Sick Pay – What Business Owners Need To Know

Few employers are aware that if they continue paying the salary of a disabled employee without a written Qualified Sick Pay Plan (or QSPP) in place prior to the disability, the payments they make lose the deductibility as a wage expense. This will be considered as an “ad-hoc” sick pay plan, and few people are aware of the adverse potential on the business.

In addition of the issue of deductibility of the continued salary to the disabled employee, a precedent is created and a subsequent disability of a non-key employee may result in the claim that the prior payment obligates the employer to pay this second individual.

A QSPP or salary continuation plan is simply the written description of who is covered, how long they must be disabled before payments are made, how much is payable, how long the benefits are payable and what constitutes disability or inability to work. LifeGuy.com can provide you with complimentary sample legal documents needed to implement a QSPP.

While the QSPP or salary continuation plan can be self insured by the business, employers will find that it’s wise and more economical to insure a sick pay plan for pennies on a dollar, with a quality disability insurance – group plan or individual plans for each key employee.

Contact us today to discuss your Sick Pay or Salary Continuation plan. 239-LIFE-GUY or  Insurance@LifeGuy.com

 

 

 

Author: LifeGuy

Daniel LifeGuy Dragan has 125 posts in this blog.

Daniel is a dedicated insurance expert with a focus on helping individuals, families and small businesses avoid financial disasters with Life Insurance products, Paycheck Protection (Disability Insurance), Retirement planning, Cancer and Critical Illness Insurance, executive and business protection plans. With his comprehensive knowledge and experience in financial protection, Daniel can help save money as well as get all your insurance premiums returned to you if you didn't use any of the benefits. "Return of Premium" insurance is one of Daniel's strengths and along with his personal approach to his customers' needs, one of the main reasons his clients are referring him to friends, family and business partners. Daniel offers free financial consultations and can be reached by email at Daniel@LifeGuy.com or phone: (239) LIFE-GUY or 239-466-4466

Discussion

2 comments

  1. I would like acopy of your sample/example of a QSPP document or agreement and / or resolution. Can you email them to me. I do not see anywhere on your site to download it. Thanks!

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