Steps: Process Third-Party Sick Pay (USA)

You can set up third-party sick pay when an outside party, such as an insurance company, pays an employee who is unable to work due to illness or disability. Workday enables you to process sick pay when the third party transfers liability for employer taxes to your company. You can process it for either of these scenarios:

Your company issues the W-2.
Third-party issues the W-2.

Workday automatically calculates the employer taxes. Workday creates the W-2s when your company is responsible for issuing them and creates a Third-Party Sick Pay Recap when the third-party issues them.

As with any new procedure, try this in your Sandbox Preview, as you must complete the manual payment to create W-2 data.