This chapter contains the following topics:
Section 9.1, "Understanding State-Specific Workers' Compensation Requirements"
Section 9.3, "Processing the Washington Workers Comp Quarterly Report (R073648)"
The information included in this section discusses only the portion of Workers' Compensation reporting that deals with specific states within the United States.
Workers' compensation codes are four-digit alphanumeric codes that are stored in user defined code (UDC) 00/W. However, the state of Wyoming has issued several six-digit Workers' Compensation codes. To enter Workers' Compensation insurance information for Wyoming, you must first enter these codes into UDC 00/W.
Because UDC 00/W is a four-digit UDC table, to accommodate the six-digit codes for Wyoming, you must enter the six-digit code in the Second Description column of the UDC table. For example, to set up Workers' Compensation codes 123454 (management), 123455 (administrative), and 123456 (electrician), you might set up UDC 00/W as illustrated in this table:
| Code | Description 1 | Description 2 |
|---|---|---|
| 123A | Management | 123454 |
| 123B | Administrative | 123455 |
| 123C | Electrician | 123456 |
To comply with government regulations, all employers must provide industrial insurance coverage for all of their employees who work within the state of Washington. Industrial insurance is similar to Workers' Compensation, and is calculated and tracked by using many of the Workers' Compensation programs, fields, and tables.
Typically, industrial insurance premiums are paid by employers and employees. However, employers have the option of paying the employee-paid portion of the premium for their employees. The amount of the premium is determined by the risk classifications that are assigned to the business by the state of Washington. There are approximately 300 risk classifications. Each classification represents a business activity and is associated with a state-specified rate. This rate is the composite rate and is comprised of these components:
Accident fund premium, which is paid by the employer.
Medical premium, which can be paid by the employer and the employee.
Supplemental pension assessment, which can be paid by the employer and the employee.
The industrial insurance premium total for each employee is determined by multiplying the number of hours that the employee works by the composite rate that is associated with the employee's risk classification. An employee might work in multiple risk classifications during a pay period.
Only the hours that are actually worked by an employee should be used to calculate the industrial insurance premium. Sick, vacation, holiday, and other leave hours should not be included in the number of hours worked. Additionally, each hour of overtime that an employee works should be treated as one hour for calculation purposes. The employer has the option to pay both the employer and the employee portion of the premium.
The state of Washington issues rate notices to employers. The notice includes this information:
The risk classification codes that are associated with the employer's business.
The composite rates for each risk classification that is assigned to the employer's business.
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Note: Industrial insurance coverage is mandatory for most employees who work in Washington. However, some occupations and circumstances might exempt some employees from coverage. Contact the local taxing authority for additional information about industrial insurance exemptions. |
Enter a user-defined code (07/DM) that specifies whether workers' compensation insurance is based on a percentage of employees' pay or on the number of hours that the employees work.
For this task, enter H in this field.
Enter the first date in a range of dates.
Enter a code that identifies a specific organization, fund, or other reporting entity. The company code must already exist in the Company Constants table (F0010) and must identify a reporting entity that has a complete balance sheet. At this level, you can have intercompany transactions.
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Note: You can use company 00000 for default values such as dates and automatic accounting instructions. You cannot use company 00000 for transaction entries. |
Enter the last date in a range of dates.
Enter the limit for General Liability. Depending on the benefit method chosen, this limit could be annual or monthly. General Liability is not calculated on amounts that exceed this limit.
If a limit does not exist, leave this field blank and the system uses the default value 9,999,999.00. For this task, leave the field blank, or enter 9999999.
Enter a code that identifies a table of pay, deduction, and benefit types that define the basis for various payroll calculations. These tables are used in several processes; such as defining insured pay types for workers compensation and identifying pay types to be included in automatic timecard generation.
Step progression processing uses valid pay types from the Workers Compensation Table. You can add a code to the user-defined code list (07/IP), and then use that code to define a range of pay types in the Workers Compensation Table (for example, STP for Step Progression). The Step Progression table uses the range of defined pay types to determine when an employee has met the step progression requirements and automatically moves to the next step. You must set up a step progression pay table if you are using the Hourly method for step progression processing. If you are using the Pieces method, you might want to set up pay types for individual pieces, and then enter the pieces pay types in the pay table. It is not necessary to set up a pay table if you are using the Days method.
