The League of Minnesota Cities Insurance Trust (Trust) has adapted new guidelines for payroll auditing, which follow decisions made by the Minnesota Workers’ Compensation Insurers Association (MWCIA) and the Workers’ Compensation Reinsurance Association (WCRA).
For members of the Trust’s workers’ compensation program, the payroll allocated to paid furloughed employees during the COVID-19 pandemic will be excluded on the payroll audit for all new, renewal and outstanding policies, effective on or after March 1, 2020.
Who is considered a paid furloughed employee?
- Employees who continue receiving payments during a temporary layoff or an involuntary leave and are not performing any work duties for an employer are furloughed employees.
- On-call employees or employees doing any other type of work are not furloughed employees.
What is considered furlough pay?
- Payments made to paid furloughed employees issued due to the COVID-19 pandemic which impact an employer’s staffing or business operation is considered furlough pay.
- Idle time is not considered furlough pay (equipment breakdown, weather delays, waiting for material, etc.).
- Hazard pay (increased wages for people working during the pandemic) is not considered furlough pay.
- Expense reimbursement, overtime, vacation/sick time is not considered furlough pay.
How should I track furloughed payroll?
- Classification Code 0012-Paid Furloughed Employees may be used to report payments with zero rate and zero premium.
- Furloughed pay can be assigned in the General Ledger account.
- Furloughed pay should be removed from the regular pay class code.
Furloughed payments will be excluded from premium and experience rating if the employer keeps separate, accurate, and verifiable records.
Please direct any questions to your Trust payroll auditor. If you’re unsure who that is, contact your underwriter at (651) 281-1200 or (800) 925-1122 for more information.