Faculty Sick Leave Hours Tracking This code tracks the hours of faculty sick leave used while out on workers Compensation. BWF Workers Compensation Faculty Sick Leave Buy Back This code pays the hours as faculty sick leave, rather than regular hours and adds (buys) the hours to the balance and adjusts for proper payroll taxes on the buy back. Annual Leave ANL Use this code during the initial period of workers compensation when the Compensation check has been received. You must use together with HWA 4

5 To track these hours as leave hours taken while out on workers HWA Workers Compensation Annual Leave Hours Tracking This code tracks the hours of annual leave used while out on workers BWF Workers Compensation Annual Leave Buy Back This code pays the hours as annual leave, rather than regular hours and adds (buys) the hours to the balance and adjusts for proper payroll taxes on the buy back. No Pay/Leave Without Pay WCN Workers Compensation No Pay This code tracks the number of hours of leave without pay while out on workers comp and subtracts these hours from regular pay to record no pay for these hours. Retirement Considerations TRSL TRSL requires the employer to notify TRSL when a member begins receiving workers compensation and provide the date of the injury. At the beginning of each fiscal year, the employer must provide a list of all members who will continue receiving workers compensation benefits. The member has the option of paying employee contributions on a salary not to exceed the greater of the workers compensation benefits being received or the salary at the time of qualification for workers The employer pays the employer portion on the actual amount on which the employee contributes. If the member pays employee contributions on an amount which is less than the full-time rate at the time of qualification, service credit will be prorated. PeopleSoft workers comp buy back codes automatically consider the wages earned as a result of these codes as pensionable earnings and both employee and employer pension contributions will be taken from these earnings. LASERS LASERS will use any time period after September 1, 1989, during which an employee collected workers compensation benefits, was employed in state service, and did not receive normal service credit, to determine eligibility for retirement. LASERS does not use this service credit when computing the members retirement benefit. The agency must notify LASERS of any period of time an employee is receiving workers Members should speak to LASERS for periods of workers compensation prior to 9/1/89. PeopleSoft workers comp buy back codes automatically consider the wages earned as a result of these codes as pensionable earnings and both employee and employer pension contributions will be taken from these earnings Additional questions regarding workers compensation and retirement benefits should be directed to the retirement system. 5