Overview:
Workers Compensation (WC) is a type of insurance coverage provided for employees who may get injured while at work. Employees who are covered under Workers Comp by their employers relinquish their right to sue the employer for negligence. Employers enter into an agreement with Insurance companies (also called WC Insurance carriers). Jobs that exist within an organization are categorized based on the hazards associated with the job and each job is given a WC Code and a rate.
Generally jobs with similar profiles are grouped together under a common WC Code. A given job does not necessarily have the same classification and code from state to state. However, within a state, the same code normally covers a number of different jobs judged to have a similar risk level, so in each state all your jobs may fall into a fairly small number of codes.
Many states provide WC Coverage through state run funds, but in certain states, the government permits employers to use private WC insurance carriers. All such carriers will use the same WC Code. However each carrier may quote a different rate for the job. Also, the rate quoted by the insurance carrier for the same Job may vary between different locations within the same state.
Workers Comp Override:
In certain situations, it may be necessary to override an employee’s WC Code from the default value associated with the employee’s job. Example, if a field engineer working in Kansas is deputed for a certain temporary period to Alaska, the WC might have to be overridden with a new value assuming that the risk level at Alaska is different from that of Kansas.
Workers comp regulations exist in several countries and are called by different names such as Compo in Australia, INSS (Instituto Nacional do Seguro Social) in Brazil etc.
To setup a WC Codes and Rates, follow the sequence shown here:
· All your WC carriers in this state must be set up as external organizations with the classification Workers Compensation Carrier. For states that do not have private carriers, there will be only one carrier.
· If there are carriers whose rates differ for particular work locations, those locations must be entered in the system.
Workers Compensation (WC) is a type of insurance coverage provided for employees who may get injured while at work. Employees who are covered under Workers Comp by their employers relinquish their right to sue the employer for negligence. Employers enter into an agreement with Insurance companies (also called WC Insurance carriers). Jobs that exist within an organization are categorized based on the hazards associated with the job and each job is given a WC Code and a rate.
Generally jobs with similar profiles are grouped together under a common WC Code. A given job does not necessarily have the same classification and code from state to state. However, within a state, the same code normally covers a number of different jobs judged to have a similar risk level, so in each state all your jobs may fall into a fairly small number of codes.
Many states provide WC Coverage through state run funds, but in certain states, the government permits employers to use private WC insurance carriers. All such carriers will use the same WC Code. However each carrier may quote a different rate for the job. Also, the rate quoted by the insurance carrier for the same Job may vary between different locations within the same state.
Workers Comp Override:
In certain situations, it may be necessary to override an employee’s WC Code from the default value associated with the employee’s job. Example, if a field engineer working in Kansas is deputed for a certain temporary period to Alaska, the WC might have to be overridden with a new value assuming that the risk level at Alaska is different from that of Kansas.
Workers comp regulations exist in several countries and are called by different names such as Compo in Australia, INSS (Instituto Nacional do Seguro Social) in Brazil etc.
To setup a WC Codes and Rates, follow the sequence shown here:
· All your WC carriers in this state must be set up as external organizations with the classification Workers Compensation Carrier. For states that do not have private carriers, there will be only one carrier.
· If there are carriers whose rates differ for particular work locations, those locations must be entered in the system.
To enter WC work classification codes and rates:
1. Query the state and carrier for which you are entering codes and rates. To enter rates for a particular location, also query the location. If you leave the Location field blank, the rates you enter are the default rates for this carrier and state.
2. Enter each code and its associated rate in the Code and Rate fields. When finished, save your work.
1. Query the state and carrier for which you are entering codes and rates. To enter rates for a particular location, also query the location. If you leave the Location field blank, the rates you enter are the default rates for this carrier and state.
2. Enter each code and its associated rate in the Code and Rate fields. When finished, save your work.
Select the Carrier and the state. If there are multiple locations in the state which have different WC rates, then the same should be recorded separately.
Enter the various codes and enter the employer rates and employee rates (if applicable). There are certain situations where the employees also contribute to the WC fund and the rate or amount entered here will be picked up by Payroll for processing.
Enter the various codes and enter the employer rates and employee rates (if applicable). There are certain situations where the employees also contribute to the WC fund and the rate or amount entered here will be picked up by Payroll for processing.
Calculation Methods: Oracle supports three types of calculation methods:
1. Percent of Subject Earnings
2. Hourly Rate
3. Flat Amount Per Period
Percentage of Subject Earnings: Here the deductions are based on the amount that the employee earns and is a flat amount. Also the period should be chosen. Example: If the period is selected as ‘Year’ and if $7.50 per year is specified, then $7.50 will be deducted from the next pay period and then again in the first pay period of the following year.
Hourly Rate: Here the Period field is not relevant. Example: If the employer and employee rates are in units of dollars per hour, say 1.50, then the WC rate will be deducted at the rate of $1.5/Hour and the total amount will be calculated based on the total hours worked by the employee. The hours used to calculate the amount deducted are the regular hours worked. Overtime can be included in the calculation.
Flat Amount Per Period:
The WC amounts are specified in units of dollars per specified period, where 10.0000 = $10/Period. For this calculation method a period must be specified. The valid choices for Period are Year, Month, and Quarter. The amount specified will be deducted at the beginning of the period.
For example: If the period is specified as Year, and If 25.00 is specified, then $25 will be deducted from the next pay period and then again in the first pay period of the following year.
Percent of Subject Earnings is the default calculation method if none is chosen
Entering Workers Comp Codes in Oracle Apps:
Use US HRMS Manager (or equivalent) responsibility. Navigate to Work Structures>Jobs>Workers Compensation
Some states impose an Executive Weekly Maximum, which sets an upper limit on the amount of an employee's earnings available for inclusion in his or her payroll exposure. Hence the value entered for Executive Weekly Maximum caps the dollar value for any employee's earnings.
Select the State. If the state allows for overtime to be included in the calculation for the WC fund contribution, then select the overtime categories. In the Codes for Jobs, select the Jobs and enter the corresponding codes.
Entering a WC Override Code
You may be required to enter a WC code for an employee that overrides the default code associated with his or her job. This situation can arise when, for example, workers in a relatively high-risk job classification begin work at a job site, and the risk of injury for any worker at the site is judged to increase.
Enter WC code overrides in the window GREs and Other Data.
Prerequisites
• The employee's assignment must include a work location and a job with a WC code.
• The employee's assignment must have a SUI state and a GRE on record. There must be a WC insurance carrier entered for the GRE. An association of the WC codes for the SUI state with the default rates of the GRE's WC carrier must be in place.
To enter a WC override code:
In the WC Override Code field, select the override code.
Note: If no list of codes is available, check that all the prerequisites for override code selection are in place.
Entering a WC Override Code
You may be required to enter a WC code for an employee that overrides the default code associated with his or her job. This situation can arise when, for example, workers in a relatively high-risk job classification begin work at a job site, and the risk of injury for any worker at the site is judged to increase.
Enter WC code overrides in the window GREs and Other Data.
Prerequisites
• The employee's assignment must include a work location and a job with a WC code.
• The employee's assignment must have a SUI state and a GRE on record. There must be a WC insurance carrier entered for the GRE. An association of the WC codes for the SUI state with the default rates of the GRE's WC carrier must be in place.
To enter a WC override code:
In the WC Override Code field, select the override code.
Note: If no list of codes is available, check that all the prerequisites for override code selection are in place.
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