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How to estimate parental and medical leave top-ups

How do you top up state paid parental leave without a leave management company?


If your company is big enough to have more than a handful of parental/medical/disability leaves in a year, you probably want a leave management company likeย Cocoonย orย Tilt.ย 


But if you only have a couple a year, it may not be worth it. I've been talking to a bunch of HR pros about how to top up manually.ย 



The problems:ย 


๐Ÿค” ๐—›๐—ผ๐˜„ ๐—ฑ๐—ผ ๐˜†๐—ผ๐˜‚ ๐—ธ๐—ป๐—ผ๐˜„ ๐—ต๐—ผ๐˜„ ๐—บ๐˜‚๐—ฐ๐—ต ๐˜๐—ผ ๐˜๐—ผ๐—ฝ ๐˜‚๐—ฝ ๐—•๐—˜๐—™๐—ข๐—ฅ๐—˜ ๐˜๐—ต๐—ฒ ๐˜€๐˜๐—ฎ๐˜๐—ฒ ๐—ฎ๐—ฝ๐—ฝ๐—ฟ๐—ผ๐˜ƒ๐—ฒ๐˜€ ๐˜๐—ต๐—ฒ ๐—ฐ๐—น๐—ฎ๐—ถ๐—บ?

I once saw a dad in Oregon whose claim wasn't approved until after he came back to work.


๐Ÿงฎ ๐—›๐—ผ๐˜„ ๐—ฑ๐—ผ ๐˜†๐—ผ๐˜‚ ๐—ฐ๐—ผ๐—ป๐˜ƒ๐—ฒ๐—ฟ๐˜ ๐˜€๐˜๐—ฎ๐˜๐—ฒ ๐—ฏ๐—ฒ๐—ป๐—ฒ๐—ณ๐—ถ๐˜๐˜€ (๐—ฝ๐—ฎ๐—ถ๐—ฑ ๐˜„๐—ฒ๐—ฒ๐—ธ๐—น๐˜†) ๐˜๐—ผ ๐—ฎ ๐˜€๐—ฒ๐—บ๐—ถ๐—บ๐—ผ๐—ป๐˜๐—ต๐—น๐˜† ๐—ฝ๐—ฎ๐˜† ๐—ฐ๐˜†๐—ฐ๐—น๐—ฒ?

1 month = 4.28 weeks, except when it's 4.48 weeks, except when it's 4 weeks.



Here's how I do it:


1๏ธโƒฃ I make a conservative estimate about how much the state will pay. Most states have benefit calculators that do the work for you.ย 


When in doubt, I round down.ย 



2๏ธโƒฃ I calculate the top-up based on the conservative estimate in Step 1. For semimonthly, the formula is:


[(Annual salaryรท 52 weeks) โ€“ (Estimated weekly benefit from the state)] x 52 weeks รท 24 semimonthly pay cycles


3๏ธโƒฃ I pay their top-up amount on regular payday until their state claim is approved. (You'll probably have to process this as an off-cycle payroll.)



4๏ธโƒฃ When the state claim is approved, I reconcile any differences between my estimate and what the state actually approved. Since I was conservative, any differences will probably be in the employee's favor (meaning I didn't overpay).ย 



5๏ธโƒฃ I make them whole in a lump sum. If I overestimated the state payments (has never happened), I decrease the remaining payments slightly (or I don't, because it's not worth quibbling over).ย 



6๏ธโƒฃ I then continue to pay the adjusted top-up amount on the regular pay cycle (better if their return date is unknown) or pay a lump sum for the rest of their leave (just make sure to spread out the pay period over the full remainder of their leave so they don't get killed on taxes).



You can do something similar with private short-term disability.ย 


I made a quick and dirty calculator, if you want to use it.



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