Use this screen to define pay types. A pay type is a designation used to calculate labor costs for both hourly and salaried employees. Overtime, for example, is a pay type.
In this screen, you can specify how pay types are calculated, and you can determine which employees are eligible for a particular pay type.
You can use pay types in the Enter Timesheets screen (People\Transactions\Timesheets) to specify premium or straight-time rates of pay. Depending on the pay type, you can add additional amounts, such as bonuses, to the calculated labor cost.
The Pay Types screen controls whether a pay type is eligible for overtime premium recasting and/or weighted average rate calculations.
You must initialize this screen before you begin entering timesheets; in addition, if you want to establish a pay type default in the Labor Settings screen, you must create at least one entry in this application.
How can I pay an employee $1 more than the regular hourly rate for a specific job?
In order to add $1 to the regular hourly rate of an employee, you can create a new pay type with the following criteria:
Factor field must be "1"
You must select the Multiply Hours times Pay Type Amount radio button from the Additional Calculations Based on an Amount group box
You must add "1" in the Amount field (or the applicable amount you want to add to the employee's regular hourly rate)
You must select the OK for Exempt, OK for Non-Exempt, and OK for Salaried checkboxes from the Options group box
Now, when you want the additional pay to be included on the employee's timesheet, use this new pay type when you enter timesheets.
The system will perform calculations based on the employee's hour rate plus the value in the Amount field, times the number of labor hours entered.
Use the fields in this block to define pay codes and descriptions. The checkbox (top right corner) allows you to select/deselect the record. You might select this checkbox if you want to mark the record for deletion, for example.
Enter up to three alphanumeric characters in this field to identify the pay type. Each entry must be unique.
Enter up to 30 alphanumeric characters to describe the pay type code.
Use the fields in this block to provide specific information about the pay types.
This block contains the Additional Calculations Based on an Amount, Options, Overtime Premium Recasting, Allocate Compensated Overtime, and Weighted Average Rate group boxes.
Use the fields in this group box to control how the labor cost on the timesheet line is calculated.
The calculation of the labor cost on the timesheet line is affected by two elements: Factor and Amount. The factor refers to the rate by which the labor cost is multiplied, and the amount refers to a flat dollar figure or amount per hour.
Add Pay Type Amount to Timesheet Line
Select this radio button to add the value in the Amount field to the timesheet labor cost. This may be appropriate for a uniform allowance or other amount that is a flat per pay period amount.
If you selected the Benefit Reimbursement checkbox located in the Options group box, you must select this radio button. Also, the factor must be zero.
An employee has a $50.00 uniform allowance to be reimbursed through payroll. This cost must be added to the timesheet. The following setup must exist:
The Add Pay Type Amount to Timesheet Line radio button must be selected.
The Factor field must display "0.00."
The Amount field must display "$50.00."
The Overtime and Cost Only checkboxes must be selected.
In addition, checkboxes in the Options group box must be selected contingent upon whether the employee is non-exempt, exempt, or salaried.
This setup will add $50.00 to the timesheet line. There are no labor hours associated with the pay type; therefore, you will not enter data in the Hours field in the Enter Timesheets program.
Multiply Hours Times Pay Type Amount
This radio button has three functions:
If the value in the Factor field is greater than zero and the amount is zero, the system will multiply the labor hours by the employee's hourly rate, times the factor. This is the most common calculation used on the timesheet line.
If the value in the Factor and Amount fields is greater than zero, the system will calculate labor costs. In this calculation, the employee's hourly rate is added to the value in the Amount field. This total is multiplied by the number of labor hours, multiplied by the factor.
If the value in the Factor field displays "0.00" and the value in the Amount field is greater than zero, the system will multiply the labor hours by the value in the Amount field.
(Regular Pay - the most commonly used pay type)
1. An employee works 40 regular hours and is paid an hourly rate of $20.00. The following setup must exist:
The Multiply Hours Times Pay Type Amount radio button must be selected.
The Factor field must display "1."
The Amount field must display "0.00."
Additional checkboxes in the Options group box must be selected contingent upon whether the employee is non-exempt, exempt, or salaried. You must select at least one option.
Internally, there will be a calculation of 40 labor hours multiplied by the hourly rate of $20.00 multiplied by a factor of "1." The timesheet cost will total $800.00.
Using the above scenario, the employee is now eligible for five overtime hours, having worked 45 hours instead of 40. The following setup must exist:
The Multiply Hours Times Pay Type Amount radio button must be selected.
The Factor field must display "1.5."
The Amount field must display "0.00."
The Overtime checkbox must be selected.