Enter a code that identifies a geographical location and the tax authorities for an employee work site, including employee and employer statutory requirements. In the Vertex payroll tax calculation software, the tax area code is synonymous with GeoCode. To determine the valid codes for the location, refer to the documentation for the tax calculation software that you are using.
For task associated with industrial insurance, enter 48 in this field.
Enter a code to specify whether the workers compensation premiums were employee or company paid.
Values are:
E: Employee Paid
C: Company Paid
Enter a user-defined code (00/W) that represents a workers' compensation insurance (WCI) code. This code should correspond to the classifications on the periodic workers' compensation insurance reports.
For this task, this field corresponds to the risk classification code, as provided by the state of Washington. You must enter these codes in UDC 00/W before you can enter them in this field.
Enter the limit for Workers Compensation. Depending on the benefit method chosen, this limit could be annual or monthly. Workers Compensation is not calculated on amounts that exceed this limit.
If a limit does not exist, leave this field blank and the system uses the default value 9,999,999.00. For these tasks, leave the field blank, or enter 9999999.
Enter the rate as specified by the Workers Compensation Insurance company. It is multiplied by the Experience Rating prior to the calculation of premium. The Rate is represented as a decimal fraction.
For risk classification tasks, enter the rate that is associated with the risk classification code.
This section provides an overview of Industrial Insurance setup, lists a prerequisite, and discusses how to:
Enter employer-paid risk classification information.
Enter employee-paid risk classification information.
Set up the Industrial Insurance deduction.
For the system to accurately calculate premiums and produce reports for industrial insurance, you must set up industrial insurance information in the system. Setting up industrial insurance information includes these tasks:
Entering risk classification codes in UDC table 00/W.
Creating pay basis tables that include only the pay types that should be used in calculating industrial insurance premiums.
Entering risk classification information for employer-paid industrial insurance premiums.
Entering risk classification information for employee-paid industrial insurance premiums.
Setting up the employee-paid industrial insurance deduction.
Assigning risk classification codes to employee timecards.
After the organization receives a notice from the state of Washington that specifies the risk classification codes that are associated with the organization, you must add those codes to UDC table 00/W. This UDC table also holds Workers' Compensation codes.
Then, using the Workers Compensation Insurance Basis Table program (P079071), you must create pay basis tables that include only the pay types that should be included when determining the number of hours that an employee works. Because the industrial insurance premium is based only on hours that the employee actually works, you should not include sick, vacation, holiday, or other leave pay types in the pay basis tables that you use for industrial insurance calculations.
After you have entered risk classification codes and created pay basis tables, you must enter information about each risk classification code by using the Workers Compensation Insurance Revisions program (P079211). At a minimum, you must create an employer-paid record for each risk classification code and company combination within the organization. If the organization decides to deduct the employee-paid portion of the premium, you must also create a record for the employee-paid portion of the premium for each risk classification code and company combination.
If the organization decides to collect the employee-paid portion of the premium from the employees' pay, you must also set up a deduction to calculate this amount.
After you have entered all of the risk classification information into the system, you can assign risk classification codes to employee timecards and process those timecards through the payroll cycle. The history information that is created during the payroll cycle is used to generate the report that you submit to the state of Washington.
To calculate industrial insurance premiums correctly, you must enter information about the risk classifications in which the employees work. Risk classification codes are defined by the state of Washington, and each code is associated with a specified rate. These codes are stored in UDC 00/W.
Using the Workers Compensation Insurance Revisions program (P079211), you must enter at least one record for each company and risk classification combination. The risk classification codes that you need to set up for each company are determined by the state of Washington.
Industrial Insurance premiums include an employee- and employer-paid portion. Employers must pay the employer-paid portion of the premium; however, employers can also pay the employee-paid portion of the premium for their employees.
