DRS Email 17-007, Employer Reporting Related to Workers’ Compensation/Temporary Duty Disability

Notice No.: 17-007 
Date: March 28, 2017
Applies to: All Employers Except WSPRS
Subject: Employer Reporting Related to Workers’ Compensation/Temporary Duty Disability

Workers’ compensation, also known as temporary duty disability (TDD), can be a complex payroll issue. This notice provides information on reporting data to DRS for members in TDD status.

Some employers may allow employees to:

  • use accrued leave while waiting for workers’ compensation/TDD determinations
  • use accrued leave to supplement their workers’ compensation/TDD payments
  • use their worker’s compensation/TDD payments to restore leave balances through a buy-back program
  • use shared leave while on TDD
  • be made whole without using accrued leave

There are two methods for reporting data to DRS for members in TDD status.

Method 1 – Employer reports the regular compensation the employee would have earned if not on TDD.

Steps to complete:

  1. Employers should enter into a written agreement with the employee regarding the obligation to repay the member contributions to the employer.
  2. Employers must report the regular compensation the employee would have earned. This must be reported on the current transmittal and cannot be reported retroactively.

Note: Buy back/restoration of accrued leave remains an internal accounting function and does not affect retirement reporting.

Method 2 – Employer reports the leave used, and makes adjustments to reverse leave restored and allows employee to contact DRS directly to purchase service, creating an invoice of contributions and interest for the employer and compounded monthly until the employee purchases their share of the service credit.

Steps to complete:

  1. Employer reports leave used to DRS, if reportable compensation (shared leave is not reportable for some plans).
  2. Employee turns in worker’s compensation check to employer to restore (buy back) some or all leave used.
  3. Employer credits the employee’s leave balance based on the amount of hours of leave the workers’ compensation check will restore.
  4. Employer uses the retirement transmittal to back out the restored leave previously reported to DRS in Step 1.
  5. Employee applies directly to DRS to purchase service credit for each period of absence due to TDD status.
  6. Employee will receive an Optional Bill for the member contributions from DRS.
  7. Employers will receive an invoice for employer contributions only if and when the employee pays the optional bill amount. Payments are subject to interest (currently 7.8%) compounded monthly from the time of the disability.

Relevant statutes:

Prior notices:

If you have any questions regarding this DRS Notice, please contact Employer Support Services at 360-664-7200, option 2, or 1-800-547-6657, option 6, option 2; or email us.