Third-party sick pay is a disability benefit payout that employees may have received from an insurance carrier for qualifying claims. Generally, the insurance carrier will send the employer a form indicating whether any imputed income needs to be recorded on the Form W-2 along with the amount.
MetLife Through Justworks
If your company uses sick leave or disability policies with Metlife offered through Justworks, we have all the claims information we need. If any of your employees receive taxable benefits for their sick or disability leave, we will handle applicable employer and employee taxes and reporting on Form W-2 for your employees.
If your company uses sick leave or disability policies through a third party carrier outside of Justworks, we need you to (i) report each employee who received third party pay for sick or disability leave, as well as the amount of each taxable benefit, and (ii) confirm whether the third party carrier will handle reporting on Form W-2 for your employees. You can upload the summary report from your third party carrier to Justworks. We will review the summary report and handle applicable employer and employee taxes and, if applicable, reporting on Form W-2.
As part of your End of Year Task List, Justworks will have an additional reminder to complete third party sick pay reporting so we can ensure an accurate Form W-2 is sent to your employees in January.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.