Workers' compensation overview

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The application provides a list of available workers' compensation classification codes (or classes) and descriptions for each state in the Setup > Firm Information > Workers' Compensation Codes screen. In the Workers' Compensation tab of the Setup > Clients screen, you can select codes that your client has been assigned along with an associated rate for each code. The codes and rates are made available for any states in which the client does business - meaning all states that are available to them in the Payroll Taxes tab of the Clients screen.

The following procedures explain the client and employee workers' compensation setup processes, how to exclude certain payroll items and accruable benefits from workers' compensation calculations, how to run a Workers' Compensation report, and information about limits and preferred partner relationships with pay-as-you-go providers.

See also: Setting up workers' compensation information for a client

Adding workers' compensation codes for the client

  1. Choose Setup > Clients, highlight the appropriate client in the Client list, and click the Edit button.
  2. Click the Workers' Compensation tab and, in the Workers' Compensation grid, select the state and code from the drop-down lists. The states available in the list reflect the states available to the client in the Payroll Taxes tab.

    Note: You can add a new Workers' Compensation code on the fly by entering the code in the Code field. The application displays a prompt, asking if you would like to add the code. Click Yes to open a dialog version of the Workers' Compensation Codes screen where you can enter the new code and description.

  3. Enter or select the appropriate General Ledger liability and expense accounts to be used when journal entries related to the accrual of workers' compensation amounts are created. The account numbers entered here will be used by default for all the client's employees, but can be modified at the employee level if necessary.
  4. Enter the appropriate rate, effective date, and experience modification percentage by clicking the Ellipsis button button next to the Rate column and entering them in the Workers' Compensation Rate dialog.

    Note: Additional fields (Employer rate and Employee rate) are available for Washington clients for Washington L & I.

  5. Select the agent to be used for the creation of liabilities for the code. The drop-down list contains all Payroll Agent type vendors set up for the client.
  6. Click the Enter button to save the client information.

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Setting up an employee for workers' compensation

  1. Choose Setup > Employees, select the appropriate client at the top of the screen, highlight the appropriate employee in the Employees list, and click the Edit button.
  2. Click the Workers' Compensation tab. The grid is populated with the Workers' Compensation codes that are set up for the client in the Workers' Compensation tab of the Clients screen. Mark the Active checkbox next to a code to activate it for the employee.

    Note: To activate specific location/department combinations for the employee, click the Ellipsis button to open the Workers' Compensation Detail dialog. When some combinations are marked as active in the Detail dialog and others are not, the Active checkbox in the Worker's Compensation grid displays as mixed.

  3. To specify the GL liability and expense accounts to be used for the premium amount for all location/department combinations, select the accounts from the GL Liability and GL Expense drop-down lists.

    Note: To specify GL liability and expense accounts for specific department/location combinations, click the Ellipsis button to open the Workers' Compensation Detail dialog. When the GL liability and expense accounts for a location/department combination in the Detail dialog differ from the accounts specified for the other combinations, the GL Liability and GL Expense fields in the Worker's Compensation grid displays (See details). Show me.

  4. If the employee is to be excluded from workers' compensation, mark the Exempt checkbox.

    Note: When a state and code are selected and this checkbox is marked, the wages will be calculated on the check as excluded, making the premium zero.

  5. Click the Enter button to save the employee information.

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Excluding payroll items from workers' compensation calculations

  1. Choose Setup > Payroll Items, select the client at the top of the screen, and then highlight the appropriate payroll item in the Payroll Items list.
  2. Click the Main tab and click the Edit button.
  3. In the Exclusions section, choose whether to exclude all, selected, or no jurisdictions from workers' compensation calculations for this payroll item.

    Note: Choosing the Selected option makes the Ellipsis button button available. Click the button to open the Workers Compensation Exclusion Details dialog, where you can select the jurisdictions to be excluded from workers' compensation calculations.

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Calculation details for Workers' Compensation

This section explains how the application calculates workers' compensation amounts, explains the terms used in the description, lists any state-specific calculation differences, and provides an example of how the application calculates workers' compensation amounts.

How it calculates on payroll checks

Example

Gross Wages = $1500.00
Excluded Wages = $500.00
Excluded Overtime Premium = $250.00
Experience Rating = 75.00%
Workers' Compensation Rate = 1.0%

How it displays on the Detailed Workers' Compensation report

Example

Gross Wages = $1500.00
Excluded Wages = $500.00
Excluded Overtime Premium = $250.00
Experience Rating = 75.00%
Workers' Compensation Rate = 1.0%

Definition of terms

State-specific calculation differences

Certain states differ from the usual calculations.

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Excluding accruable benefits from workers' compensation calculations

  1. Choose Setup > Accruable Benefits. Select the client at the top of the screen, and click the Edit button.
  2. Highlight the appropriate accruable benefit in the Accruable Benefits list.
  3. In the Exclusions section, choose whether to exclude all, selected, or no jurisdictions from workers' compensation calculations for this benefit.

