Time Management Policies

Time Management Policies

You use policies to set up rules governing premium eligibility and autogeneration of time from work schedules.

Can you automatically deduct time from a workers timecard for meals and breaks?

Yes, using the Hour Deduction policy, you can automatically deduct time for meals and breaks after a defined number of hours have elapsed. Hour deduction policies normally apply to clock in/clock out setups, or when the total hours for the day are included on the timecard.

Using Time Management policies, can you automatically calculate overtime for a specified number of hours worked?

Earning policies is a grouping of rules and a holiday calendar that is assigned to each person. The earning policy identifies the daily/weekly base and overtime rules, the holiday calendar, and the premium policies to use in calculating pay. You can define the number of hours worked for regular pay, overtime pay and double time pay within the earning policy.

Oracle Time & Labor Policies

Oracle Time & Labor Policies

Use policies to set up rules governing premium eligibility and autogeneration of time from work schedules. Oracle Time & Labor provides the following policies:

Note: Although the policy defines premiums a person is eligible to receive, this does not imply they will automatically receive them. Eligibility is based on time ranges, actual time worked, and applicable pay rules.

You associate a premium eligibility policy with an earning policy, which you assign to your workers.

Hour Deduction Policy

You must create an hour deduction policy if your company automatically deducts time for a meal and breaks. Defining an hour deduction policy is optional within Oracle Time & Labor.

Hour deduction policies normally apply to clock in/clock out setups or when the total hours for the day are included on the timecard. Use these policies to define the amount of time to be subtracted from the hours used to make the paycheck.

Assign an hour deduction policy to an employee, directly. It is not attached to any other policies or structures within Oracle Time & Labor. For more information, see: Creating an Hour Deduction Policy

If required, you can define an hour deduction policy with deduction rules defined in minutes. See: Creating an Hour Deduction Policy with Minutes as the UOM.

Shift Differential Policy

The shift differential policy defines premiums for those shifts that require a special rate of pay.

The shift differential policy identifies the shift differential start and stop time, and the earnings type to be used for the shift differential premium. Employees who are eligible and who work during the shift automatically receive the shift differential premium. An employee who receives normal pay for a shift would not have a shift differential policy assigned.

If an employee's work plan has a shift differential override defined for a shift, this value overrides the earnings type selected in the shift differential policy.

Premium Eligibility Policy

The premium eligibility policy defines a list of premiums associated with base hours that a person or group of people may be eligible to receive. For example, if a person has a premium eligibility policy with a base hours type of regular and an authorized premium of hazardous pay, then for each regular hour worked hazardous pay is included.

Although the policy defines premiums people are eligible to receive, this does not imply they will automatically receive them. Eligibility is based on time ranges, actual time worked, and applicable pay rules.

For example, an employee works his normal shift and receives Regular Pay for eight hours. However, if he works the second shift he may be eligible to receive a “second shift premium" that would pay an extra 25% of his hourly pay rate. The premium eligibility policy determines what premium an employee is paid for the specific hours worked.

You associate a premium eligibility policy with an earning policy, which you assign to your workers.

While the premium eligibility policy determines the premiums for which an employee may be eligible, it is the premium interaction policy that determines how premiums relate to each other.

Planning Premium Eligibility Policies

You must define a premium eligibility policy for each logical grouping of people, to avoid duplication and to assign premiums that are appropriate for specific sets of people. For example, you could group people by shifts, job functions, or work plans, and associate the appropriate premiums and base hour types with each group.

The following matrix illustrates one example that would require at least three premium eligibility policies, one for each people group:

People Group Base Hours Type Authorized Premiums
Welders Regular
Overtime_1.5
Welding Premium
Danger Pay
Fork Lift Drivers Regular Work Hard Premium
Truck Drivers Holiday Pay Holiday Premium

Notice that workers must be eligible for the elements that represent the premiums on the policy or they will not receive those premiums. So check that your element links do not conflict with your policy setup.

Premium Interaction Policy

The premium interaction policy is key to determining how authorized premiums for a specific premium eligibility policy relate to each other.

