Employee Remuneration

What is included (and excluded) from the workers' compensation definition of employee remuneration?

REMUNERATION MEANS MONEY OR SUBSTITUTES FOR MONEY.

Remuneration includes:
A.	Wages or salaries including retroactive wages or salaries;
B.	Commissions;
C.	Bonuses including stock bonus plans;
D.	Extra pay for overtime work, except as provided in Overtime section below;
E.	Pay for holidays, vacations or periods of sickness;
F.	Payment by an employer of amounts otherwise required by law to be paid by employees to statutory insurance or pension plans, such as the Federal Social Security Act (employer’s contribution not to be deducted from employee’s gross wages). Cross-reference "B" below;
G.	Payments to employees on any basis other than time worked, such as piecework, profit sharing or incentive plans;
H.	Payment or allowance for hand tools or power tools provided by employees and used in their work or operations for the insured;
I.	The rental value of an apartment or a house provided for an employee based on comparable accommodations;
J.	The value of lodging, other than an apartment or house, received by employees as part of their pay, to the extent shown in the insured's records;
K.	The value of store certificates, merchandise, credits or any other substitute for money received by employees as part of their pay. (Except as provided in Exclusions section below);
L.	The value of meals received by employees as part of their pay to the extent shown in the insured’s records;
M.	Payments for salary reduction, retirement, or cafeteria plans (IRC 125) that are made through deductions from employee’s gross pay;
N.	Davis-Bacon wages paid to employees;
O.	Annuity plans;
P.	Expense Reimbursements to employees to the extent that an employer’s records do not substantiate that the expense was incurred as a valid business expense;
Q.	Payment for filming of commercials excluding subsequent residuals that are earned by the commercial’s participant(s) each time the commercial appears in print or is broadcast.
Remunerations Exludes:
A.	Tips and other gratuities received by employees;
B.	Payments by an employer to group insurance or group pension plans for employees, other than payments covered by "F" above;
C.	The value of special rewards for individual invention or discovery;
D.	Dismissal or severance payments, except for time worked or accrued vacation.
E.	Payment for active military duty;
F.	Employee discounts on goods purchased from the employee’s employer;
G.	Expense reimbursements to employees to the extent than an employer’s records substantiate that the expense was incurred as a valid business expense Note: Reimbursed expenses and flat expense allowances, except for hand or power tools, paid to employees may be excluded from the audit, provided that all three of the following conditions are met: The reimbursed expenses or expenses for which allowances were paid were incurred upon the business of the employer, and; The amount of each employee’s expense payments or allowances is shown separately in the records of the employer, and; The amount of each expense reimbursement or allowance payment approximates the actual expenses incurred by the employee in the conduct of his or her work;
H.	Supper money for late work;
I.	Work uniform allowances;
J.	Sick pay paid to an employee by a third party such as an insured’s group insurance carrier that is paying disability income benefits to a disabled employee;
K.	Employer-provided perquisites (perks) such as: Use of an automobile; An airplane flight; An incentive vacation (e.g., contest winner); A discount on property; Club memberships; Tickets to entertainment events.

OVERTIME

Overtime means those hours worked for which there is an increase in the rate of pay;

For work in any day or in any week in excess of the number of hours normally worked, or;

For hours worked in excess of 8 hours in any day or 40 hours in any week, or;

For work on Saturday, Sunday or holidays. In the case of guaranteed wage agreements, overtime means only those hours worked in excess of the number specified in such agreement.

Note: Forms in incentive pay commonly referred to as "shift differential" or "premium pay" associated with working other than normal day shift hours during the standard workweek are not to be considered as overtime.

In the case of guaranteed wage agreements, overtime means only those hours worked in excess of the number specified in such agreement.

Exclusion of Overtime Payroll means the extra pay for overtime that shall be excluded from the payroll on which premium is computed as indicated in (A) or (B) below, provided the insured's books and records are maintained to show overtime pay separately by employee and in summary by classification.

If the records show separately the extra pay earned for overtime, the entire extra pay shall be excluded.

If the records show the total pay earned or overtime (regular pay plus overtime pay) in one combined amount, 1/3 of this total pay shall be excluded. If double time is paid for overtime and the total pay for such overtime is recorded separately, 1/2 of the total pay for double time shall be excluded.

Example:

A person earning $10 per hour straight time...

Application of Rule A: Entity A records a person working three hours of overtime at time and one-half, where the records indicate a line for straight time pay and a line for overtime pay (extra pay):

	Straight Time Wage	Extra Pay
Wages:	$10.00	$5.00($10/hr X .5)
Hours Worked:	x 3	x 3
Earnings:	$30.00	$15.00

Entity A would include on the Self-Audit Form the $30 under Section 1, Column A, Actual Payroll @ Straight Time. The $15 would not be reported, as this entire amount shall be excluded.

Application of Rule B: Entity B records a person working four hours of overtime at double time, where the records indicate the entire wage earned for overtime:

	Overtime Wage
Wages:	$20.00($10/hr X 2)
Hours Worked:	x 4
Earnings:	$80.00

Entity B would include on the Self-Audit Form the $80 under Section 1, Column C, Payroll @ Double-Time. The Fund will subsequently reduce the overtime to straight time. The appropriate class rate will be applied to straight time wages of $40 ($10/hr. X 4 hours) - not $80 of double-time wages.

Exception to "Exclusion of Overtime Payroll": Exclusion of overtime pay does not apply to payroll assigned to any classification under the caption "Stevedoring" with a code number followed by the letter "F".