If the organization decides to have the employee-paid portion of the premium deducted from each employee's pay, you must set up an employer and an employee record for each company and risk classification code. The employer record must have a C (Company) in the Trans. Class field, along with the employer risk classification rate in the Workers Comp Rate field. The employee record must have an E (Employee) in the Trans Class field, along with the employee risk classification rate in the Workers Comp Rate field. This table illustrates how you might enter information for risk classification code 8810 if the employee pays a portion of the premium:
| Tax Auth | Co | Trans. Class | WCI Code | % H | WC Rate | WC Limit | GL Rate | GL Limit | Pay Table |
|---|---|---|---|---|---|---|---|---|---|
| 48 | 00001 | E | 8810 | H | .07 | 9999999.00 | 0 | 9999999.00 | WA |
| 48 | 00001 | C | 8810 | H | .05 | 9999999.00 | 0 | 9999999.00 | WA |
If the organization pays both the employer and employee portions of the premium, you must set up only one record for each company and risk classification code combination. This record must have a C (Company) in the Trans. Class field, and the rate in the Workers Comp Rate field should be the total of the employer and employee risk classification rate. For example, if the rate for the employer portion of the premium is .07 and the rate for the employee portion is .05, you must enter .12 in the Workers Comp Rate field for this record. This table illustrates how you might enter information for risk classification code 8810 if the organization pays the entire premium:
| Tax Auth | Co | Trans Class | WCI Code | % H | WC Rate | WC Limit | GL Rate | GL Limit | Pay Table |
|---|---|---|---|---|---|---|---|---|---|
| 48 | 00001 | C | 8810 | H | .12 | 9999999.00 | 0 | 9999999.00 | WA |
Before you can enter risk classification information, you must set up pay tables that include only the pay types that you want to include in the premium calculation. Because industrial insurance premiums are based on the number of hours that an employee actually works, you do not want to include leave pay types such as sick time, vacation time, or holiday time in the basis table.
If employees are responsible for paying the employee-paid portion of Washington Industrial Insurance premiums, you must set up a deduction to calculate and deduct the premium during the payroll cycle. If the organization pays this portion of the premium for the employees, you do not need to set up this deduction.
When you set up the deduction, you must specify this information to ensure that the employee-paid portion of the premium is calculated and deducted correctly:
The deduction should calculate for all employees that work in the state of Washington.
The source of calculation for the deduction should be set up as the current period.
The deduction should use the Workers Comp. Ins. Table method of calculation.
The deduction should be set up to calculate during every pay period.
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Note: You can review the amounts that calculate for this DBA by processing the D/B/A Register (R073062) during the payroll cycle.You cannot manually override the amount of this deduction using the One Time Override program (P07OTO1). Overriding amounts for DBAs that are set up with a Method of Calculation of 7 is prohibited because changing these amounts might cause the information on government reports to be incorrect. If you feel that the amount that calculates for this deduction is incorrect, you can change any of this information and reprocess pre-payroll to recalculate the amount of the deduction: The value in the Workers Comp Code field on any or all of the employee's timecards The rates in the Workers Compensation Insurance tables that are associated with the values in the Workers Comp Code field on the employee's timecards |
After you set up the system to calculate industrial insurance, you can begin to process industrial insurance premiums. For the system to accurately calculate these premiums, a risk classification code must be included in the Workers' Comp Code field on each timecard for employees who work in Washington.
You can populate employee timecards with risk classification codes by entering the codes in these ways:
At the employee level
At the job level
At the timecard level
To assign risk classification codes at the employee level, you must enter a value in the Worker's Comp field on the National and Fiscal Data - USA form. You might assign risk classification codes at the employee level for employees who typically work in one risk classification area or for employees whose timecards are generated automatically during the pre-payroll process. Entering a risk classification code at the employee-level ensures that all of the timecards that are entered or created for the employee will include that risk classification code unless it is overridden at the job or timecard level.
To assign risk classification codes at the job level, you must enter a value in the Worker's Comp. field on the Job Entry U.S. Legislative/Regulatory Data form. You might assign risk classification codes at the job level if employees change jobs frequently or if they work in multiple jobs within a pay period. When you enter a job code on an employee's timecard, the system disregards the employee-level risk classification code and automatically populates the Worker's Comp field on the timecard with the value that is in the Worker's Comp. field for that job. If this field is not populated, the system uses the code that was set up at the employee level. If necessary, you can then override this field on the timecard.
To assign risk classification codes at the timecard level, you must enter a value in the WCI Code field on the timecard. You can use this method to enter risk classification codes for employees who do not have a code assigned to them at the employee or job level. Additionally, you can use this method to override codes that were entered at the employee or job level.
Before you complete the tasks in this section:
Enter all of the risk classification codes that the organization uses in UDC table 00/W.
Contact the local taxing authority for information about which risk classification codes the organization uses.
Create pay basis tables that include only the pay types that you want to include in the premium calculation.
Verify that the employees have been entered into the system.
