To explain the processing of gross, Social Security, and Medicare wage adjustments when the State Insurance Fund (SIF) notifies OSC of Workers’ Compensation awards that are credited to New York State as reimbursement for wages paid to employees by the State in the current year.

To explain the processing of current year Social Security and Medicare refunds resulting from adjustments made to employees’ Social Security and Medicare wages.

The employee received no wages from the State for work-related absences because the employee was on a leave of absence without pay

                             OR

The employee received wages from the State for work-related absences, but the wages received were less than the amount of the statutory benefit (e.g. employee was on sick leave with pay). In this instance, the WCB would direct SIF to pay the employee directly for the difference between the wages the employee received from the State and the amount of the statutory benefit. [Note: In this case, SIF would also credit the State for the amount of the wages actually paid to the employee by the State.]

Credit the State with reimbursement for wages paid when:

The employee received wages from the State during work-related absences. The wages were received because the employee charged leave credits, was on sick leave with pay, or was covered under a program, such as the Security Units’ Medical Evaluation Program, which grants an employee Workers’ Compensation leave with pay without charge to leave credits.

The Workers’ Compensation statutory benefit (maximum of $400 weekly) is not subject to federal, State, local, or Social Security and Medicare taxes. When a Workers’ Compensation award is made for a disability period that occurred in the current calendar year and the employee was paid by the State for all or part of that disability period, OSC will reduce the employee’s year-to-date taxable gross, Social Security, and Medicare wages for the current calendar year by the amount of the Workers’ Compensation award credited to the State. The employee’s W-2 form will reflect this reduction in wages.

Following completion of the wage adjustment procedures noted above, OSC will :

Automatically refund the Social Security and Medicare taxes to the employee, in a separate check or advice, based on the amount of the WCE wage adjustment.

Provide the agencies with a list of employees who received Social Security and Medicare refunds. This list will contain all of the information necessary to complete the attached sample communication to employees.

Note: Although the employee’s taxable year-to-date gross wage will be reduced, refunds of federal, State, and local income taxes will not be processed by OSC. Affected employees’ taxable wages will be reduced on their W-2, resulting in a reduction in their tax liability as determined on the Federal and State tax returns.