    Note: Choosing Selected makes the Ellipsis button button available. Click the button to open the Workers Compensation Exclusion Details dialog, where you can select the jurisdictions to be excluded from workers' compensation calculations.

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Running a Workers' Compensation report

  1. Choose File > Print Reports.
  2. Double-click either the Workers' Compensation - Condensed report or the Workers' Compensation - Detailed report (both in the Payroll folder) to move it to the Selected pane.
  3. With the report highlighted in the Selected pane, choose the appropriate report options on the right side of the screen.
  4. Preview or print your report by clicking the appropriate button.

    Note:

    • The Workers' Compensation reports list only the payroll checks that are entered after workers' compensation information has been set up for the client.
    • For more information about printing reports, please review the Printing reports and report profiles procedure.

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State workers' compensation limits

Click the link for a state to view the workers' compensation limit amount, the effective date of the limit, and any additional information regarding the limit. States not listed here do not have workers' compensation limits.

You can choose Officer as the Reporting Type in the Personal tab of the Setup > Employees screen.

  • Limit. $122,200.00
  • Effective date. 1/1/2017
  • Additional information. Affects codes 7610, 9151, 9156, 9181, and 9610 and officers.
  • Limit. $135,200.00
  • Effective date. 1/1/2017
  • Additional information. Affects officers that elect coverage and only under the DIP plan. The limit is $2,600 per week or $135,200.00 per year.
  • Limit. $53,560.00
  • Effective date. 10/1/16
  • Additional information. Affects officers. The limit is $1,030.00 per week or $53,560.00 per year.
  • Limit. $98,800.00
  • Effective date. 1/1/2017
  • Additional information. Affects officers. The limit is $1,900.00 per week or $98,800.00 per year.
  • Limit. $213,408.00
  • Effective date. 4/1/2017
  • Additional information. Affects officers and codes 9178 and 9179. The limit is $4,104.00 per week or $213,408.00 per year.
  • Limit. $88,400.00
  • Effective date. 4/1/2016
  • Additional information. Affects officers and codes 9178 and 9179. The limit is $1,700.00 per week or $88,400.00 per year. Code 9186 previously had a limit of $72,800, but has no limit effective 4/1/16.
  • Limit. $35,100.00
  • Effective date. 7/1/2017
  • Additional information. Affects all codes.
  • Limit. $130,000.00
  • Effective date. 1/1/2017
  • Additional information. Affects officers and codes 7610, 9178, 9179, 9610, 9156, 9186. The limit is $2,500.00 per week or $130,000.00 per year.
  • Limit. $36,000.00
  • Effective date. 1/1/1995
  • Additional information. Affects all codes.
  • Limit. $106,600.00
  • Effective date. 10/1/2016
  • Additional information. Affects officers. The limit is $2,050.00 a week or $106,600.00 per year.
  • Limit. $70,356.00
  • Effective date. 7/1/2017
  • Additional information. Affects the following codes:
    0042, 0050, 0106, 1322, 3365, 3719, 3724, 5020, 5022, 5037, 5040, 5057, 5059, 5069, 5102, 5146, 5160, 5183, 5188, 5190, 5213, 5215, 5221, 5222, 5223, 5348, 5402, 5403, 5437, 5443, 5445, 5462, 5472, 5473, 5474, 5478, 5479, 5480, 5491, 5506, 5507, 5508, 5535, 5537, 5551, 5605, 5606, 5610, 5645, 5651, 5703, 5705, 6003, 6005, 6017, 6018, 6045, 6204, 6206, 6213, 6214, 6216, 6217, 6229, 6233, 6235, 6236, 6237, 6251, 6252, 6260, 6306, 6319, 6325, 6400, 7538, 7601, 7605, 7611, 7612, 7613, 7855, 8227, 9534, and 9554
  • Limit. $127,400.00
  • Effective date. 4/1/2017
  • Additional information. Affects officers. The limit is $2,450.00 per week or $127,400.00 per year.
  • Limit. $62,400.00
  • Effective date. 4/1/2006
  • Additional information. Affects codes 9178, 9179, 9186, and 4360 and officers. The limit is $1,200.00 per week or $62,400.00 per year.
  • Limit. $161,200.00
  • Effective date. 11/1/2015
  • Additional information. Affects officers.
  • Limit. $73,008.00
  • Effective date. 1/1/2016
  • Additional information. Affects officers. The limit is $1,404.00 per week or $73,008.00 per year.

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Preferred partners - The Hartford and InsurePay

Thomson Reuters has developed a preferred-partner relationship with both The Hartford Financial Services Group, Inc. (XactPAY) and InsurePay to accommodate your need for pay-as-you-go workers' compensation insurance for your live payroll processing clients.

InsurePay overview

XactPAY overview

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