Our business operates in Tasmania and we have been advised that under State Workers Compensation Legislation we have to continue to make payment to a worker if we have terminated their employment whilst they are on workers compensation. We do not understand how there is a need for us to continue to have to pay the worekrs entitlements if they are not part of our weekly payroll if they have been terminated. I have spoken with WorkSafe TAS who confirmed we do have to pass the payment on to the worker on behalf of the insurer, however I need to clarify that if we are doing that it is not considered a wage. I have no way of processing a wage to an employee who would have been terminated in our payroll system, nor having responsbility for any of their other work entitlements.
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Hiya @delpclem 👋
That is a very typical arrangement in payroll for workers' compensation. There are a number of factors you need to consider:
- Check with your payroll provider to see if this compliant requirement is addressed in their product and how.
- Check the Award or Agreement to consider if the employer has obligations to pay additional superannuation contributions for "all paid leave" and any constraints.
- You have reporting obligations to correctly report their cessation date, cessation reason and to classify the post-termination payments as Paid Leave type-W (workers' compensation). This is critical for Services Australia's obligations if your employee is their customer.
- How you reflect the terminated worker to differentiate them from active/terminated workers. My customers (of a Tier 1 payroll product) have a classification that is "Post-term WC", they do so much of it. They also classify them as inactive, thus they are removed from all of their standard workforce reporting, but is still visible and available. Some of our customers have >500 of these post-term WC workers on their payroll for 5 years!
Payroll ain't easy 🫣
Deanne