The COVID-19 pandemic has caused many businesses to adjust or reduce their operations. Some have employees who have been furloughed, yet continue to be paid. All states require that businesses keep separate payroll records for furloughed employees due to the COVID-19 pandemic for the time they continue to be paid and are not working. Furloughed payroll will have a reduced or zero rate when used in the calculation of Workers’ Compensation premium, depending on state Workers’ Compensation rules.
Massachusetts has added an additional requirement for payments to furloughed employees within the state of Massachusetts. Massachusetts requires that employers notify their Workers’ Compensation carrier and provide a list of all paid furloughed employees within the later of September 15, 2020 or 25 days after the employer begins making payments to paid furloughed workers.
That list shall also include:
- The employee’s normal workers’ compensation classification,
- Weekly wage,
- Furloughed date, and
- Anticipated date of return to work.
“’Paid furloughed employees’ means employees who continue to receive payments during a temporary layoff or an involuntary leave and are not performing any work duties for an employer.” If an employee is requested to perform any duties for an employer, the employee is not deemed a paid furloughed employee for any period of time they are performing duties for the employer.
Payroll for furloughed employees in Massachusetts will be assigned to Code 0012, which has no rate or premium associated with it.
If separate, accurate, and verifiable entries within the employer’s payroll records are not maintained, payroll will be assigned to the classification for work normally performed by the employee prior to the COVID-19 pandemic.
All payroll and classifications will be verified at final audit. However, the Division of Insurance is requiring that the carriers provide this initial data for paid furloughed employees now. This rule is effective retroactively to March 1, 2020, the date the COVID-19 outbreak was declared a national emergency, and will expire December 31, 2020, which may be amended if warranted.
Additional information can be found at:
COVID-19 FAQs. (https://www.wcribma.org/mass/HelpfulInformation/FAQ.aspx#COVID-19FAQs)
Please let us know if you have any questions.
DeSanctis Insurance Agency, Inc.