A premium interaction policy determines how a premium should be calculated based on other premiums, and in what order they should be processed. The calculation for the premium interaction is dependent on whether the premium is included or excluded in the hourly base formula for the premium and the defined processing order for the elements. As an example, if a person is eligible for a premium and also for overtime, the system needs to know if the premium factor or rate is applied to a person's base rate only, or the base rate plus the overtime.

You define premium interaction policies only for premiums that are a factor or a rate, not a fixed amount.

Planning Premium Interaction Policies

If you have more than one authorized premium per base hours type on a premium eligibility policy, and you will use one premium as a base for another, then you must create a premium interaction policy to indicate that one is to be applied to another. If you only have one authorized premium per base hours type on a premium eligibility policy, or if all of them apply only to a base hour, you do not need to create a premium interaction policy.

To link a premium eligibility policy to a premium interaction policy, assign them both to the same earning policy.

If your premiums interact with each other (that is, are to be applied to each other rather than directly to a base hour type), you will need to ensure that you have properly selected the appropriate processing order for each one. For example, if you have two premiums that you pay on a regular pay, such as a welding premium and a high risk premium, and you require that one of the premiums is to be applied to the other rather than only to regular pay, the two premiums cannot have the same processing order. One must be higher than the other. It does not matter which one is higher, since a factor applied to a factor will give the same result no matter what order they are processed You select processing order in the Element Time Information window.

Premium Interaction Policy Example

Overtime Pay = processing order of 40

Second Shift Premium = processing order of 20

Hourly Rate = $10

Overtime Pay = factor/multiple of 1.5

Second Shift Premium = fixed rate per hour $0.40

Third Shift Premium = fixed rate per hour $0.40

When the employee works overtime and receives either the second or third shift premium at $0.40 an hour, the employee actually receives a rate of $0.60 per hour. ($0.40 x 1.5 = $0.60)

Before you enter a premium interaction policy, you should consider creating a matrix of your elements so that you can define which elements interact with other elements. You begin by listing all Regular Pay elements, then all of your premiums that are factors/multiples. In the first column, list them in processing order. Across the top, list them in reverse order. For example:

ELEMENT SHIFT 3 SHIFT 2 HARD WORK OVERTIME 2.0 OVERTIME 1.0 REG
Processing Order 30 30 20 15 15 10
REGULAR 10 INCLUDE N/A N/A INCLUDE INCLUDE  
OVERTIME 1.0 15 INCLUDE N/A INCLUDE      
OVERTIME 2.0 15 INCLUDE N/A INCLUDE      
HARD WORK 20 INCLUDE INCLUDE        
SHIFT 2 30            
Shift 3 30            

Earning Policy

Each earning policy is a grouping of rules and a holiday calendar that is assigned to each person. The earning policy identifies the daily/weekly base and overtime, and day of the week rules, the holiday calendar, and the premium policies to use in calculating pay.

Earning policies allow for the evaluation of overtime policies based on element points assigned to each individual element in which you assign element time information. The optional use of points in an earnings policy is enabled by a check box on the Earnings Policy. The default value for the check box is NULL to ensure compatibility with existing earnings policies. The points evaluation uses values assigned by you. The values assigned to each element returns a points total value for the daily rule and weekly rule within an earnings policy.

If time entries do not qualify for a special earning rule, or if the entries are not used, the points evaluation is used. The rule returning the highest number of points is used in the overtime evaluation. The points calculation evaluates each day entered on the timecard window that does not qualify for the special rule. Where points are not used in an earnings policy, the daily and weekly rule evaluates as the earning policy is defined.

You must define an earning policy for each of your organization's pay policies.

You can also use the earning policy to record how you want time entry hours rounded up or down to standard intervals (such as 15 minutes).

Creating an Hour Deduction Policy

Use the Hour Deduction Policy window to create an hour deduction policy.

If required, you can define an hour deduction policy with deduction rules defined in minutes. See: Creating an Hour Deduction Policy with Minutes as the UOM.

To create an Hour Deduction Policy

  1. Change the effective From date to the appropriate start date for the policy. For initial implementation, this is usually a standard date (such as 01-Jan-1950) that predates any employee hire dates. If the policy expires on a known date, you can enter it in the To field.

  2. Enter a name and optionally a description for the hour deduction policy.

  3. If you want to restrict this policy to the current business group, clear the Global check box.

  4. In the Hour Deduction Rules region, select Meal time deduction or Break time deduction.

  5. Enter the amount of time to be deducted for the item you selected. For example, for a 15 minute break, you would enter .25 in the Hours field.

  6. In the Time Period field, enter the number of hours that are to elapse before the deduction is taken.

    For example, if you deduct 15 minutes for breaks after 4 hours worked, enter 4 hours in the Time Period field.

  7. Continue entering rows in the Hour Deduction Rules region to cover all the meals and breaks you require.

  8. Save your work.

Creating an Hour Deduction Policy with Minutes as the UOM

An hour deduction policy with deduction rules defined in minutes establishes how many minutes, if any, must be automatically deducted as unpaid time from the employee's recorded time. To create this type of hour of deduction policy, select Minutes as the unit of measure (UOM).

To create an Hour Deduction Policy in Minutes

  1. Set the HXT: Allow HDP Definition in Minutes profile option. When you set this profile option, the Unit of Measure field is available in the Hour Deduction Policy window.

  2. Navigate to the Hour Deduction Policy window to create an hour deduction policy using minutes as UOM.

  3. Change the effective From date to the appropriate start date for the policy. For initial implementation, this is usually a standard date (such as 01-Jan-1950) that predates any employee hire dates. If the policy expires on a known date, you can enter it in the To field.

  4. Enter a name and a description for the hour deduction policy.

  5. Select Minutes in the Unit of Measure field.

  6. If you want to restrict this policy to the current business group, clear the Global check box.

  7. In the Hour Deduction Rules region, select Meal time deduction or Break time deduction

  8. Enter the amount of time to be deducted for the item you selected in minutes. For example, for a half an hour break, enter 30 in the Minutes field.

  9. In the Time Period field, enter the number of minutes that are to elapse before the deduction is taken. For example, if you deduct 15 minutes for breaks after 4 hours worked, enter 240 minutes in the Time Period field.

  10. Continue entering rows in the Hour Deduction Rules region to cover all the meals and breaks you require.

  11. Save your work.

    Note: You can create an hour deduction policy with deduction rules defined either in hours or minutes, but not both.

Expiring an Hour Deduction Policy

Use the Hour Deduction window to expire an existing hour deduction policy.

Note: You cannot expire an hour deduction policy that is assigned to an employee. You must first change the hour deduction policy assignment before expiring the hour deduction policy. Do not delete an hour deduction policy unless you wish the record removed permanently from the application. Deleting an hour deduction policy prevents an audit trail.

To expire an hour deduction policy

  1. Query to find the hour deduction policy you wish to expire.

  2. Place the cursor in the To field in the Effective Dates region and enter the appropriate end date.

  3. Save your work.

    Use the Hour Deduction Policy window to view an expired hour deduction policy.

To view an expired hour deduction policy

  1. Change the effective date to the beginning date of the period you are interested in viewing prior to the calendar end date.

  2. Query to find the expired hour deduction policy you wish to view. The application returns the query with the expired hour deduction policy.

Creating a Shift Differential Policy

The shift differential policy identifies the shift differential start and stop time, and the earnings type to be used for the shift differential premium. If a person works during the shift, he or she would be eligible to receive that shift differential premium.

Use the Shift Differential Policy window.

To create a Shift Differential Policy

  1. Change the effective From date to the appropriate start date for the policy. For initial implementation, this is usually a standard date (such as 01-Jan-1950) that predates any employee hire dates. If the policy expires on a known date, you can enter it in the To field.

  2. Enter the name of the shift differential policy and optionally enter a description.

  3. In the Shift Differential Rules region, enter a name for the rule.

  4. Enter the start and stop time of the shift differential.

  5. The Carryover field displays the end time for the shift. If you want people to continue receiving the premium for this shift when they work into the next shift, update the Carryover field to the end time for receiving the shift differential premium.

  6. Select the Premium Earning Type for the shift differential. This premium must also be on the person's premium eligibility policy.

