With so many organizations working on modified programing or closed down entirely, there are many staff who are either working from home, or are being paid a full or partial salary but not actively working. In either case, how you report these salaries may impact your premium audit—which in turn may impact your Workers’ Compensation insurance premiums.
With this in mind, we have prepared the following guidance to ensure accurate reporting and minimal disruption to your operations:
- It is important to track all payroll whether the employee is working from home, or is receiving pay but not working.
- Most payroll systems will have the ability to categorize types of pay. (e.g. salary, hourly, overtime, bonus.) Check if unused categories are available that can be used to distinguish between working from home payroll, and receiving pay but not working.
- If your payroll system allows you to input the four digit WC class code, using the code for working from home (8810) will help you when it comes time to do your premium audit. (Paid but not working will be excluded from the audit, but you may need to input a code like 0000.)
- Alternatively, if a letter-based code is needed, use Covid WH and Covid NW for working from home and paid but not working respectively.
- If you are unable to use a payroll system to track this information, then keep a manual log for each employee.
- In some instances, work-from-home employees may still be engaging in activities that are similar to their on-site duties (e.g. virtual fitness classes.) In these instances, it is best to code the employee using their typical code/category—as opposed to work-from-home which is designated as clerical work.
- It will be important to revert all employees back to normal when and if they return to regular duties.
We know that managing payroll codes and categories can be complicated, even in normal times. Hopefully the information above helps to clarify how best to proceed during this pandemic.
As always, please do not hesitate to reach out to our Workers’ Compensation team should you have any questions about how to manage your payroll.