Quick Description

Workers' compensation deductions are created using the Deductions/Benefits Maintenance window (PR> Maintenance> Deductions/Benefits). Create the deduction and attach it to an employee record (PR> Maintenance> Employee> Deductions tab). The deduction only determines that a workers' compensation deduction should be deducted from the employee’s paycheck, the rates used to calculate the workers' compensation amounts are set up using the workers' compensation table (PR> Maintenance> Workers' Compensation). The workers' compensation rates created in the workers' compensation table can be attached to an employee record, pay code or rate code. When paychecks are created (PR> Computer Checks> Time Cards), the workers' compensation rate code attached to the time card line item (populated based on the employee record, rate code or pay code attached to the line item) determines how the workers' compensation deduction attached to the employee record will be calculated on the paycheck.

Setup

The Setup window (PR> Utilities> Setup) has two options that affect how workers' compensation will be calculated. Check the Use Default Work Comp Code for Salaried Employees toggle (General tab) if you want workers' compensation to calculate using the default workers' compensation code attached to the employee record regardless of the workers' compensation codes attached to the pay code or rate code on the time card line item. The default workers' compensation code is set up in the Employee Maintenance window (PR> Maintenance> Employee> Financial tab). This option could create workers' compensation premiums that would be unacceptable or inappropriate for state reporting.

The Workers' Compensation Calculation Per field is used in conjunction with the workers' compensation table (PR> Maintenance> Workers' Compensation). Use the Workers' Compensation Calculation Per drop-down menu to select how you would like to calculate workers' compensation. Your state may require you to calculate workers' compensation based on the hours worked or the wages of the employee. The selection in the Workers' Compensation Calculation Per drop-down will affect the functionality of the Per field on the Workers' Compensation Maintenance window (PR> Maintenance> Workers' Compensation). The Per field is used to define the basic workers' compensation unit and affects how workers' compensation is calculated.

Workers' Compensation Code Maintenance

The Workers' Compensation Maintenance window (PR> Maintenance> Workers' Compensation) is used to create and maintain the workers' compensation table. This table will be used to calculate the workers' compensation deductions. Create a separate line item for each workers' compensation code that calculates at a different rate. The Setup window (PR> Utilities> Setup> Deductions tab> Workers' Compensation Calculated Per drop-down menu) determines if the workers' compensation table will calculate based on the wage amount or the hours.

The workers' compensation code rates created in this table can be attached to employee records, pay codes or rate codes. When a workers' compensation is calculated on a paycheck, the workers' compensation code attached to the time card line item determines which rate to use on the workers' compensation table.

Deductions

The Deduction/Benefit Maintenance window (PR> Maintenance> Workers' Compensation) is used to create and maintain workers' compensation deductions. Deductions are set up as workers' compensation deductions by setting up the deduction to calculate based on the workers' compensation table (PR> Maintenance> Deduction/Benefit> Calculation tab> Calculation Method drop-down – From table, and Wage Type drop-down – Workers' Compensation Insurance).

If a deduction is set up as company paid (PR> Maintenance> Deduction/Benefit> General tab> Select Benefit in the Type drop-down menu), the deduction will calculate based on the employer portion of the workers' compensation (PR> Maintenance> Workers' Compensation> Employer Dollars field). If Deduction is selected in the Type drop-down menu, the deduction will calculate based on the employee portion of the workers' compensation code.

Employee Record 

After the workers' compensation rate codes and workers' compensation deductions have been created, attach them to employee records. Employee records are created and maintained using the Employee Maintenance window (PR> Maintenance> Employee).

When a paycheck is generated on an employee, only the deductions attached to the employee record will display on the paycheck. Attach a workers' compensation deduction to the employee record using the Deductions tab.

Attach a default workers' compensation code to the employee record (Financial tab> Workers' Compensation field). The workers' compensation on a time card determines which rate to use on the workers' compensation table when workers' compensation is calculated. The workers' compensation code attached to the employee record is the default workers' compensation code that will be used on when time cards are generated. This workers' compensation code will be overridden if there is a workers' compensation code attached to the pay code or rate code on the time card line item. If the Use Default Work Comp Code for Salaried Employees toggle is checked on the Setup window, the default workers' compensation code will be used to calculate the workers' compensation even if there is a workers' compensation code attached to the pay code or rate code on the time card line item.

Attach a Workers' compensation code to a rate code

Rate codes are created and maintained using the Rate Code Maintenance window (PR> Maintenance> Rate Codes). If you attach a workers' compensation code to a rate code, the workers' compensation code on the rate code will override the workers' compensation code on the employee record when the rate code is attached to a time card line item.

Leave the workers' compensation field on the rate code blank if you would like the workers' compensation code to populate on a time card line item based on the default workers' compensation code attached to the employee record.

Attach a Workers' compensation code to a pay code

Pay codes are created and maintained using the Pay Code Maintenance window (PR> Maintenance> Pay Codes). If you attach a workers' compensation code to a pay code, the workers' compensation code on the pay code will override the workers' compensation code on the employee record and the rate code when the pay code is attached to a time card line item.

The pay code can also be used to create a workers' compensation multiplier. Enter a multiplier in the Workers' Compensation Multiplier field if you would like the workers' compensation to be modified by a multiplier. When a paycheck is generated (PR> Computer Checks> Calculate Payroll), the workers' compensation amount will be modified by the workers' compensation multiplier on the pay code.

Workers' Compensation Hierarchy

Reports

The Workers' Compensation Report (PR> Reports> Workers' Compensation) displays workers' compensation information.