If
your organization has more than a few employees receiving third-party
sick pay, you know the headaches brought on by the third-party payer’s
reports. While options may vary, typically the third-party payer is an insurance
company. They deduct the employee’s portion of FICA
and Medicare from the sick pay check. They are then required
to report details of the checks they write back to you (the
employer). This leaves your company liable for the employer’s
portion of FICA and Medicare as well as unemployment taxes
– and the timely payment of those taxes.
Until you do
something, your state and federal quarterly reports, your
employee’s W-2, and your general ledger, aren’t
aware that anything has happened. And until the necessary
adjustments are made, they’ll all be wrong. The reports
you receive from the third party are just numbers on paper
– they don’t magically update anything – and
manual maintenance of the affected data is troublesome and
prone to error.
OPEN4’s
TPS (Third Party Sick) module includes an entry procedure
that accepts all of the information reported back to you by
the third party. The check data may be entered with as much
detail as the report contains – or entered as a single
line summarizing all checks for an employee for that period.
Working from
the TPS report, you enter the data for each sick pay check.
The system creates an employee record and upon completion,
it prints a TPS register. The register shows the detail for
each check, as well as totals of all entries.
Your employee’s
Sick Pay category maintains a complete history of checks paid
to him/her by the third party and is the source for adjustments
to quarterly reports and W-2’s.
And if you
believe that STD (Short Term Disability) usage is on the
rise at your organization, you’re probably right. A recent
survey by Mercer Human Resource Consulting indicates that
32% of the respondents report an increase in short-term disability
incidence rates over the past two years. Be ready –
automate with OPEN4’s TPS module.
