If you received an email about excess employer benefits, it means Cocoon identified that your employer may have paid more leave pay than expected based on your final leave details and/or the benefits you received while on leave.
This can happen because leave pay is often coordinated across multiple sources, such as your employer’s paid leave policy, state benefits, and/or disability insurance benefits. If the amount paid by your employer ends up being higher than it should have been after those other benefits are accounted for, the remaining amount may need to be repaid to your employer.
Why might this happen?
Your leave dates changed after payroll was already processed.
For example, let’s say your original leave plan was for 9 weeks, but you returned to work after 10 weeks. Depending on when your leave dates were updated, your employer may have already processed payroll based on the original 9-week plan. If that caused you to receive more leave pay than you were eligible for, your employer may need to reconcile the difference.
Your leave was submitted or updated after it had already started.
If your leave details were submitted late or changed after payroll had already run, previous payroll may not have included the correct deductions for estimated state or insurance benefits. This can result in your employer payment more than intended during your leave.
Your actual benefits were higher than Cocoon estimated.
Cocoon may estimate expected state or insurance benefits when calculating your leave pay. If you later complete benefit verification and the documentation shows you received more in benefits than estimated, your employer may need to account for those additional benefits so that your total pay is not more than expected.
Benefit verification was completed late in your leave or after your leave ended.
When benefit verification happens earlier in a leave, Cocoon may be able to adjust remaining leave payment. If verification happens late in the leave, or after the leave is over, there may not be enough remaining leave pay to adjust. In that case, the remaining balance may be surfaced as an amount owed to your employer. Your employer will handle the repayment.
Why doesn’t Cocoon deduct this automatically?
Cocoon’s payroll product only adjusts leave pay while you are on leave. Once you have returned to work, your pay is usually regular wages rather than leave pay. Because rules around deducting from regular wages can vary, Cocoon does not automatically reduce regular pay for excess employer benefits. Instead, the balance is surfaced to your employer so they can coordinate next steps directly with you.
What should I do if I see that I owe money to my employer?
Your employer will reach out to you directly to coordinate repayment, if repayment is needed. They can provide details about the repayment process, timing, and any forms or agreements that may be required.
If you believe the amount is incorrect, you may want to review your leave dates, pay tracker, and any state or insurance benefit you received. If you have not already submitted benefit verification, providing documentation of your actual benefit payments may help confirm whether the amount is accurate.
Cocoon cannot provide tax, accounting, or legal advice. There may be circumstances, including recoupment of an overpayment across calendar years, that could have tax implications. Your tax professional can provide more tailored guidance regarding your specific situation.
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