Pay code: Every job and activity step has a pay code. When time is entered for the job/activity step, the pay code tells Client Payroll Manager which calculation method to use to calculate earnings (jobs and paid activity steps), whether to add or subtract hours from benefits, whether to apply the hours to attendance, subsidy, overtime premium, or holiday premiums, and how to export the earnings to your payroll system.
Calculation Method: A calculation method is a set of rules that determine how earnings are calculated. The rules use a combination of prevailing wages, productivity rates, and employee wage rates to calculate the earnings.
Prevailing wage: Prevailing wage is the local rate paid for a type of work. Prevailing wage rates are set for prevailing wage types (broad categories, such as assembly work, janitorial work, or food service). The prevailing wage rate for each type of work is based on a survey of the wages local companies pay for similar work done at 100% productivity. Prevailing wage rates are used to calculate earnings for piece rated and some hourly job steps.
The system maintains a history of prevailing wage rates and the date on the time record determines which rate is used to calculate earnings.
Time study rate: A time study rate is the number of pieces a person working at 100% productivity can complete in the time study period (normally 50–60 minutes). Time study rates are used with prevailing wage rates to calculate earnings for piece rated job steps.
Key concept: Time study rate and piece rate are often confused. Time study rate is a count of the number of pieces completed working at 100% productivity. Piece rate is the dollar amount paid per piece and is calculated as prevailing wage rate / time study rate.
Wage rate: Wage rates are pay rates used to calculate earnings for some types of hourly pay. Wage rates are specific to each employee and are set up in the Employee Setup subject, Wage Rates tab. They are used under circumstances defined by the rules of the calculation method. Wage rates are often used to calculate earnings for vacation and sick time.
Each wage rate consists of a rate type and a dollar amount. Each wage rate has an effective date and the system maintains a history of the wage rates. Only one rate can be in effect at any time for each rate type. The date on the time record determines which rate is used to calculate earnings.
Date sensitive calculations
Client Payroll Manager maintains a history for prevailing wage rates, employee wage rates, and productivity rates.
The rates in effect on the date of the time record are used to calculate earnings. Adjustments to previous earnings are calculated based on the rates in effect at the time the original time record was entered. Earnings reports use the rates in effect for the date range being reported.
For example, your prevailing wage rate for assembly work for 2007 could be $8.50, while the prevailing wage rate for 2008 could be $9.00. If you report time for assembly jobs worked in 2008, the $9.00 rate is used. If you adjust a record entered in 2007, the $8.50 rate is used for the adjustment.
It is very important that you maintain your rate histories so that earnings calculations and reports are accurate.