Additional checkboxes in the Options group box must be selected contingent upon whether the employee is non-exempt, exempt, or salaried. In general, you would not select the OK for Salaried Employees or OK for Exempt Employees checkboxes.
Internally, there would be a calculation of five hours multiplied by an hourly rate of $20.00 multiplied by a factor of 1.5. The timesheet cost would total $150.00.
(Shift Differential)
2. An employee works 20 hours at an hourly pay rate of $20.00, with a $2.00 shift differential. The following setup must exist:
The Multiply Hours Times Pay Type Amount radio button must be selected.
The Factor field must display "1."
The Amount field must display "$2.00."
The Overtime checkbox must be selected if the shift hours are overtime hours for hourly, salaried, or non-exempt employees; in addition, the Overtime checkbox must be selected if the labor cost is to be excluded from the auto-adjust process.
Additional checkboxes in the Options group box must be selected contingent upon whether the employee is non-exempt, exempt, or salaried.
Internally, there will be a calculation of 20 hours multiplied by ($20.00 + $2.00) multiplied by a factor of "1." The timesheet cost will total $440.00. This would be the same result if the hourly pay rate was $22.00.
(Flat Amount)
3. An employee who normally earns $20.00 per hour, works 10 hours on a special project at a $25.00 hourly rate. The following setup must exist:
The Multiply Hours Times Pay Type Amount radio button must be selected.
The Factor field must display "0.00."
The Amount field must display "$25.00."
The Overtime checkbox must be selected if the shift hours are overtime hours for hourly, salaried, or non-exempt employees; in addition, the Overtime checkbox must be selected if the labor cost is to be excluded from the auto-adjust process.
Additional checkboxes in the Options group box must be selected contingent upon whether the employee is non-exempt, exempt, or salaried.
Internally, there will be a calculation of 10 labor hours multiplied by the $25.00 hourly rate. The timesheet cost will total $250.00. This would be the same result if the employee's hourly rate was $25.00; however, this setup eliminates the need to modify data in the Employee Salary Information record. The $20.00 hourly rate would still apply to normal labor hours.
Multiply Hours Times Pay Type Amount Times Factor
Select this radio button to multiply the value in the Amount field by the number of hours on the timesheet line, and to multiply by the factor of this pay type before adding the result to the timesheet line labor cost.
An employee works a special project, receiving a special rate differential in addition to the hourly rate in the Employee Salary Information record. The employee's hourly rate is $20.00, the special project rate is $4.00, and the employee works on a holiday which qualifies the employee for double time. The employee works 15 hours on the special project. The cost must be added to the timesheet. The following setup must exist:
The Multiply Hours Times Pay Type Amount Times Factor radio button must be selected.
The Factor field must display "2."
The Amount field must display "$4.00."
The Overtime checkbox must be selected if the shift hours are overtime hours for hourly, salaried, or non-exempt employees; in addition, the Overtime checkbox must be selected if the labor cost is to be excluded from the auto-adjust process.
Additional checkboxes in the Options group box must be selected contingent upon whether the employee is non-exempt, exempt, or salaried.
Internally, there will be a calculation of 15 labor hours multiplied by the $20.00 hourly rate multiplied by the $4.00 rate differential, multiplied by a factor of "2." The timesheet cost will total $2,400.00.
Factor *
Enter the rate in this field. You cannot enter a value greater than 9.9999.
The factor represents a multiple of the employee's hourly rate.
For example, "1.5" might represent a factor or rate that pays overtime at one and a half times the normal hourly rate. Use this rate for any type of premium pay, such as shift work.
If you select the Benefit Reimbursement checkbox, the value in this field must be zero.
Amount *
The amount you enter in this field will either be a flat amount or multiplied by the number of hours on the timesheet, depending on your radio button selection in this group box.
Since this is a required field, a default value of "0.00" is provided.
Use the checkboxes in this group box to specify the pay type attributes. Do not select checkboxes for features that do not apply to this pay type. At least one option must be checked.
Select this checkbox if this pay type is an overtime or premium-type of pay type.
If this checkbox is selected, the pay type will be ignored when using the auto-adjust feature in the Enter Timesheets program.
Select this checkbox if this pay type is a cost-only pay type.
There are two ways this checkbox can be used to determine the timesheet line amount:
1. An amount can be entered directly in the Amount field. In this circumstance, you do not enter any hours.
2. A cost-only pay type determines the labor cost based upon the hours worked, but then zeroes out the hours on the timesheet line.
If the Add Pay Type Amount to Timesheet Line radio button is selected, the value in the Amount field in this application will default in the Amount field on the timesheet in the Enter Timesheets program.