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See Also: |
| Form Name | FormID | Navigation | Usage |
|---|---|---|---|
| Work With Workers Compensation Insurance Revisions | W079211A | Taxes and Insurance Setup (G07BPTI4), Workers Compensation Ins. Rates | Review Workers' Compensation rates. |
| Workers Compensation Insurance Revisions | W079211B | On the Work With Workers Compensation Insurance Revisions form, click Add. | Enter employer-paid risk classification information. |
| Work With PDBAs | W059116A | Pay/Deductions/Benefits Setup (G05BD4), PDBA Setup | Select pay type, benefit, deduction, or accrual. |
| Basic DBA Information | W059116E | On the Work With PDBAs form, click Add. | Set up the Industrial Insurance deduction. |
Access the Workers Compensation Insurance Revisions form.
Complete this task for each company for which you need to enter employer-paid risk classification information.
Access the Workers Compensation Insurance Revisions form.
Complete this task for each company for which you need to enter employee-paid risk classification information.
Access the Basic DBA Information form.
To set up the Industrial Insurance deduction:
Complete the DBA Code and Paystub Text fields.
Enter I in the Print Method field to print this deduction on employee payments.
Enter G in the Source of Calculation field to specify that the deduction should calculate for the current period.
Enter 7 in the Method of Calculation field.
Enter Y in each of the Pay Period of the Month fields to ensure that the deduction calculates during each payroll cycle, and then click OK.
On the General Accounting/Arrearage Information form, complete any of the optional fields and then click OK.
On the Basis of Calculation form, click OK.
On the Advanced DBA Information form, select the Calculate for All Emp option.
To specify that the deduction must calculate for all employees who work in the state of Washington, enter 48 in the Tax Area (Work) field, and then click OK.
Paystub Text
Enter the text that you want the system to print on the employee's paystub. If you are using the JD Edwards EnterpriseOne Time and Labor system, the system does not create payments. However, this field is required to complete the form. Generally, you enter a description of the PDBA.
Print Method
Enter a code that identifies whether the PDBA is to be printed on the paystub or whether it is to be printed on a payment that is separate from other PDBAs.
Values for pay types and payroll taxes include:
Y: Print on paystub (default).
S: Print separate payment (one item per payment).
C: Print separate payment (C types combined).
N: Do not print on paystub.
Values for DBAs include:
Y: Print as total deductions (default).
S: Print separate payment (one item per payment).
C: Print separate payment (include detail).
N: Do not print on paystub.
I: Print individual DBA codes.
T: Print by DBA print group.
The separate payment feature is not available for any payroll taxes being withheld from the employee's payment.
Source of Calculation
Enter a user-defined code (07/DB) that specifies the basis of a deduction, benefit, or accrual. When the system calculates the gross amount for disposable net wages, it does not use the basis of calculation. The gross amount includes all earnings that have a positive effect on the gross and net payment. For wage attachments use one of these codes:
1-8 Garnishment, tax levy, wage assignment (child support and maintenance).
R: Loan, interest
0: Fees
Method of Calculation
Enter a user-defined code (07/DM) that specifies the method that the system uses to perform certain calculations. For example, the system uses a method of calculation to calculate deductions, benefits, and accruals (DBAs) and workers' compensation insurance.
The method values are pre set. If you use methods 0 - 6, 8,9, or G, you must also enter a value in the Table Code field.
For wage attachments use one of these methods:
C: Wage assignment (child support and maintenance).
G: Garnishment.
K: Loan.
L: Tax levy.
A: Fees
%: Interest
Pay Period of the Month:
Enter a code designating the pay period in which the system calculates the DBA/auto deposit. Valid codes are:
Blank: Continue to look for a code at the lower level. The system searches for DBA/auto deposit rules first at the employee level, then at the group level, and finally at the DBA master level. If the field is blank at all levels, the system does not calculate the DBA/auto deposit in that period.
Y: Take the DBA/auto deposit during the current period.
N: Do not take the DBA/auto deposit during the current period.
*: Take the DBA/auto deposit only during the first pay period of each month that the employee works based on the ending date of this month's pay period.
M: Applies only to benefits based on gross hours or dollars. An M in the fifth field only tells the system to calculate the benefit during the special timecard post. An M implies a Yes for a weekly withholding frequency.
Effect on GL (effect on general ledger)
Enter a code that indicates whether you want journal entries passed from payroll to the general ledger and the method you want to use. Values are:
N: Pass dollars only to the general ledger.
M: Do not pass dollars or hours to the general ledger. This code enables an accrual to be tracked in employee payroll history and the dollars to be omitted from the general ledger.