  7. Save your work.

Expiring a Shift Differential Policy

Use the Shift Differential policy window to expire an existing shift differential policy.

Note: You cannot expire a shift differential policy that is assigned to an employee. You must first change the assignment of the Shift Differential policy before expiring the shift differential policy. Do not delete a shift differential policy unless you wish the record removed permanently from the application. Deleting a shift differential policy prevents an audit trail.

To expire a shift differential policy

  1. Query to find the shift differential policy you wish to expire.

  2. Place the cursor in the To field in the Effective Dates region and enter the appropriate end date.

  3. Save your work.

Viewing an Expired Shift Differential Policy

Use the Shift Differential Policy window to view an expired shift differential policy.

To view an expired shift differential policy

  1. Change the effective date to the beginning date of the period you are interested in viewing prior to the calendar end date.

  2. Query to find the expired shift differential policy you wish to view. The application returns the query with the expired shift differential policy.

Creating a Premium Eligibility Policy

A premium eligibility policy lists the authorized premiums associated with each Base hours type on the premium eligibility policy. Although the policy defines premiums for which people are eligible, this does not imply they will automatically receive them. Eligibility is based on time ranges, actual time worked, and applicable pay rules.

Use the Premium Eligibility Policy window to create a premium eligibility policy.

To create a Premium Eligibility Policy

  1. Change the effective From date to the appropriate start date for the policy. For initial implementation, this is usually a standard date (such as 01-Jan-1950) that predates any employee hire dates. If the policy expires on a known date, you can enter it in the To field.

  2. Enter the name of the premium eligibility policy, and optionally enter a description.

  3. In the Premium Eligibility Rules region, select a Base Hours Type. You select from the list of elements for which you chose an earning category in the Element Time Information window.

  4. In the Premiums region, select the appropriate Authorized Premium. You select from the list of elements for which you chose a premium earning category in the Element Time Information window.

  5. Continue selecting all the authorized premiums that apply.

  6. If you require more than one Base Hours Type, save the data and select another Base Hours Type. Then repeat steps 3 and 4.

  7. Save your work.

Expiring a Premium Eligibility Policy

Use the Premium Eligibility window to expire an existing premium eligibility policy.

Note: You cannot expire a premium eligibility that is assigned to an earning policy. The earning policy will need to be expired prior to expiring the assigned premium eligibility policy. Do not delete a premium eligibility policy unless you wish the record removed permanently from the application. Deleting a premium eligibility policy prevents an audit trail.

To expire a premium eligibility policy

  1. Query to find the premium eligibility policy you wish to expire.

  2. Place the cursor in the To field in the Effective Dates region and enter the appropriate end date.

  3. Save your work.

Viewing an Expired Premium Eligibility Policy

Use the Premium Eligibility Policy window to view an expired premium eligibility policy.

To view an expired premium eligibility policy

  1. Change the effective date to the beginning date of the period you are interested in viewing prior to the calendar end date.

  2. Query to find the expired premium eligibility policy you wish to view. The application returns the query with the expired premium eligibility policy.

Creating a Premium Interaction Policy

While the premium eligibility policy determines which premiums a person may be eligible for, it is the premium interaction policy that determines how authorized premiums for a specific premium eligibility policy relate to each other--that is, the order of premium calculation.

Use the Premium Interaction Policy window.

To create a Premium Interaction Policy

  1. Change the effective From date to the appropriate start date for the policy. For initial implementation, this is usually a standard date (such as 01-Jan-1950) that predates any employee hire dates. If the policy expires on a known date, you can enter it in the To field.

  2. Enter the name of the premium interaction policy and optionally enter a description.

  3. In the Premium Interaction Rules region, select a premium hours type.

  4. In the Premiums region, select the appropriate premium.

  5. Select Include if this premium is included in the hourly base formula for the premium selected in step 2, otherwise select Exclude.

  6. Continue selecting all the authorized premiums that apply.

  7. If multiple premium hours types are to interact with other premiums, save the data and select another Premium, as in step 2.

  8. Continue entering all data following steps 3 to 5.

  9. Save your work.

Expiring a Premium Interaction Policy

Use the Premium Interaction window to expire an existing premium interaction policy.

