In response to COVID-19, the Wisconsin Compensation Rating Bureau (WCRB) established a new rule for recording wages paid to furloughed employees during a state-wide emergency order. This rule will not be restricted to COVID-19 and will apply when a future state emergency is declared.

Wages for Time Not Worked

The following is the new rule, amending the Wisconsin Basic Manual:

“Wages paid to employees who have been furloughed during the time period where a state-wide emergency order issued by a public official, whether or not the employer is exempted from the emergency order, shall be reported at audit under stat code 0012 – Paid Furloughed Workers During A Governmental Emergency Order Impacting Employment. The payroll during the furloughed period is not assigned to a classification code and no premium is calculated. If an employee is requested to perform any duties for their employer during this time period, they are not deemed furloughed while the task is being completed. If the employee is not deemed furloughed, the payroll will be assigned to the classification applicable to the work usually performed. Payroll records must clearly reflect the division of payroll between pre and post emergency declaration.”

What does this mean for employers?

If you are paying employees who are not working due to a government-ordered shutdown, you will not be charged premium on your worker’s compensation for their payroll. It is important for employers to maintain detailed records of a paid furloughed employee’s wages during the Governmental Emergency Order. If the employer keeps separate, accurate and verifiable records, the payroll will be excluded from the employer’s worker’s compensation basis of premium. The WCRB believes there is no justification for charging premium based on payroll that creates no worker’s compensation exposure.

It’s important to note that if an employee performs work duties for part of the day, wages are assigned to the employee’s normal classification.

Who is considered a paid furloughed employee for WI worker’s compensation insurance purposes?

Per the WCRB, a paid furloughed employee is one who is still being paid where they have been given a temporary layoff, an involuntary leave or another modification of normal working hours for a specified duration. This is for payments made by the employer during the paid furloughed time under the Governmental Emergency Order regardless of when it was earned.


For more information, the WCRB created this FAQ document. The document is subject to change as additional questions and issues arise.

As the pandemic develops, look for more relevant guidance from us at Neckerman Insurance Services in the near future, and continue to stay abreast of the latest state and federal developments.