Generate A/P Voucher (generate accounts payable voucher)
Enter a code that determines whether the system should generate a voucher for the DBA, tax, or wage attachment during the final update phase of the payroll processing cycle. Values are:
N: No, do not generate a voucher.
Y: Yes, generate a voucher.
Payee
Enter the address book number of the investment program.
Order To Adjust Ded (order to adjust deductions)
Enter the order in which deductions should be adjusted. If an employee's gross pay does not cover deductions, a code in this field tells the system in what order it should satisfy deductions. Valid codes are 0001 through 9999. The system starts with the highest code. For example, 9999 is deducted before 0001.
When To Adjust Ded (when to adjust deductions)
Enter a code that specifies when the system adjusts, or backs an amount out of, deductions. Values are:
0: Adjust deductions marked with 0 before payroll taxes.
1: Adjust deductions marked with 0, then adjust those marked with 1 before payroll taxes.
2: Adjust payroll taxes before the deductions marked with 2. (This value is for future use.)
Calculate for all Emp (calculate for all employees)
Enter a code that specifies whether the DBA is required. Values are:
Y: The DBA is required.
N: The DBA is not required.
For advance deductions, this field should be set to N (No). When you enter Y (Yes), the system automatically processes the DBA for all qualifying employees. When this field is set to Y, you reduce the information that you must maintain for DBAs that you set up for plans or employees. Information is reduced because you do not need to define the DBA at any level other than the DBA setup level. To define qualifying employees, complete these fields on the Advanced DBA Information form:
Employee Pay Class - (SALY)
Tax Area - (TARA)
Home Company - (HMCO)
When you leave any of these fields blank, the system includes all employees.
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Note: The system also uses Tax Area (TARA) and Home Company (HMCO) fields as screening criteria for DBAs that are not required. If either of these two fields contains a value, and the Calculate for All Employees option is selected, the system uses the tax areas and home companies to qualify employees for the DBA. |
Tax Area (Work)
Enter a code that identifies a geographical location and the tax authorities for an employee work site, including employee and employer statutory requirements. In the Vertex payroll tax calculation software, the tax area code is synonymous with GeoCode. To determine the valid codes for the location, refer to the documentation for the tax calculation software that you are using.
This section provides an overview of the Washington Workers Comp Quarterly Report, lists a prerequisite, and discusses how to:
Run the Washington Workers Comp Quarterly report (R073648).
Set processing options for the Washington Workers Comp Quarterly report (R073648).
After you set up risk classification information and the deduction to calculate Industrial Insurance premiums, you can enter timecards for employees and process those timecards through a payroll cycle. For Industrial Insurance to calculate, each timecard must include a Workers' Compensation Code.
During pre-payroll, the system uses the Industrial Insurance deduction, along with the Workers Comp codes from the employees' timecards, to calculate employee-paid portions of the premium. The employer-paid portion of the premium is calculated during the journal entries step of the payroll cycle.
For each timecard that is processed, the system creates a record in the Employee Paid Workers Compensation Transactions table (F0728) to store the employee-paid portion of the premium, if necessary. These records remain in table F0728 after the final update step of the payroll cycle is completed.
The system also updates existing records in the Employee Transaction Detail table (F06116) during the journal entries step of the payroll cycle to store the employer-paid portion of the premium. These records are stored in the Employee Transaction History table (F0618) after the final update step of the payroll cycle is complete.
The system then uses the information in tables F0728 and the F0618 to produce the Washington Workers Compensation Quarterly Report (R073648). This report includes all of the information that is needed to satisfy reporting requirements for Industrial Insurance information in the state of Washington.
Before you complete the tasks in this section:
Enter or automatically generate employee timecards, ensuring that each timecard for employees who worked in Washington includes a valid risk classification code.
Process employee timecards through a complete payroll cycle.
Select Government Reporting (G05BG), Washington Quarterly Workers Comp.
Processing options enable you to specify the default processing for programs and reports.
Use these processing options to specify the time period for which you want to process the report.
Specify the quarter for which earnings and taxes are accumulated for governmental reporting. Each calendar year has four quarters. Values are:
1: 1st quarter (January through March).
2: 2nd quarter (April through June).
3: 3rd quarter (July through September).
4: 4th quarter (October through December).
Specify the two-digit year for which you want to produce the report. For example, if you want to produce the report for 2003, enter 03 in this processing option.