WI Worker’s Compensation Furloughed Employee Updates Covid-19
April 1, 2020
WCRB has established a new unit statistical code for reporting certain payroll for this unprecedented event:
Unit Statistical Code 0012 – Paid Furloughed Workers During A Governmental Emergency Order Impacting Employment
Who is considered a furloughed employee for WI worker’s compensation insurance purposes?
By definition, a furloughed employee is one who is still being paid where they have been given a temporary layoff, an involuntary leave or another modification of normal working hours for a specified duration.
Is furloughed time the same as idle time?
No. Furloughed time is the time period where a state-wide emergency order has been issued by a public official and is for an extended period. The employee is not performing work duties for the employer.
Idle time is “down” time when an employee is waiting for materials or products in order to perform their duties. The employee is still under the total direction and control of the employer. In accordance with WI Basic Manual Rule V. H.2., examples of idle time include:
a. Suspension or delay of work on account of weather conditions.
b. Delays while waiting for materials.
c. Delays while waiting for another contractor to complete certain work.
d. Delays arising from breakdown of equipment.
e. “Stand-by” time where employees such as operators of cranes, hoists, or other equipment are on the job but their active services are not required continuously.
f. Special union requirements or agreements between employer and employees calling for pay for idle time under specified circumstances.
g. Time spent traveling to or from the job.
h. Other causes of similar nature.
If a furloughed employee continues to be paid by their employer, is their payroll excluded from the employer’s worker’s compensation insurance premium?
If an employer continues to pay employees their normal wage and the employee does not file for state unemployment compensation, the employer must keep separate records of the payroll. If accurate, verifiable payroll records are kept, the payroll paid to the furloughed employee will NOT be included for basis of premium.
How is the payroll to be split when an employee works part of a day and is furloughed part of the day?
For example, if an employee works 4 hours a day and is furloughed 4 hours a day does 50% of the payroll go into the governing code and 50% of the payroll in code 0012? Is there point when an employee works over a certain percentage of time a day and is furloughed the rest does 100% of the payroll go into the governing code?
First determine if the time is furloughed or idle time. If the employee is performing normal work duties for any portion of the day, no division of payroll is acceptable.
What if an employer does not have documentation on the work that is furloughed versus the work that is actually being done?
If accurate, verifiable payroll records are not maintained, 100% of the wages are assigned to the employee’s normal classification. WI Basic Manual Rule IV E.2.b.2. states: “Estimated or percentage allocation of payroll is not permitted”
Can a furloughed employee file a worker’s compensation insurance claim?
If an employee who is receiving paid wages performs a task at the direction of his employer, the wages would be included in the premium base. This would be true whether or not the payroll is characterized as furlough pay. Any claim for injury made by a furloughed employee would have to identify the work related task they were performing. The payroll would then be included based on the carrier’s determination that the injured worker was actually working
Code 0012 could fraudulently be used by unscrupulous employers to intentionally lower WC premiums.
Code 0012 can ONLY be used if an emergency order is issued by a governmental official. Code 0012 is defined as: Paid Furloughed Workers During A Governmental Emergency Order Impacting Employment. If a governmental emergency order is not in effect, code 0012 cannot be used.
Is a $0.00 rate appropriate for code 0012?
Yes. The problem with including a rate charge for payroll continuation for employees who are not working is the absence of the risk of a compensable injury. The WCRB believes there is no justification for charging premium based on payroll that creates no risk of payment of benefits.
Is there an end date to when code 0012 can be used?
Statistical code 0012 will be a permanent reporting code and will be implemented whenever an emergency order is issued.
Is the term Governmental Emergency Order defined?
Governmental Order means any order, decree, stipulation, or determination, promulgated or entered by any public official or governmental body representing the state or federal government.
Is the term public official defined?
Public Official means someone who has authority to exercise the power of the government and does so as an agent and employee of the government.
Should there be a waiting period before code 0012 can be used?
The use of statistical code 0012 is directly linked to an executive order made by a public official with the authority to do so. In the case of COVID-19, it’s Governor Ever’s Executive Order #72. Executive Order #72 is effective from March 17, 2020 through April 24, 2020 unless otherwise declared.
Note: This content is from the Wisconsin Compensation Rating Bureau and may change as additional questions and issues arise. You can find the most updated info here: www.wcrb.org/misc/WCRBCovid19.pdf