Configure Workers' Comp Legal Entity Policies and Rates

This section describes how to define the workers' compensation account information and rates for each legal entity. This defines what states or provinces the legal entity operates in, the workers' compensation account or policy numbers, and a rate for each classification code which determines the amount of premiums employees pay.

Before You Begin: This configuration requires that the appropriate legal entities have already been set up in Dayforce. For more information about setting up legal entities, see Org Payroll Setup > Legal Entity.

In the United States, the workers' compensation rate can apply to the employer or the employee. Usually, if an employee pays workers' compensation premiums then the employer pays a matching amount.

In Canada, workers' compensation premiums are paid for by employers on behalf of employees.

Workers' compensation rates are specified as a percentage amount, such as 1.25%, that the application multiplies an employee's earnings by to determine the amount of the workers' compensation premium.

To define legal entity workers' compensation policies:

1. Go to Org Setup > Org Payroll Setup > Legal Entity.
2. The application displays the legal entities already configured in the application.
2. Select a legal entity.
3. Select the Workers Comp tab.
4. Click Add.
5. In the State / Province drop-down list, select the name of the state or province to which the code belongs.
6. Enter the legal entity's workers' compensation account or policy number in the Account / Policy Number field.
7. Enter a name and description of the policy.
8. In the Start Date field, specify when the policy becomes effective.
9. (Optional) In the End Date field, specify an effective end date when the policy is no longer applicable. By default this field is blank and the policy does not expire.
10. (US only) Select an applicable earning grouping in the Earning Grouping drop-down list.
11. (Canada only) Enter the employer's blended rate in the Blended Rate field, if the company has one.
12. Note: Only some Canadian legal entities will have a blended rate, which is an average rate that represents the average risk associated with working in the legal entity's business. This blended rate is typically lower and overrides any individual default rates specified per code.
12. In the Rates section, click Add.
13. In Workers Comp Class Code drop-down list, select the classification code.
14. Note: The application only displays classification codes that were configured with the same state or province as the legal entity's State or Province.
14. In the Start Date field, specify when the rate becomes effective.
15. (Optional) In the End Date field, specify an effective end date when the rate is no longer applicable.
16. In the Employer Rate field, enter the percentage of an employee's earnings the employer pays into workers' compensation, using the decimal format of the rate’s percentage. For example, if the rate is 14.9% = 0.149, enter the percentage rate as 14.9 in the Employer Rate field.
17. The application multiplies this rate by an employee's earnings to determine the workers' compensation premium the employer pays on their behalf.
17. In the Employee Rate field, do the following:
    • (US only) Enter the percentage of an employee's earnings that the employee pays as a workers' compensation premium, using the decimal format of the rate’s percentage. For example, if the rate is 14.9% = 0.149, enter the percentage rate as 14.9 in the Employer Rate field. The application multiplies this rate by an employee's earnings and deducts the result from the employee's pay as a workers' compensation premium.
    • (Canada only) The application automatically uses the system-configured employer workers' compensation deduction definition.
18. Select the Is Default checkbox to configure the rate as the default for the corresponding classification code.
19. Click Save.