Easily Maintain Workers’ Compensation Classification Data for the US

  • by Dawn Burns, QA Manager, Howrey LLP
  • Brad Walters, Sr. Consultant
  • May 15, 2006
In this overview of US-based workers’ compensation, learn about the general functionality that SAP provides to keep your company in compliance. See how to set up the premium deductions and the workers’ compensation codes in Organizational Management.
Key Concept
The US federal or state Occupational Safety and Health Act agency provides a listing of workers’ compensation codes. These codes help determine the amount of the premium that companies pay to a third party. Companies that are self insured also need to report these codes to the federal or state government. An example of a workers’ compensation code is 8810, a generic clerical code that you can assign to individuals who work in information technology departments. By contrast, people who work as warehousers have a different code (8032) that denotes a higher likelihood of work-related injuries.

United States law requires employers to provide workers’ compensation benefits to employees. SAP provides some basic functionality that allows employers to calculate the workers’ compensation premiums. Since this information isn’t formally included in an SAP course, many employers are not aware of how easy it is to configure. Many times, employers pay a third-party vendor to calculate this information, which adds to their overall operational costs. We will show you how easy it is to set this information up and potentially save your company some money.

Regardless of how your company funds the workers’ compensation program, Organizational Management (OM) in SAP R/3 and mySAP ERP Central Component (ECC) store this information in the same way. When you create a position within your company, you need to think about several factors. Consider the job’s salary and what organization the worker reports to. Determine what job to assign to this position. You also need to consider what workers’ compensation code to associate to that position.

You can assign workers’ compensation codes to either an organizational unit or a position. If you assign the workers’ compensation code to an organizational unit, then everyone within that organizational unit receives that workers’ compensation code unless you assign a different workers’ compensation code directly to a position. Workers’ compensation codes for a particular position always supersede workers’ compensation codes for an organizational unit.

Dawn Burns

Dawn Burns is an SAP-certified human resources senior consultant and Quality Assurance Manager and HR Consultant with Howrey LLP. She is a former SAP Human Resources instructor for SAP America and has more than 12 years of experience in human resources and information technology.

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Brad Walters

Brad Walters is a certified SAP HR consultant for Electronic Data Systems with more than nine years of SAP HR experience. His SAP work experience includes configuration and production support of PA/OM, Recruitment, Payroll, and ABAP development.

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