Payment & Deduction Calculation

Question

The no loss / no gain principle is a payroll process ensuring that an
employee doesn’t receive more or less pay when they are absent for
sickness reasons than if they were at work.
The ‘No loss / no gain’ principle applies to the following employees if
they are on Short Term Sick Leave or WCB:
• Regular Full Time,
• Temporary Full Time,
• Regular Part Time (with Benefits),
• Job Share (with Benefits).
There are 2 different ‘No Loss / No Gain’ rules for STSL and WCB.
STSL
Employees can be on STSL for no longer than 2 weeks.
There is no WCB reimbursement in this case.
Because the STSL payment is non-taxable, the employee could get a
higher pay being on STSL than being at work.
For this reason, an adjustment needs to be made to their earnings, so
that the ‘take home pay’ does not change while the employee is on STSL.
The difference resulting from the calculation represents the ‘no loss /
no gain’ earnings.
WCB
Calculation
For WCB absences, the process is as follows:
1. Calculate ‘Regular Take Home Pay’, i.e. all regular earnings for
the pay period, plus the number of WCB hours multiplied by the
employee’s rate of pay.
2. Calculate the Gross-to-Net pay based on the Regular Take Home
Pay (Net #1).
3. Calculate the Gross-to-Net pay based on the earnings excluding
the WCB hours (Net #2).
4. Add the estimated WCB reimbursement to Net #2. *
5. Calculate the difference between Net #1 and Net #2. The result
is the ‘Taxable Supplement’.
6. Redo steps 2 to 5 including the Taxable Supplement, until the
difference is negligible (TBD).
Because of concurrent employeement we are unable to capture the
information.
Please advise us how to take care this issue with conccurent employeemt.
Thanks
JOhn

Answer 1

Are you not using Arears? Health Benefits are not able to be deducted if no gross earnings are available. You can use arrears to keep track of what an employee will owe for their helath insurance upon their return.  There are ways to set up payments when an employee returns,make payments to the employer while they are out on leave by brining in cash or a personal check, or can be deducted before they leave in order to keep the arrears buckett cleared.
However, if your situation is that the Employer is wanting to cover the cost of the employee benefits while someone is out on leave then work with your FI team to see how they would want to accomodate this process. This would work if you are not using arrears at all.  If arrears are being used and the Employer wants to pay the coverage for them then you need to set up a payment that would allow for benefits to be paid.
I am not sure whic situation you are really in and if you could provide more about:
Are you using Arrears
   Which rule for Arrears did you select (Take all or nothing, Take all, Take what you can and forgive the rest.....)
Do you want to use Payrment options
Do you want the ER to just cover it?
Just as a side note, you may need to check the health plan. If it is a Cafateria Plan and it is allowing for the health insurance to be pre tax, the rule to allow those pre tax dollars on the W-2 are ONLY applicable if it is actually coming out of earnings earned by the employee most of the time.  Just an FYI