This article covers different workers comp scenarios based on Pay Cat's standard pay categories
Pay Cat have a standard set of workers comp pay categories that comply with the ATOs requirements. Note for some awards, like the SCHADS Award, the workers comp superannuation treatment is different. Therefore we have included the standard workers comp pay categories in the template and encourage you to use these.
In our examples below, we will assume you're using the Pay Cat SCHADS Award Template.
1. Employee settings
When you move your employee to a workers comp arrangement, you will want to do the following:
- Tag the employee with Workers comp - when work is performed - first 52 weeks. NB: there's a separate tag to apply if the employee has gone over 52 weeks under this arrangement. Note if the employee is not working while receiving workers comp payments, do not select either of these tags.
- Select a leave allowance template depending on whether the employee is permanent or casual and what state they’re in. Note again here that South Australia has a unique leave template depending on whether the employee has had workers comp for more than or less than 52 weeks.
- Ensure the employee has the standard hours per week completed, even if they are a casual employee.
Different states restrict whether annual or personal / carers leave and LSL can be taken, and if they continue to accrue. Therefore it’s important to apply the right leave template to ensure your employee is getting the right setting.
2. Timesheets - when an employee is working while they are receiving workers comp payments
If an employee works they should submit a timesheet for their worked time as normal. These shifts will be paid as normal based on the Award interpretation.
With the tag selected in step 1, the employee will get an additional earnings line of Workers comp - when work is performed or Workers comp - when work is performed - no super.
The hours paid will be the difference between the timesheets submitted and the employee's standard hours. The rate, however, will intentionally be $0 per hour and will generate a pay run warnings. See 'working out PIAWE' below for more information on how to calculate this rate.
3. Leave requests - when an employee is not working while receiving workers comp payments
If an employee is not working, they need to submit a leave request over the period of their workers' comp payments. If the employee normally submits a timesheet, it is best practice to still convert these leave requests into timesheets. This ensures that any rules are still able to be applied. There are two leave categories to use: Workers comp leave or Workers comp leave - after 52 weeks.
This will apply for paid leave in a pay run equivalent to the employee's standard hours. However, the employee will intentionally be $0 per hour, generating a pay run warning. See 'working out PIAWE' below for more information on how to calculate this rate.
The pay category used in the pay run will be either Workers Comp - no work is performed or Workers Comp - no work is performed - no super.
4. Working out PIAWE and setting a rate
When a worker has a work-related injury and they’re unable to perform their full pre-injury duties, they may be paid a percentage of their pre-injury average weekly earnings (known as PIAWE). The percentage is different from state to state and generally decreases the longer the employee is on Workers Comp. Your insurer will work with you to determine an employee's PIAWE.
Once you know the amount, this is what gross earnings should be in the pay run. You should use this desired total to work out the unknown rate. See the example below:
Jane is receiving workers comp at 90% of PIAWE. The PIAWE is $1,200 per week. Jane is continuing to perform work at 10 hours per week. Jane’s contracted hours from which PIAWE was calculated are 30 hours per week.
Before any adjustment, we run a pay run and have a 'Workers Comp - When Work Is performed' which has automatically calculated 20 hours and $0 per hour. For the timesheets Janue submitted, she has earned a total of $350.
To work out Jane's missing rate, we would use this equation:
(PIAWE x percentage - Amount earned from timesheets) / workers comp hours
So, in this case, we would have ($1,200 x 90%) - 350 = $730
$730 / 20 hours = $36.50
We would manually enter $36.50 and check that Jane's gross earnings are now $1,080 ($1,200 x 90%)
5. Topping up to 100% of PIAWE
Some employers will continue to pay 100% of PIAWE at their discretion. This is above the statutory requirement, so it is a form of overpayment. There are separate pay categories for recording this, depending on whether they are still working or not.
In the example above, I would add an additional earning of Workers comp - top up - when work is performed. I would add a unit of 1 and a rate of $120 (the difference between 90% and 100% of PIAWE.
If the employee were on leave instead, I would use Workers Comp - top up - no work is performed.
Finally, if this arrangement extended beyond 52 weeks, we would instead use Workers comp - top up - when work is performed - no super or Workers Comp - top up - no work is performed - no super.