Claims and leave pay
During an employee’s leave, pay may come from a variety of sources. Depending on their location, leave type, and tenure this may include pay from their employer, Private Disability, State Disability, and State Paid Family Leave programs. These sources work together to ensure an employee receives full pay during their leave–meaning only a portion of their leave pay may come from their employer directly. Cocoon’s software automatically identifies any claims an employee is eligible for and guides them from the submission process. Any applicable claims must be submitted in order for employees to receive full pay during leave. Coordinating across multiple income sources can be confusing, which is why Cocoon’s software automatically calculates how much each employee should be paid on leave.
Let’s look at an example: Your employee, Mariana Barrios, is taking parental leave in California as a birthing parent. As Mariana plans their leave, they will see that based on their eligibility determination they are eligible for a number of benefits through: your company’s Private Disability provider, California Disability, and California Paid Family Leave.
The benefits from these claims offset the total amount of leave pay an employer owes an employee on leave. In this example, if Mariana is owed $6,000 at the end of their leave, the total benefits they will receive is $3,650. This means the employer will pay Mariana $2,350 over the course of their leave. Cocoon’s software will guide Mariana through this submission process. Benefit entities like California EDD and Private Disability will require medical certifications and proof of child birth to approve claims and pay out benefits. This means that Mariana will receive consistent payment from their employer each pay period, but their benefits may take a few weeks to arrive.
Cocoon’s payroll process
Cocoon’s software will automatically estimate the amount of benefit payments that an employee will receive from state or disability programs based on their leave plan. These estimates are calculated from published daily rates and weekly benefit maximums from benefit programs. Employers will receive pay files for employees on leave with these estimates already applied, meaning employers will pay their employees less than usual during leave.
Employee experience
Once claims are submitted, it can take a few weeks for them to be approved and for benefits to pay out. Cocoon’s payroll calculations estimate the benefits an employee will receive throughout their entire leave so even when claims are still being processed, employees will see their employer pay take into account the benefit estimations from the beginning of their leave. Employees can view their payments breakdown in their dashboard from their Pay Tracker.
Let’s look at an example: Your employee Mariana is about 3 weeks into their leave and they submitted all of their claims paperwork, but they are still waiting for benefits to arrive. Mariana’s first pay period doesn’t dip because they were working for part of the pay period before going out on leave and disability benefits have a 7-day waiting period, meaning the first week of a leave with a disability component is always fully covered by the employer. After the first pay period, Mariana sees that pay from their employer drops. When they click on the pay period, they see that we’re estimating they will receive $2,571.43 in benefits for this two week period, but it won’t show up until their claims are approved.
Employer experience
When you have employees on leave, you’ll receive pay files from Cocoon in your Documents tab. Cocoon’s software calculates employee leave pay, but your company is responsible for running payroll.
Pay files across pay systems differ slightly. Before you process your first pay file from Cocoon, make sure you learn how to read the pay file for your company’s system here.
Questions? Please reach out to the Support team at: