Cocoon’s pay product calculates some forms of top-up pay that an employee receives directly from their employer for time that they are out on leave. Whether an employee receives leave top-up pay depends on an employer’s policies that often are communicated in an internal handbook.

Cocoon’s product will support top-up pay that is paid under an employer paid leave policy that ensures employees continue to receive 100% of their pre-leave salary as a function of that paid leave policy. Cocoon’s product does not support top-up pay that is based on an employer’s application of an employee’s accrued paid time off balance (PTO, vacation or sick leave), regardless of whether the balance is based on a company policy or state or local paid sick leave law.

The reason Cocoon’s pay product does not support PTO or Sick Time as a source of pay is two-fold. First, Cocoon would need to have real-time visibility or access to up-to-date PTO, vacation, or sick time balances for it to accurately calculate the pay employees can receive using those benefits. If Cocoon has an integration with an employer’s HRIS system, this obstacle can be overcome. Cocoon now has a number of integrations that provide it with access to this information. However, that brings us to the second reason why Cocoon does not currently support such benefits. To administer PTO, vacation or sick for employees on leave, Cocoon’s integrations would also need to “push” information back to employers and/or their payroll providers. This is necessary to ensure an employee’s PTO, vacation or sick leave accruals remain accurate after the leave concludes. Cocoon has not yet created “two-way integrations” of this type sufficient to facilitate this function.

Therefore, at this time, employers administering policies where they permit employees to use accrued PTO (vacation or sick time) for a portion or all of an employee’s leave must do so outside of Cocoon’s payroll process. If an employer does so, it assumes responsibility that any payment of such accrued paid time might potentially negatively impact an employee’s application for state or private insurance paid leave benefits. For example, many state or private insurance carriers will ask questions about employees receiving ‘supplemental wages’ or ‘salary continuance’ during leave. Cocoon’s product provides guidance to employees filing for state or private insurance paid leave benefits assuming that employers are not providing top-up pay based on an employee’s use of accrued PTO, vacation or sick time. Employers that permit employees to use accrued paid time during leaves Cocoon administers should take steps to ensure that their and/or their employees’ answers to claims questions about ‘supplemental wages’ or ‘salary continuation’ are accurate and that their policies concerning use of accrued paid time comply with any applicable federal, state and/or local leave laws.