Current through Register Vol. 46, No. 15, April 8, 2022
a) Sick pay is any amount paid to an employee
for any period during which the employee is temporarily absent from work
because of injury, sickness, or disability. Except as provided in subsection
(b), sick pay paid with respect to employment by employers and third parties is
wages under Sections 234 and 235 of the Act and subject to the payment of
contributions. Determination of the individual or entity liable for reporting
wages and paying contributions on sick pay depends on whether the sick pay is
paid by the employer, by an agent of the employer, or by a third party that is
not the employer's agent. Except as provided in subsection (d), the entity or
individual who pays the sick pay is responsible for reporting those payments as
wages and paying contributions to the Department.
The following payments, made to, or on
behalf of, an individual or any of his or her dependents under a plan or system
established by an employer that makes provision generally for individuals
performing services for him or her (or for such individuals generally and their
dependents) or for a class or classes of such individuals (or for a class or
classes of such individuals and their dependents), are not "wages" subject to
the payment of contributions:
1) payments made
under a workers' compensation law;
2) payments made on account of medical or
hospitalization expenses in connection with sickness or accident
3) payments made on
account of death;
4) payments made
on account of sickness or accident disability made by an employer to or on
behalf of an employee after the expiration of 6 calendar months following the
last calendar month in which the employee worked for the employer.
c) If an employee receives a
payment on account of sickness or accident disability that is not made under a
workers' compensation law or a statute in the nature of a workers' compensation
Act, the payment is not excluded from "wages" even if the payment must be
repaid if the employee later receives a workers' compensation award or an award
under a statute in the nature of a workers' compensation Act with respect to
the same period of absence from work.
Except when the payments do not constitute
"wages" (see subsection (b)), and except as provided in subsection (e), a third
party payor is the employer for purposes of reporting wages and paying
contributions, unless all of the conditions in subsections (d)(1) through (4)
1) The last employer for whom the
individual worked prior to becoming sick or disabled or for whom the individual
was working at the time the individual became sick or disabled made
contributions on behalf of the individual to the plan or system under which the
individual is paid.
2) There is an
agreement between the third party payor and the employer that the employer will
be required to report the wages and pay the contributions.
The third party payor notifies the
employer at least six working days prior to the end of the month following the
preceding calendar quarter (or the preceding month in the case of an employer
subject to 56 Ill. Adm. Code
) of the Social Security account numbers, employee names, and amount of
sickness or accident disability payments made during the month or calendar
quarter, as the case may be.
A) For the
purposes of determining timeliness of the notice, the provisions of 56 Ill.
A notification that
contains the required information and that has been made by a third party to an
employer, as required by the Federal Insurance Contributions Act (
et seq.) will be sufficient notification
under this Part.
employer reports the wages pursuant to Section 2760.125, and includes the wages
in the calculation and payment of contributions.
A third party making a payment on account
of sickness or accident disability to an individual as agent for the employer
or making such a payment directly to the employer shall not be treated as the
employer with respect to the payments unless the agency agreement so provides.
The determining factor as to whether a third party is an agent of the employer
is whether the third party bears any insurance risk.
1) If the third party bears no insurance risk
and is reimbursed on a cost plus fee basis, the third party is an agent of the
employer even if the third party is responsible for making determinations of
eligibility of the individual employees of the employer for payments on account
of sickness and accident disability.
2) If the third party is paid an insurance
premium and not reimbursed on a cost plus fee basis, the third party is not an
agent of the employer, but the third party is treated as the employer, as
provided in subsection (d).
For purposes of subsection (b), a
dependent of an individual is the individual's husband or wife, children and
any other member of the individual's immediate family as defined in
g) Except for any wages paid to an individual
for services actually performed in employment of the third party payor, a third
party payor that is liable for purposes of reporting wages and paying
contributions for payments made on account of sickness and accident disability
is not the last 30-day chargeable employer for purposes of Section 1502.1 of