Note: You cannot expire a premium interaction policy that is assigned to an earning policy. The earning policy will need to be expired prior to expiring the assigned premium interaction policy. Do not delete a premium interaction policy unless you wish the record removed permanently from the application. Deleting a premium interaction policy prevents an audit trail.

To expire a premium interaction policy

  1. Query to find the premium interaction policy you wish to expire.

  2. Place the cursor in the To field in the Effective Dates region and enter the appropriate end date.

  3. Save your work.

Viewing an Expired Premium Interaction Policy

Use the Premium Interaction Policy window to view an expired premium interaction policy.

To view an expired premium interaction policy

  1. Change the effective date to the beginning date of the period you are interested in viewing prior to the calendar end date.

  2. Query to find the expired premium interaction policy you wish to view. The application returns the query with the expired premium interaction policy.

Creating an Earning Policy

Each Earning Policy is a grouping of rules and a holiday calendar that is assigned to each person. The earning policy identifies the daily/weekly base and overtime rules, the holiday calendar, and the premium policies to be used in calculating pay. You must define an earning policy for each set of rules.

Use the Earning Policy window to create a daily, weekly, or special earning policy.

To create an earning policy

  1. Change the effective From date to the appropriate start date for the policy. For initial implementation, this is usually a standard date (such as 01-Jan-1950) that predates any employee hire dates. If the policy expires on a known date, you can enter it in the To field.

  2. Enter the name of the earning policy and optionally enter a description.

  3. Select a Type of earning rule, such as Base, or an overtime rule:

    • Use Daily Overtime if you only need to define rules based on a day.

    • Use Weekly Overtime if you only need to define rules based on a week.

    • Use Special Overtime if you are defining rules that are based on a combination of a day, and/or week, and/or a consecutive days' basis.

    • Use Day of the Week if you are defining a rule based on a specific day of the week.

  4. If you wish to use the points as assigned on the elements, select the points box. Otherwise, leave blank

  5. Select a Holiday Calendar.

  6. In the Earnings included to meet OVT cap field, select the appropriate earning group.

  7. Select the appropriate Premium Eligibility Policy, if applicable.

  8. Select the appropriate Premium Interaction Policy, if applicable.

  9. Enter the appropriate Minimum T/C Interval, if applicable.

    For example, if the minimum time card interval is 15, then time entry hours are automatically rounded up/down to 15 minute increments. The interval begins at the beginning of an hour, so this example would mean that input and/or generated hours would be 14:00, 14:15, 14:30, 14:45, 15:00, 15:15, etc.

  10. Enter the amount in the Round Up At field, if applicable.

    If the minimum timecard interval is 15 and the Round Up At is 8, then time clocked at 14:07 would be rounded down to 14:00, but a time clocked at 14:08 would be rounded up to 14:15. These would be the hours and increments that would be sent to Element Entries and retained in the database.

  11. Enter rules in the Daily/Weekly Base and Overtime Rules region, according to the policy type you selected in step 3. If you selected:

    • Daily, you must enter DAY and HOL

    • Weekly, you must enter WKL and HOL

    • Special, you must enter DAY, WKL, and HOL.

    Ensure you enter rules in this sequence: Daily, Weekly, and Special, if all are applicable.

  12. Enter all applicable rules.

  13. Save your work.

Expiring an Earning Policy

Use the Earning Policy window to expire an existing earning policy.

Note: You cannot expire an earning policy that is assigned to an employee. You must first change the earning policy assignment to an effective earning policy. Do not delete an earning policy unless you wish the record removed permanently from the application. Deleting an earning policy prevents an audit trail.

To expire an earning policy

  1. Query to find the earning policy you wish to expire.

  2. Place the cursor in the To field in the Effective Dates region and enter the appropriate end date.

  3. Save your work.

Viewing an Expired Earning Policy

Use the Earning Policy window to view an expired earning policy.

To view an expired earning policy

  1. Change the effective date to the beginning date of the period you are interested in viewing prior to the calendar end date.

  2. Query to find the expired earning policy you wish to view. The application returns the query with the expired earning policy.