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OHAFLSA006 - Maintain overtime adjustment using non-discretionary bonus processing

OHAFLSA006 - Maintain overtime adjustment using non-discretionary bonus processing

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In this Customizing activity, you activate the processing mode that uses parameter NDB. The payroll function RGRTE with parameter NDB overtime pay is calculated over the bonus amount only, allowing different NDB overtime pay calculation formulas to be used for the same FAOH Adjustment Rate ID.

You configure the adjustment rate IDs you want to use. These IDs consist of a grouping of wage types that will work together during the FLSA overtime calculation with non-discretionary bonus.

In the previous Customizing activity, Activate non-discretionary bonus processing in schema UAP0,you have activated non-discretionary bonus processing in schema UAP0, by activating the call for function RGRTE (Regular Rate of Pay (FLSA Overtime Valuation)) with NDB parameter.

The wage types configured in view V_T596J_US_NDB to contribute with the amount in the regular rate of pay calculation other than the bonus wage type are not considered in the calculation. Those wage types are displayed in the RGRTE NDB payroll function log.

An employee in a given week:

  • Works 40 regular hours (Wage Type “/WRK”)
  • Works 3 overtime hours (Wage Type “/OVR”)
  • Earns a salary of USD 1000.00 (Wage Type “/SLR”)
  • Earns a non-discretionary bonus of USD 100.00 (Wage Type “/NDB”)

*Note that these are fictional wage types used to exemplify the calculation.You may have your own wage types configured, according to your business requirements.

The non-discretionary bonus overtime is calculated over the bonus amount only.

Now, consider the following Adj. ID configuration in view V_T596J_US_NDB:

  • Wage Type,,Wage Type Participation on Adjustment Rate,,

  • /NDB,,Contributes with Amount,,

  • /WRK,,Determined by Processing Class 85,,

  • /OVR,,Reevaluation Only (Does Not Contribute),,

  • /OUT,,Output Only (Does Not Contribute),,

Considering the configuration above, in payroll, the RGRTE NDB function will be calculated as follows: The configuration for /WRK in view V_512W_D and /OVR in view V_512W_B remains the same.

  • Regular rate of pay = USD 100.00 / 40h

  • Regular rate of pay = 2.5

  • NDB overtime premium = 3h * 1.5 * 2.5

  • NDB overtime premium = USD 11.25

  • /OUT = USD 11.25

This behavior allows the NDB overtime premium to be calculated for two different formulas for the same original overtime.

The NDB overtime premium calculation for employees with different requirements using two different formulas for the same overtime can be calculated by changing payroll schema where function RGRTE is called with Par1 = NDB and configuring schema to set the Adjustment Rate ID in Par2

Employee A: from Work Area 1

  • RGRTE NDB RRAB

Employee B: from Work Area 2

  • RGRTE NDB STDB

For example, Adjustment Rate ID for Work Area 1, configured as follows in view V_T596J_US_NDB, uses 43 worked hours in the regular rate of pay calculation:

Wage Type,,Wage Type Participation on Adjustment Rate,,

  • /NDB,,Contributes with Amount,,

  • /WRK,,Determined by Processing Class 85,,

  • /OVR,,Determined by Processing Class 85,,

  • /OUT,,Output Only (Does Not Contribute),,

In payroll, the RGRTE NDB function for adjustment ID for Work Area 1 is calculated as follows:

  • Regular rate of pay = USD 100.00 / (40h+3h)

  • Regular rate of pay = 2.33

  • NDB overtime premium = 3h * 1.5 * 2.33

  • NDB overtime premium = USD 10.45

  • /OUT = USD 10.45

And Adjustment Rate ID for Work Area 2, configured as follows in view V_T596J_US_NDB, uses the 40 regular worked hours in the regular rate of pay calculation:

Wage Type,,Wage Type Participation on Adjustment Rate,,

  • /NDB,,Contributes with Amount,,

  • /WRK,,Determined by Processing Class 85,,

  • /OVR,,Reevaluation Only (Does Not Contribute),,

  • /OUT,,Output Only (Does Not Contribute),,

In payroll, the RGRTE NDB function for adjustment ID for Work area 2 is calculated as follows:

  • Regular rate of pay = USD 100.00 / 40h

  • Regular rate of pay = 2.5

  • NDB overtime premium = 3h * 1.5 * 2.5

  • NDB overtime premium = USD 11.25

  • /OUT = USD 11.25

The payroll schema must be configured to indicate whether the RGRTE NDB must use all worked hours or the regular worked hours in the regular rate of pay by choosing one Adjustment Rate ID or another.

If your company wants the payroll function RGRTE to adjust overtime using non-discretionary bonus processing, execute the following steps:

Step 1

Activate the Subapplication NDB(FLSA NDB adjustment rates for overtime hours) and enter the start and end datesfor which you want the new processing to take effect. The system considers the payment date of the payroll period to check this setting.

Note: If the NDB overtime premium bonus reference dates are inside the current pay period, that bonus overtime premium is calculated in the current payroll period. For this scenario, since there is no payroll results saved in the cluster yet for the current payroll period, the wage types and amounts that will be used in the calculation are the ones present in payroll tables RT and IT at the time the function is called in the payroll schema.

Step 2

Configure the adjustment rate IDs you want to use. These IDs consist of a grouping of wage types that will work together during the FLSA overtime calculation with non-discretionary bonus.

The following standard Adjustment Rate IDs are available for subapplication NDB:

  • Bonus rate with separated bonus method (BRSB): Adjustment ID BRSB (FAOH) plus bonus wage type.
  • Regular rate with aggregated bonus method (RRAB): Adjustment ID RRAB (FAOH) plus bonus wage type.
  • Regular Rate with separated bonus method (RRSB): Adjustment ID RRSB (FAOH) plus bonus wage type.
  • Standard Calculation for Bonus (FLSA) (STDB): Calculated using the Standard Calculation method in the original period.

After selecting the Adjustment Rate ID, enter the wage types relevant for the processing of the adjustment and the validity dates. Note that the configuration of the wage type must be valid for the entire bonus reference period.

Finally, select how the wage types are going to contribute to the adjustment rate. The possible values are:

  • Determined by Processing Class 85: The system uses the value configured in processing class 85 of the chosen wage type. For adjustment rate ID STDB, you should select this value.
  • Contributes with Amount: The wage type contributes with the adjustment rate with the amount, ignoring the hours
  • Contributes with Hours: The wage type contributes with the adjustment rate with the hours, ignoring the amount
  • Output Only (Does Not Contribute): The wage type does not participate in the retrocalculation. However, the difference between the overtime amount paid in the original period and in the retrocalculation is stored in this wage type. The wage types does not store hours or regular rate, only the final amount. You can only have one output wage type per adjustment rate ID.
  • Reevaluation Only (Does Not Contribute): The wage type does not participate in the rate calculation. However, the calculated rate is used to reevaluate this wage type.

Important

Keep in mind that if Par2 is not set in schema, the NDB function will process all the Adjustment Rate IDs configured in view V_T596J_US_NDB will be used in the calculation. For more information, refer to Additional Configuration section in this documentation.






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