Select this checkbox if this pay type is eligible for use by exempt employees.
The Enter Timesheets program evaluates this field to determine if exempt employees can use this pay type.
You can identify exempt employees in the Employee Salary Information screen (People\Maintain\Employee).
Select this checkbox if this pay type is eligible for use by non-exempt employees.
The Enter Timesheets program evaluates this field to determine if an employee can use this pay type.
You can identify non-exempt employees in the Employee Salary Information screen.
Select this checkbox if salaried employees can use this pay type.
The Enter Timesheets program checks this field to determine if a salaried employee can use this pay type. You can identify salaried employees in the Employee Salary Information screen.
If you want to pay overtime to salaried employees and this is an overtime pay type, select both the OK for Salaried Employees and Overtime checkboxes.
Select this checkbox if this pay type will be used solely for the purpose of making benefit dependent care, medical care, or cash out reimbursements.
This pay type will not be used on timesheets. If your company is not licensed for the Benefits applications, this checkbox is disabled.
Reimbursement - Exclude from Gross Earnings
Select this checkbox if earnings associated with this pay type should not be included in gross earnings - earnings associated with flexible spending accounts, for example.
When you compute payroll, the earnings amount associated with this pay type will not be included in the gross earnings amount, but rather the total reimbursements amount.
When you select this checkbox, the system will display the following message:
"You have opted to exclude this pay type from gross earnings. You may also want to set up Pay Type Taxability for this pay type."
This message indicates that you should assign the taxability status to the pay type in the Pay Type Taxability screen.
Use the fields in this group box to determine if the account is eligible for overtime premium recasting and, if so, the pay type that should be assigned.
Select this checkbox to control whether this pay type is eligible for recasting using the Overtime Premium Recast screen (People\Configure\Overtime).
Overtime premium recasting is the method by which the premium portion of an overtime amount is removed from a timesheet line and charged to a different project, account and/or pay type.
If you select the Eligible checkbox, any timesheet lines containing this pay type will have the premium portion of overtime recast to a new timesheet line.
To be eligible, the Factor field must display a value greater than "1.0," the Amount field must display the value, "0," and neither the Cost Only nor Benefit Reimbursement checkbox should be selected.
Enter, or use Lookup to select, a pay type code for recasting.
You can enter data in this field only if you have selected the Eligible checkbox.
Use the checkboxes in this group box to determine how overtime is calculated.
Calculate Overtime Premium on this Pay Type
Select this checkbox if the pay type should be calculated for overtime premiums in the Allocate Compensated Overtime Across Timesheet Lines application.
Allocate Overtime Premium to this Pay Type
Select this checkbox if the pay type should be allocated for overtime premiums in the Allocate Compensated Overtime Across Timesheet Lines application.
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Note: When you first access the Pay Types screen, both the Calculate Overtime Premium on This Pay Type and Allocate Overtime Premium to This Pay Type checkboxes are selected. Selecting both checkboxes enables the pay type to be included in the overtime premium calculation and to receive an allocation. |
Use the radio buttons in this group box to control how or whether the Apply Weighted Average Rates application processes this pay type. This application recalculates the labor costs (normally overtime) for employees working at multiple rates of pay within a pay period.
Select this radio button to include this pay type in the calculation of the weighted average pay rate for employees who have worked at more than one rate of pay for the pay period.
The weighted average rate is determined by adding the labor cost for all designated lines and dividing by the sum of the related hours for those lines.
This rate then becomes the basis for recalculating pay types so designated (normally overtime).
Select this radio button to make this pay type eligible for labor cost recalculations by the Apply Weighted Average Rates application.
Timesheet lines containing this pay type will have the labor cost recalculated (by the Apply Weighted Average Rates application).
Normally, this would be an overtime pay type and would be used for employees working at multiple rates of pay in the same pay period.
One requirement of FLSA (Fair Labor Standards Act) is that a non-exempt employee working at more than one rate of pay within the same workweek be paid at the weighted average rate earned during the week.
Select this radio button to designate that any timesheet line containing this pay type should be skipped by the Apply Weighted Average Rates application.
Select this radio button for benefit reimbursement pay types.
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Note: Since the Labor Settings screen is not available in this web version, you must make settings changes in the client/server version. After you complete your settings modifications, you must return to the web version and access the Reload Global Settings screen (Administration\Utilities\System Administration). This utility establishes continuity between the web and client/server environments. Select the appropriate checkbox and click the Action icon to execute synchronization. |
* A red asterisk denotes a required field.
Changes to this screen update the LD_PAY_TYPE (Pay Types) table.
