Workers' Compensation payroll

Work-related disability may result in a loss of wages. That loss may be partially off-set by wages earned on a reduced work schedule and by payments of Total Temporary Disability (TTD) made by the University's Workers' Compensation carrier, Sedgwick CMS. TTD payments provide wage replacement of up to 2/3 of gross wages, up to the maximum as designated by the law.

The remainder of the wage loss would normally go uncompensated. However, if the employee is eligible for the Supplemental Sick Leave and Vacation Leave program, he or she may supplement TTD with Sick Leave only (Option A) or Sick Leave and then Vacation Leave (Option B). Once exhausted, the employee would then be entitled to receive Extended Sick Leave (ESL). An employee may also choose No Use of Sick Leave or Vacation Leave (Option C). These options result in the following:

  • Option A (doc) - Accrued Sick Leave hours may be used to fully off-set the remainder of the wage loss. SL will bring Total Income (including TTD payments) up to 100 percent of the employee's regular earnings plus shift differential.
  • Option B (doc) - Subsequent to exhaustion of Sick Leave, accrued Vacation Leave (VL) hours may be used to fully off-set the remainder of the wage loss. VL will bring Total Income (including TTD payments) up to 100 percent of the employee's regular earnings plus shift differential.
  • Extended Sick Leave (doc) - If the employee is eligible for the Extended Sick Leave (ESL) program, then, subsequent to exhaustion of the Supplemental SL/VL full off-sets, the remaining wage loss may be partially off-set by use of ESL hours for a maximum of twenty-six (26) calendar weeks. ESL will bring Total Income (including WC payments) up to 80 percent of the employee's regular earnings plus shift differential.
  • Option C (doc) - Neither Sick Leave nor Vacation Leave hours will be used to supplement TTD payments. The employee will be placed on LWOP and will not be eligible for Extended Sick Leave and disability benefits under the University's Supplemental Disability Insurance Plan, and s/he will need to pay the full cost of all University Health Insurance premiums once the FMLA period has ended.
DMS sends the Sick Leave/Vacation Authorization Form for Extended Sick Leave Benefit (pdf) directly to the employee. You will be notified of their choice by email. If they have not made an election within fourteen (14) calendar days, Sick Leave (Option A) will be used to supplement TTD. Once TTD payments have begun, the election cannot be changed. Besides the income supplements of SL, VL, and ESL, the eligible employee who elects to participate in the Supplemental SL/VL and Extended Sick Leave programs (Options A and B) also receive other benefits as a supplement to TTD payments including:
  • Continued credit for Holiday Leave hours while using SL, VL, or ESL as a supplement.
  • Continued credit for new SL and VL accruals while using SL or VL as a supplement.
  • Banking of new SL and VL accruals while using ESL, and credited upon return to full or reduced-schedule work.
  • Banking of new SL and VL accruals after ESL is exhausted, and credited upon return to full or reduced-schedule work (provided WC disability continues to be medically certified).
  • Payment of the employee's and the employer's contribution for medical health insurance premiums, while supplementing TTD payments with SL/VL.
  • Payment of optical and dental premiums if the employee is eligible for the 12 weeks of Family and Medical Leave.
  • UC Supplemental Disability payments after ESL are exhausted, if enrolled in the plan.
  • Continued payment of Medical plan premiums after ESL is exhausted (UC Contingency Fund).
  • Retirement Service Credit for WC payments as well as hours worked; HL, SL, VL, and ESL hours.

Please view these charts (pdf) for a visual reference of the Supplemental benefits.

If the employee is working a reduced schedule, the payroll processor will need to advise Sedgwick and report the hours worked using the Weekly Report of Reduced-Schedule Wages form (pdf). If an employee is working a reduced schedule, SL, VL, or HL hours should not be reported to Sedgwick. SL, VL, and HL are used later by the payroll processor to supplement the wages and the WC payments.

If the employee returns to full work, the payroll processor advises Sedgwick, so as not to create a TTD overpayment.

Steps and tools

The following steps are performed to complete Workers' Compensation payroll:

  1. Use the W/C Leave Bank Calculator (recommended method) or the W/C Leave Bank Calculation Sheet (pdf) to convert W/C payments to:
    • Hours, in a W/C Leave Bank, and
    • Dollars, by which to reduce pay
  2. Use the Option A or Option B Leave Bank Calculator to determine leave usage, accruals, eligibility for ESL, and UC payment owed. View examples for Option A (pdf) and Option B (pdf).
  3. In order to Process the UC Payment of Wages (doc), reduce pay on the AP or LX form by the W/C Dollars, using DOS code WCR (Campus Payroll Forms). This is necessary to avoid Overpayment of Supplemental Benefits (doc). Resources are listed below:
  4. If all Supplemental SL/VL/ESL is exhausted, coordinate the Contingency Fund (doc) and Application for UC Supplemental Disability (doc).
  5. If TTD ends and the employee is not back to work, coordinate personal payments for Continuity of Health Plan Coverage (doc).
  6. Additional resources: