PeopleSoft Enterprise Global Payroll for Spain 9.1 PeopleBook

Terminating Employees

This chapter provides an overview of terminations and discusses how to:

Set up statutory severance days.
Define labor agreement overrides for terminations.
Manage employee termination information.
Terminate employees in self-insurance companies.
Process termination pay.
Run termination reports.
View delivered termination elements.

Understanding Terminations

This overview discusses:

Termination management.
Terminations in the pay process flow.
Preadvised days nonfulfilled.
Severance pay.
Job litigation salary.

Termination Management

When an employee is terminated, the company pays the employee for any vacation days not taken, for days of the month worked, and for the proportion of the extra period payment earned. The company also subtracts the pending loans or advances repayments.

Often an employee termination can occur under nonstandard conditions. For example:

An employee or employer might preadvise of the termination with fewer days than the law requires.
An employee's severance pay might be different from the amount set by law.
An employee might not agree with the termination reason and pursue litigation.

As demonstrated in these examples, employee terminations are not always straightforward. For such cases in which the termination process has exceptions, the company must determine nonfulfilled preadvise days, severance pay, and litigation salary so that the payroll process can calculate the desired results for termination pay. PeopleSoft Enterprise Global Payroll for Spain provides functionality that enables you to manage termination information and calculations for these nonstandard conditions.

To terminate an employee, use the Job Data component (JOB_DATA). The system calculates termination pay using the same process list as the regular payroll. You can create specific calendars for termination processing or run termination processing within the calendar group that corresponds to the regular payroll. To ensure proper calculation of termination pay, you must first:

Administer termination pay criteria through the Labor Agreement component.
Define statutory severance days through the Statutory Rates ESP component.
Define nonstandard conditions involving nonfulfilled preadvise days, nonstatutory severance, or litigation salaries through the Manage Terminations ESP component, when applicable.

Terminations in the Pay Process Flow

This diagram shows how the input of various data such as earnings, vacation, advance, and loan balances are used to calculate termination pay, termination letters, and company certificates involved with terminations and the overall pay process flow of PeopleSoft Enterprise Global Payroll for Spain:

Terminations in the pay process flow for PeopleSoft Enterprise Global Payroll for Spain

Preadvised Days Nonfulfilled

A preadvise period is the legal number of days that the employee and the employer have to communicate the end of a labor relation before the effective date of the termination. The minimum number of days for a preadvise period depends on various data such as contract type, termination reason, requirements that were established in the employee's labor agreement, and so on. Employees are penalized if they do not fulfill the number of preadvice days and compensated if the employer does not fulfill the number of preadvice days. These amounts are added or deducted from the employee's termination payment as applicable.

Use the Labor Agreement ESP - Terminations page to define the daily salary for preadvised days that the payroll process uses for terminations of labor agreements. Use the Termination Management ESP page to define the number of nonfulfilled preadvised days and who failed to notify within the minimum number of preadvice days.

Severance Pay

Severance pay is a fixed amount of money that the company must pay the terminated employee based on the type of contract that the employee has with the company, less the amount that the employee owes the company for items as loans and advances. If an employee is dismissed for reasons other than disciplinary, the employee has a right to receive severance pay. This amount depends on the number of worked years, daily salary as of the termination date, and termination reason. The employer pays the employee this amount at the end of the labor relation. However, the employee has the right to appeal the severance pay amount through litigation.

Severance pay for terminated employees can be determined by one of the following methods:

Statutory rates can determine the number of days by year to pay for severance and the maximum number of periods to pay for severance, depending on the termination reason.
The labor agreement for the employee can improve the number of statutory days and the maximum number of periods to pay for severance.
The employer and the employee can reach an agreement by which the number of days by year, the maximum number of periods for severance pay, or both is greater than the statutory rate.
The employer and the employee can reach an agreement for a specific amount of severance pay that is greater than the statutory rate.
A judge can impose an amount for severance pay.

Use the Severance Days page in the Statutory Rates ESP component to define statutory days and periods for severance pay as defined by the social security general treasury (Tesorería General de la Seguridad Social [T.G.S.S.]). Use the Labor Agreement ESP - Terminations page to define the daily salary for severance pay and override the statutory values that the payroll process uses for terminations of labor agreements. Use the Termination Management ESP page to override calculated values for severance pay.

Job Litigation Salary

Litigation salary is the salary that the company is required by law to pay the terminated employee if the employee appeals the termination. If an employee appeals termination and the appeal goes to court, that employee has a right to receive job litigation salary for the period between the termination date and the final resolution date of the litigation regardless of the ruling. The job litigation salary is equivalent to the employee's regular salary. If the employee and the company reach a friendly agreement before the appeal goes to court, job litigation salary is not needed.

Use the Labor Agreement ESP - Terminations page to define the daily salary for job litigation that the payroll process uses for terminations of labor agreements. Use the Termination Management ESP page to enter the job litigation information.

Setting Up Statutory Severance Days

This section discusses how to set up statutory days and periods for severance pay.

See Also

Setting Up Statutory Rates

Page Used to Set Up Statutory Severance Days

Page Name	Definition Name	Navigation	Usage
Severance Days	GPES_STA_TERM	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Additional Rates, Ceilings, Values, Statutory Rates ESP, Severance Days	For each termination reason, define the default statutory values for the number of severance days per year and the maximum number of periods for severance pay, as defined by the Social Security General Treasury (Tesorería General de la Seguridad Social [T.G.S.S.]).

Setting Up Statutory Days and Periods for Severance Pay

Access the Severance Days page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Additional Rates, Ceilings, Values, Statutory Rates ESP, Severance Days).

Termination Reason

Select the termination reason for which you want to define statutory values for severance days and periods. The payroll calculation process uses these values to calculate severance pay for indemnification of service. T.G.S.S. defines and supplies the valid termination reasons and statutory values. A delivered translate table stores the valid termination reasons.

Effective Date

Enter the date on which the statutory severance day and period values become effective for the corresponding termination reason.

Days/Year

Enter the maximum days per year to pay for indemnification of service when calculating the severance pay for the corresponding termination reason.

Max. Periods(maximum periods)

Enter the maximum number of periods to pay for the corresponding termination reason.

Defining Labor Agreement Overrides for Terminations

This section discusses how to set up labor agreement overrides for terminations.

See Also

Defining Labor Agreements

Page Used to Define Labor Agreement Overrides for Terminations

Page Name	Definition Name	Navigation	Usage
Labor Agreement ESP - Terminations	GPES_LBR_TERM	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Labor Agreement ESP, Terminations	Define daily salary and severance pay settings for the payroll process to use for terminations of labor agreements.

Setting up Labor Agreement Overrides for Terminations

Access the Labor Agreement ESP - Terminations page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Framework, Organizational, Labor Agreement ESP, Terminations).

Definition of Daily Salaries

Use this group box to override the daily salary calculations that the payroll process retrieves from the corresponding accumulator elements where processing affects the selected labor agreement.

Pre-advised Daily Salary	Select the accumulator element that is the daily salary for preadvised days that the employee or employer does not fulfill. You can create your own accumulator element to suit your requirements, or you can use CLI AC SDIA PREAV, updating it to fit with your requirements.
Severance Daily Salary	Select the accumulator element that is the daily salary for severance pay. You can create your own accumulator element to suit your requirements, or you can use CLI AC SDIA INDM, updating it to fit with your requirements. To override the value set here, you can enter a severance pay amount for the employee on the Manage Termination ESP page.
Job Litigation Daily Salary	Select the accumulator element that is the daily salary for job litigation if the employee appeals termination or the related severance pay amount. You can create your own accumulator element to suit your requirements, or you can use CLI AC SDIA TRAM updating it to fit with your requirements. You can override this value on the Manage Termination ESP page.

Severance Pay

Termination Reason	Select the termination reason for which you want to override the statutory values for days by year and maximum number of periods. When calculating severance pay for indemnification of service, the payroll calculation process uses the values that you select for the labor agreement instead of the default values set by the T.G.S.S. and defined on the Severance Days page.
Days/Year	Enter the days by year that you want the payroll process to use for this labor agreement when calculating the severance pay for the selected termination reason.
Max. Periods (maximum periods)	Enter the maximum number of periods that you want the payroll process to use for this labor agreement when calculating the severance pay for the selected termination reason.

Managing Employee Termination Information

This section provides an overview of the Manage Terminations ESP component and discusses how to enter employee termination data.

Understanding the Manage Terminations ESP Component

Use the Manage Terminations ESP component to manage the additional termination data that affects payroll calculation. This component works in conjunction with the termination processing functionality of the Job Data component. After you perform a termination action on an employee through the Job Data component, you can then use the Manage Terminations ESP component to provide additional termination data, if necessary, for that terminated employee.

See Also

Understanding Terminations

Page Used to Manage Employee Termination Information

Page Name	Definition Name	Navigation	Usage
Manage Terminations ESP	GPES_TERM_MNG	Global Payroll & Absence Mgmt, Termination Processing, Manage Terminations ESP, Manage Terminations ESP	Provide the necessary data to handle conditions for employees who are terminated. To manage severance pay, you need to enter data in this page. In case you have to calculate the statutory severance pay, you must also enter the termination reason in this page.

Entering Employee Termination Data

Access the Manage Terminations ESP page (Global Payroll & Absence Mgmt, Termination Processing, Manage Terminations ESP, Manage Terminations ESP).

Manage Terminations ESP

Termination Date	Displays the last date that the employee is active in the company. The system obtains this value from the employee's job data record.
Termination Reason	Select the reason why the employee was terminated. The number of statutory days that the system uses when it calculates severance pay depends on the termination reason that you select. T.G.S.S. defines and supplies companies with the valid termination reasons and statutory values. Based on your selection, the system displays the appropriate statutory values as defined by law in the Statutory Values column of the Severance Pay group box. You must maintain the statutory values for each termination reason on the Severance Days page. The system also uses your selection when calculating indemnification days to pay the employee.
Seniority Pay Calc Date (seniority pay calculation date)	Displays the initial date that the system considers when calculating the employee's severance pay, indemnification days, and job litigation salary. The system obtains this value from the hire date of the employee's job data record.
Currency Code	Select the currency code for the termination pay.
Comment	Enter any additional comments about the processing of the employee's termination. This field is for information purposes only.

Pre-advised Days Non-Fulfilled

Use this group box when the employee or employer has failed to notify the other within the minimum number of preadvice days.

Nbr Pre-advice Days (number preadvice days)

Enter the number of days by which the employee or employer has failed to meet the legal number of preadvice days that are required at the end of a labor agreement. These nonfulfilled preadvice days increase or reduce the employee's last payment depending on whether the employee or the employer committed the violation, as specified in the Who Pre-advises field. You must enter a positive value.

Who Pre-advises

Select who has to fulfill the preadvice days that you have specified in the Nbr Pre-advice Days field. Values are:

Employee: Select this value if the employee does not fulfill the preadvice period. The payroll process deducts the calculated amount from the employee's last payroll payment by writing the value to the DD PREAVISO deduction element.
Company: Select this value if the employer does not fulfill the preadvice period. The payroll process adds the calculated amount to the employee's last payroll payment by writing the value to the DEV PREAVISO earning element.

Severance Pay

To overwrite the severance pay, select the Overwrite Severance Pay check box. Then use the Severance Pay group box to modify the days of indemnification by year of service or the total amount to pay as indemnification. The values that you enter in these fields overwrite the days or amount that the payroll process determines. Values for days of salary by worked year and maximum number of periods vary depending on the contract type and termination reason.

Overwrite Severance Pay	Select to overwrite the severance pay values that the system calculates during the processing of the employee's payroll during the termination period. If you select this check box, the fields in the Severance Pay group box become available for edit. Use these fields to make the necessary overrides.
Days/Year	Displays the number of indemnification days by year that the payroll process considers when calculating the employee's severance pay amount. The system automatically determines the indemnification days by year and displays the value in the Statutory Values column. The system determines the statutory value based on the number of indemnification days by year that is mandatory by law for the specified termination reason. You define these values by termination reason on the Severance Days page. To override the statutory value that the system determines, enter a value that is greater than the statutory value. When using this override, you must clear the Severance Pay Amount field. Note that the employee is taxed for the severance pay amount that corresponds to the number of days by year that are over the statutory value.
Max. Periods (maximum periods)	Displays the maximum number of periods for indemnification that the payroll process considers when calculating the employee's severance pay amount. The system automatically determines the maximum periods and displays the value in the Statutory Values column. The system determines the statutory value based on the minimum number of periods mandatory by law for the specified termination reason. You define these values by termination reason on the Severance Days page. To override the statutory value that the system determines, enter a value that is greater than the statutory value. When using this override, you must clear the Severance Pay Amount field.
Severance Pay Amount	Use this field to override the amount that the system would automatically calculate by multiplying the Days/Year value by a daily salary. Enter the amount of the employee's severance pay. When using this override, you must clear any override value from the Days/Year and Max. Periods fields. If you instead want to use the severance pay amount that the system calculates, then you must leave this field blank. Note. The employee is taxed for the severance pay amount that is over the statutory value.

Appealed

If the employee disagrees with the employer about termination or severance pay, select the Appealed check box. Then use the Appealed group box to enter the job litigation information related to the dispute.

Appealed	Select this check box if the employee does not agree with the termination reason or severance pay and lodges an appeal against the termination. If you select this check box, the fields in the Appealed group box become available for edit. Enter the necessary appeals data into these fields. Deselect this check box to indicate that the end of the labor relation is effective and that no further action concerning the former employee is required.
Conciliation Date	If applicable, enter the date that the employer and employee reach an agreement in mediation, arbitration, and conciliation (Servicio de Mediación Arbitraje y Conciliación [SMAC]) court. This field is for information purposes.
Sentence Date	If applicable, enter the date on which the judge of the SMAC court dictates a resolution between the employee and the employer. This occurs if the two parties cannot reconcile. Thus you need enter this date only if no conciliation date exists.
Final Date for Job Lit. Salary (final date for job litigation salary)	Enter the final date that the payroll process uses to calculate job litigation salary for the employee. This value can be the conciliation date, the sentence date, or another date upon which the employee and employer reach an agreement. The payroll calculation process considers this date the last date to calculate job litigation salary, using it to determine the number of days in which litigation is involved. Leaving this field blank causes the job litigation salary to be zero and the employee's final payment does not change. If the employer deposits the maximum statutory amount for severance pay, leave this field blank so that this salary will not be paid.
Sentence Job Lit. Salary (sentence job litigation salary)	Enter the amount that the judge imposes as job salary that is due to the employee during the litigation period. For example, if the termination date is January 19 and the final date for job litigation salary is January 24, then the job litigation salary is based on the 20^th through the 24^th, which is the litigation period. This amount overrides the amount that the payroll process calculates for job litigation salary. The payroll process distributes this amount across the months and days of the affected payroll period to properly pay for contributions and taxes. In case of litigation salaries, contributions are reported under L02 payment type in the FAN File. If you enter a value for this field, you must also enter a value for the Final Date for Job Lit. Salary field.
Sentence Severance Pay	Enter the amount that the judge imposes as severance payment. This amount overwrites the severance pay amount that the payroll process calculates. The employer must pay this amount to the employee less the amount already paid upon termination.
Unemployment Benefits	Enter the amount that INEM has paid to the employee during the job litigation period. You can deduce this amount based on the net amount to pay as job litigation salary for the affected period. If you enter a value for this field, you must also enter a value for the Final Date for Job Lit. Salary field.

Terminating Employees in Self-Insurance Companies

If an employee leaves a self-insurance company while on temporary disability (IT or AT/EP), the employee is entitled to continue receiving the economic benefits for the temporary disability until the end of the sickness event. The self-insurance company must therefore continue managing the cost of the temporary disability.

For the payroll process to include terminated employees who were absent on the termination date, you must terminate the employee with an Action/Reason field value of Terminated with Pay (TWP action) or similar action with a payroll status value of Terminated With Pay on the employee's job data record. This sets the Payroll Status field value for the employee to Terminated With Pay and makes the employee eligible for payroll processing. You can determine which actions have this payroll status by viewing the Payroll Status field value for the action definition on the Action page of the Action Reason component.

When the employee's temporary illness ends, you must then update the employee's payroll status to Terminated by selecting the Terminated (TER action) in the Action/Reason field so that the payroll process no longer includes the employee.

Note. Although self-insurance companies must continue to manage the cost of temporary disability for terminated employees who are on temporary disability, these companies do not have to manage the cost of complementary benefits. The payroll process therefore does not calculate complementary benefits earnings for terminated employees.

Processing Termination Pay

This section discusses:

Termination payment calculation.
Terminations and extra period processing.
Vacation balance calculation for terminated employees.
Calculation for nonfulfilled preadvised days.
Severance pay calculation.
Job litigation salary calculation.

Termination Payment Calculation

Termination payments are calculated in the payroll and not as a separate process. The final payment to an employee must include all money due to that employee. This compensation includes the regular salary, extra periods, unused vacation days, and unpaid overtime. The final payment must also consider any outstanding loans and advances, nonfulfilled preadvise days, severance pay, and litigation salary.

To calculate termination pay, the payroll process calculates:

The regular earnings and deductions that are due for the month of termination.
The compensation for the unused paid vacation days.

To do this, the system multiples the daily rate (FNQ FM VAL D VAC) by the number of remaining paid vacation days.
The unpaid extra period earnings.

Employees must be paid for the extra pay periods to which they contributed during the year. To calculate the compensation amount, the system multiplies the daily rate by the number of days accrued until the termination date. The system calculates the daily rate by taking into account the definition of the extra period. If an extra period has been paid in advance, the system generates an extra period earning with a negative value to deduct the amount paid for which the employee is not eligible.
The amount owed for loans and advances, independent of each other.

This amount is automatically deducted from the last payslip.
The amount for nonfulfilled preadvise days, severance pay, and litigation salary.

For PeopleSoft Enterprise Global Payroll for Spain, the payroll process generates termination payments based on the last day that an employee works, which is one day prior to the termination date. The termination date is equal to the effective date of the TER (termination) action on the employee's JOB_DATA record (Job Data component). The system also populates the Contract End Date field with that date, which PeopleSoft Enterprise Global Payroll for Spain uses for processing.

When you enter a TER action, the system can invoke the JOB retro trigger to process the employee's termination pay. To ensure that the payroll process uses the date one day prior to the termination date for termination payment processing, the delivered JOB retro trigger for terminations offsets the termination date by –1 for actions that equal TER. This can be set by the Offset Days field value on the Trigger Definitions – Field Values page.

See Also

Working with Absence Rules

Calculating Extra Periods

Working with Loans and Advances

Terminations and Extra Period Processing

The system processes extra period pay in two ways when a termination occurs in a month that corresponds to an extra period payment:

The system calculates the extra period for the terminated employee during the calculation of the extra period itself.

Later, the regular payroll process calculates termination pay (including loans, advances, vacations, and so on).
The system calculates the amount corresponding to the extra period during regular payroll processing as part of termination processing.

The corresponding amount for extra periods is paid through the LIQ PXTR XXX earnings as part of the regular payroll calculation. You exclude the terminated employee from extra period calculation.

Note. Neither of these ways substitute for the termination payroll. These choices to process termination pertain only to processing extra periods.

To allow for a flexible setup, PeopleSoft Enterprise Global Payroll for Spain provides the CLI VR FNQ P PXTRA variable (pay extra period in termination), with the default value of N (don't execute the extra period). This means that, by default, terminated employees will not be included in the extra period calculation during a payment month that is an extra period. The system also provides an informational message stating that the employee was not included in the extra period calculation because he or she is terminated in such a period. Values for the CLI VR FNQ P PXTRA are Y (pay the extra period payment) and N (don't pay the extra period payment).

In the case that an extra period is paid in advance (extra periods with a payment date earlier than the extra period time frame end date) and in the case of the termination pay calculation, different situations may arise:

The extra period was not paid, so pending extra periods are paid as part of the current period compensation, deducting the absence days affecting the extra period payment during the termination calculation.
The extra period was already paid and the termination date is later than the extra period payment date but earlier than the extra period time frame end date.

The extra period is paid but now those days paid in advance but not worked need to be discounted. The amount to be discounted can be calculated within the current compensation at termination time, or within the compensation paid at such an extra period.

This is designed to be open, setting the value of the variable CLI VR PD VLR PXTR (compensation paid to pay extra period). Values for this variable are PAGADO (paid extra period compensation) and ACTUAL (current period compensation). The default value is PAGADO. Thus, the system calculates this deduction value using the previously paid daily price.
The extra period was already paid, but absence days pending are to be discounted (absence days that occurred after the payment date but before the extra period end date).

Those days will be discounted in the following extra period calculation (if you have it set up like this). Due to the termination, the absence days will be discounted in the termination pay.

Vacation Balance Calculation for Terminated Employees

Beginning in 2003, Social Security requires new treatment for vacations owed to terminated employees. The pending vacation days that the employee has at the time of termination must be distributed as part of the termination pay.

The vacation balance is calculated depending on the type of vacation days agreed upon in the employee's contract data. The most common types of vacation days are natural days and work days. Natural days includes all days in a month, including weekends and holidays. Working days are the days that the employee actually works and don't include weekends and holidays. The vacation balance calculation is different for each vacation days type.

Note. Two other types of vacation days are also used in Spain—weeks or months. Calculation for all vacation types is discussed in this section.

Calculating Pending Vacation Balance for Natural Days Vacation Type

To calculate compensation due to a pending vacation balance for employees with the natural days vacation type, use this formula:

Daily rate × Vacation balance (natural days)

Calculating Pending Vacation Balance for Work Days Vacation Type

To calculate the work days vacation type, you first convert an employee's daily rate to a work days daily rate. Then you can get the amount to be paid for vacation not taken by multiplying the work days daily rate times the vacation balance.

The formula to calculate the work days daily rate is:

Work days rate = Daily rate * 360 / (Annual work hours by Labor Agreement / 8)

Note. This conversion rule is an example that considers the annual number of working days equal to Annual work hours by Labor Agreement / 8, because the most common work schedule is eight hours per day. You can adapt this rule to your specific requirements, modifying the element FNQ FM CONV VAC D.

To calculate compensation due to a pending vacation balance for employees with the work days vacation type, use this formula:

Work days rate * Vacations balance (work days)

Calculating Pending Vacation Balance for Weekly or Monthly Vacation Type

If the employee has a weekly or monthly vacation type, these vacation types must first be converted to natural days. In the case of a weekly vacation type, the system calculates the natural days by multiplying natural days by 7. In the case of a monthly vacation type, the system calculates natural days by multiplying natural days by 30.

Calculating Social Security Contributions for Vacation Pay of Terminated Employees

When the pending vacation days have been calculated, you need to calculate Social Security contributions. For you to do so, the vacation pay has to be distributed to the terminated employee. To distribute the vacation pay, you need to determine whether the number of vacation days to pay is equal to, less than, or greater than the number of days from the day after the termination date to the last period day. For example, if an employee's last day is April 27 and the period end day is April 30, you need to determine whether the number of vacation days to pay is equal to, less than, or greater than three days.

If the number of vacation days to pay is equal to or less than the number of days from the day after the termination date to the last period day, a calculation must be made to get the Social Security base, contributions, and reductions (if applicable) that correspond to those days in the current month. This separate calculation will generate a complementary liquidation in the same month that the regular Social Security liquidation occurs. If this is the case, a new section in the TC2 report needs to be generated.

If the amount of vacation days to pay is greater than the number of days from the day after the termination date to the last period day, you need to go to the following month to continue contributing for those extra pending vacation days (the difference between the total number of pending vacation days and the days after the termination date and last period day). Another calculation must be made that will generate another complementary liquidation.

Example of Vacation Pay Distribution

Here is an example of how vacation pay is distributed for a terminated employee:

Assume that an employee has a vacation type of natural days, with a value of 24 natural days per year. The employee is terminated on April 27 and had taken 2 vacation days since the beginning of the year. The vacations entitlement up to the termination date is calculated in the following way:

Assuming 30 days each are in January, February, and March, and 27 days are in April (up until the employee's termination), you get this result:

(30 + 30 + 30 + 27 / 360) x 24 (natural days) = 7.8 days
Round out 7.8 days = 8 days (vacation entitlement)
8 – 2 (vacation days taken) = 6 (vacation balance)

The vacation days are distributed in the following way:

In the termination month of April, the employee will contribute 27 contributed days to Social Security and 3 vacation days to complete the maximum 30 contributed days for a monthly employee. The pending 3 vacation days will be contributed for May to complete all the pending vacation days.

Generating a Unique TC2 Report for Pending Vacation Balances

Because the distribution of pending vacation pay can affect more than one pay period, you must generate a unique TC2 report to show all the different periods. The code for complementary reports for pending vacations is L13.

Working with Absence Rules

Calculation for Nonfulfilled Preadvised Days

The payroll process uses the following equation to calculate the amount for preadvised days nonfulfilled:

Nonfulfilled Preadvise Amount = Number of nonfulfilled preadvised days * Daily rate for the preadvised salary

This amount is added or deducted from the employee's termination payment as applicable.

Severance Pay Calculation

The system contains all of the logic to determine the severance pay amount based on the legal rules for seniority days to pay per year of service. The payroll process calculates the amount to pay the employee in indemnity through the following equation:

Severance pay = Number of Days * Daily Salary for Indemnity

Where

Number of Days = Minimum value of {(Days by Year * Number of Worked Years) or (Maximum Number of Periods * 30)}

The payroll process determines the number of days to pay by taking the lesser value of either (a) the multiplication of days by year of service by number of worked years, or (b) the maximum number of periods by 30. The resulting values vary depending on contract type and termination reason. Note that the Days by Year value is prorated if the year is not complete.

If the employee is in probation period when he is terminated, the employee does not receive severance pay. The system uses the value in the Probation Period field on the employee's labor agreement to make this determination.

Job Litigation Salary Calculation

The system calculates job litigation salaries as part of the regular payroll process. The payroll process differentiates between whether an employee is in a regular period or period for job litigation salary. When the system makes this differentiation, it determines which elements the payroll process needs to resolve. When calculating job litigation salary, the payroll process calculates payroll for the periods affected by job litigation, considering only the earnings elements that are defined for job litigation salary. To calculate job litigation salary, the payroll process uses the following equation:

Job Litigation Salary = Units * Rate

Where

Units = Number of days to pay for job litigation salary

Rate = Daily gross salary for days of job litigation

Calculation of job litigation salary is the same as normal workdays except for the calculation of daily salary. The system calculates daily salary in one of two ways:

If the employee and employer come to an agreement during litigation, the system calculates the daily salary for job litigation through the following method:
1. When a termination occurs, the system stores the job litigation daily salary in the termination results table through an accumulator. This accumulator determines which earnings contribute to the job litigation salary.
2. When the system calculates job litigation salary, it retrieves the value from the previously mentioned accumulator using a historical rule, and then the system multiples this value by the number of days to pay in the litigation period.
If the judge imposes an amount for job litigation salary, the system divides this amount across the number of days that are considered part of the job litigation period to obtain the daily job litigation salary.

If this is the case, you can overwrite the amount that the system obtains from the relevant accumulator by entering the amount imposed by the judge on the Termination Management ESP page. The sentence amount imposed by the judge overrides any amount the payroll process calculates. The system divides the amount imposed by the sentence across each month affected by the job litigation salary to correctly calculate the social security contributions and taxations.

Job litigation salary earnings are applicable to both social security contributions and IRPF taxation. Employers must therefore report litigation salary to social security. When you run the payroll process for the employee during the month of the job litigation sentence, the system calculates all job litigation salary as retroactive pay (if the salary corresponds to past periods) for all payroll periods that are part of the job litigation period, including prorated extra periods, and applies the related social security contributions and taxations to each affected month. Social security contributions corresponding to litigation salaries are reported under a specific code (L02) in the TC2 report.

If the judge determines that the employee was wrongfully terminated and that the employer must rehire the employee, the readmitted employee must return the payment amount received for severance pay to the company, and must return the unemployment benefits received for the period affected by job litigation directly to the national employment institute (Instituto Nacional de Empleo [INEM]). The process considers the readmitted employee's salary for the period affected by job litigation as normal worked days.

Setting Up and Running Termination Reports

This section provides overviews of both the Termination Letters and Company Certificate reports and discusses how to:

Map INEM contract types.
Map INEM action reasons.
Map national occupation codes (CNO).
Run the Company Certificate report.
Create the Termination Letters report.

Understanding the Termination Letter

The termination letter establishes an employee's termination conditions, indicating the end date of the contractual relationship (the sign date) and the total termination compensation (including the respective monthly compensation). It must be signed by the employee to indicate that he or she agrees to the termination conditions.

The termination letter can be printed only after the termination payment has been calculated (so that net to pay and the different components and amounts are included). The termination letter can be presented to the employee with the regular payslip. After you issue the termination payment, you can print the regular payslip and the termination letter with the termination compensation included in both.

Even though the organization issues the termination letter, it is written in the employee's voice and includes the following information:

Employee name.
Company name.
Hire and end date.
Employee professional category.
Total termination compensation, including social security contributions and tax deductions.

Note. You must define the payslip template with the elements that you want to include in the printed payslip
Employee signature.

Understanding the Company Certificate

There are five different variations of the Company Certificate report:

INEM Company Certificate report.
Company Certificate report for temporary disability.
Company Certificate report for maternity or paternity.
Company Certificate report for risk during pregnancy or lactancy.
Company Certificate report on demand (INSS).

INEM Company Certificate Report

The INEM (Instituto Nacional del Empleo) Company Certificate report can be issued to an employee by an organization at the end of the contractual relationship. INEM uses the company certificate report to calculate employee unemployment benefits based on contributions for the last 180 days, as detailed in the certificate. Companies must give this report to an employee when the employee is terminated so that the employee can acquire an unemployment salary. The basic information that this report provides consists of the contributions that correspond to the last 180 days prior to the termination and the contributions that are paid for vacations at termination.

The report needs to contain the termination reason, the reason description, and an official code provided by the INEM code table. You need to ensure that action reasons table contains the right codes to be used during INEM Company Certificate reporting.

The INEM Company Certificate report contains the contract frames (distribución de las jornadas de trabajo en contratos a tiempo parcial) for part-time employees. In addition, the report contains a box for job litigation salary information. This cell includes:

The start date for the job litigation salary, which is the date of the employee's termination.
The end date of the job litigation salary which, depending on litigation results, is the conciliation date, the sentence date, or the final date for job litigation salary.
The number of days considered for job litigation salary.

Within the contribution period of the last 180 days, if job litigation salaries exist, then the system includes this data in the INEM Company Certificate report. INEM requires this information to be within the report.

Company Certificate Report for Temporary Disability

The purpose of the economic benefit for temporary disability is to cover the loss of earnings that occurs when the worker, due to illness or accident, is temporary unable to work and requires Social Security medical assistance. Among the necessary documents for processing the benefit is the Company Certificate Report for temporary disability.

In addition to the company, employee, and termination data presented on the basic report, the report for temporary disability also contains:

Temporary disability data including the last confirmation note (último parte de confirmación abonado por la empresa).
Contributions in the month prior to the temporary disability, depending on the type of employment:
- Part-time employees: contribution bases for the 3 months prior to the temporary disability.
- Full-time employees: contribution bases for the month prior to the temporary disability.

Note. When you generate the Company Certificate report for temporary disability for an active employee, it does not display termination data.

Company Certificate Report for Maternity or Paternity

Economic benefits for maternity or paternity are subsidies granted to workers, regardless of gender, who take advantage of their legally established periods of leave in the case of maternity, paternity, adoption, or fostering. Among the necessary documents for processing the benefit is the Company Certificate Report for maternity or paternity.

In addition to the company, and employee data presented on the basic report, the report for maternity or paternity also lists the contributions made prior to the onset of maternity or paternity, depending on the type of employment:

Part-time employees: contribution bases for the 12 months prior to the onset of maternity or paternity.
Full-time employees: contribution bases for the month prior to the onset of maternity or paternity.

Company Certificate Report for Risk During Pregnancy or Lactancy

The risk during pregnancy or lactancy economic benefit covers the loss of income that occurs when:

A worker as her work contract suspended because of a risk during pregnancy or lactancy.
The risk requires that she be given an alternative job that is more compatible with her situation.
It is technically or objectively impossible to provide a suitable alternative job.

Among the necessary documents for processing the benefit is the Company Certificate Report for risk during pregnancy or lactancy.

In addition to the company, and employee data presented on the basic report, the report for risk during pregnancy or lactancy also lists the contributions made prior to the risk, depending on the type of employment:

Part-time employees: contribution bases for the 3 months prior to the risk for pregnancy or lactancy.
Full-time employees: contribution bases for the month prior to the risk for pregnancy or lactancy.

Company Certificate Report (INSS)

Active (not terminated) employees can request an INSS (Instituto Nacional de la Seguridad Social) Company Certificate report on demand with information relative to their contributions. In addition to company and employee data, this report displays the month, year, number of contributed days, contribution group and Social Security bases for the last six months worked.

Pages Used to Set Up and Run Termination Reports

Page Name	Definition Name	Navigation	Usage
INEM Contract Types ESP (Instituto Nacional del Empleo contract types ESP)	GPES_CNT_TYP_INEM	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Terminations, INEM Contract Types ESP, INEM Contract Types ESP	Map INEM contract types.
INEM Action Reasons ESP (Instituto Nacional del Empleo action reasons ESP)	GPES_ACTN_RSN_INEM	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Terminations, INEM Action Reasons ESP, INEM Action Reasons ESP	Map INEM action reasons.
Job Code CNO ESP (job code Código Nacional de la Ocupación ESP)	GPES_JOBCODE_CNO	Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Terminations, Job Code CNO ESP, Job Code CNO ESP	Map national occupation codes.
Company Certificate Report ESP	GPES_RC_FNQ1	Global Payroll & Absence Mgmt, Termination Processing, Company Certificate Report ESP, Company Certificate Report ESP	Run the Company Certificate (GPESFNQ1) report. This report shows the monthly social security contributions for the last 180 days. This report is sent to the government unemployment office to calculate the unemployment benefit.
Create Termination Letters	GPES_RC_FNQ2	Global Payroll & Absence Mgmt, Termination Processing, Create Termination Letters ESP, Create Termination Letters ESP	Run the Create Termination Letters report (GPESFNQ2) that generates a termination letter for the employees listed.

Mapping INEM Contract Types

Access the INEM Contract Types ESP page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Terminations, INEM Contract Types ESP, INEM Contract Types ESP).

Use this page to map INEM contract types to PeopleSoft HRMS contract types.

Set ID	Displays the set ID to which you are mapping the INEM contract type.
Contract Type	Displays the PeopleSoft HRMS contract type to which you are mapping the INEM contract type.
INEM Contract Type	Select the INEM contract type you want to map to the selected PeopleSoft HRMS contract type. Valid values are: Temporary, Unlimited, and Unlimited Discontinued.

Mapping INEM Action Reasons

Access the INEM Action Reasons ESP page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Terminations, INEM Action Reasons ESP, INEM Action Reasons ESP).

Use this page to map INEM action reasons to PeopleSoft HRMS reason codes.

Action	Displays the PeopleSoft HRMS action to which you are mapping the INEM action reason.
Reason Code	Displays the PeopleSoft HRMS reason code to which you are mapping the INEM action reason.
INEM Action/Reason	Select the INEM action reason code you want to map to the selected PeopleSoft HRMS reason code.
Description	Enter the official description for the selected action reason code that is recognized by INEM office.

Mapping National Occupation Codes

Access the Job Code CNO ESP page (Set Up HRMS, Product Related, Global Payroll & Absence Mgmt, Terminations, Job Code CNO ESP, Job Code CNO ESP).

Use this page to map a national occupation code (CNO) to a PeopleSoft HRMS job code.

Set ID	Displays the set ID to which you are mapping the CNO.
Job Code	Displays the PeopleSoft HRMS job code to which you are mapping the CNO.
National Occupation Code	Enter the national occupation code you want to map to the selected PeopleSoft HRMS job code.

Running the Company Certificate Report

Access the Company Certificate Report ESP page (Global Payroll & Absence Mgmt, Termination Processing, Company Certificate Report ESP, Company Certificate Report ESP).

Company Representative

Responsible ID	Select the employee who is responsible for signing the document on behalf of the company.
Employee Record Number	Select the employee record number for the responsible ID.
Job Code	The system displays the job code that corresponds to the responsible ID.

Filter

Terminated employees	Select to generate the report for terminated employees. When you select this option, the Period Between fields become available.
Period Between	Enter a date range. Only payees terminated within this date range are available to select for report generation.
Active employees	Select to generate the report for active employees. When you select this option, the As Of Date field becomes available.
As Of Date	Enter a date. Only payees who are active as of the entered date are available to select for report generation.
Print Mult. Company Contracts (print multiple company contracts)	Select to include in the report contributions associated with all company contracts for each selected employee. If you deselect this check box, the report includes contributions associated with only the most recent company contract for each selected employee.

Note. You can use this group box to filter for either terminated or active employees, not both.

Automatic Search

The fields in this group box enable to you search for employees that meet certain criteria. The employees that the search retrieves depends on the selections you made in the Filter group box. The following table lists the possible search results:

Filter Selection	Automatic Search Selection	Search Results
Terminated employees	In Sickness	Retrieves terminated employees in the entered period and with IT or AT/EP absence events occurring at the time of termination.
Terminated employees	Maternity	Retrieves terminated employees in the entered period and with a maternity or paternity absence event occurring at the time of termination.
Terminated employees	In Pregnancy Risk	Retrieves terminated employees in the entered period and with an in pregnancy or lactancy risk absence event occurring at the time of termination.
Terminated employees	Not in Absence	Retrieves terminated employees in the entered period who were healthy at the time of termination.
Active employees	In Sickness	Retrieves active employees who had an IT or AT/EP absence event occurring on the As Of Date.
Active employees	Maternity	Retrieves active employees who had a maternity or paternity absence event occurring on the As Of Date.
Active employees	In Pregnancy Risk	Retrieves active employees who had an in pregnancy or lactancy risk absence event occurring on the As Of Date.
Active employees	Not in Absence	Retrieves active employees who were healthy on the As of Date.

Search

Click to search employees using the specified criteria.

Employee List

The system displays the employees that match the search criteria in this group box, assigning by default the report that corresponds to their situations. This page, however, provides some flexibility when selecting the report to be printed for each employee. If you want to run a different report than the one that the system automatically selects, you can add a new row for the employee and select the desired report. The available options are:

The reports that match the status of the employee
The Company Certificate report (INEM).
The Company Certificate report on demand (INSS).

Generate Report	Select next to the employees for which you want to run the report.
Employee ID	Enter the ID for the employee for which you want to run the report. The system displays the employee name. Note. The system allows you to enter the ID of employees who match the criteria you specify in the Filter group box. If you use the Automatic Search group box to search for employees, the system populates this field automatically, and you cannot edit it.
Employment Record Number	Select the employee record number for which you want to run the report. If you use the Automatic Search group box to search for employees, the system populates this field automatically, and you cannot edit it.
Termination Date	This field appears only if you select the Terminated employees option in the Filter group box. The system populates this field automatically with the termination date for the selected employee, and you cannot edit it.
As Of Date	Enter the date on which you want the system to base the report results. This field is available only if you select the Active employees option in the Filter group box. If you use the Automatic Search group box to search for employees, the system populates this field automatically, and you cannot edit it.
Reason	Enter the reason for the report generation. This reason determines the type of report that the system generates. If you use the Automatic Search group box to search for employees, the system populates this field automatically, and you cannot edit it. Values are: AT/EP (Accidentes de Trabajo y Enfermedades Professionales): Results in the generation of the Company Certificate report for temporary disability. Note. This report includes termination information for terminated payees. INEM (Instituto Nacional del Empleo): Results in the generation of the INEM Company Certificate report. INSS (Instituto Nacional de la Seguridad Social): Results in the generation of the INSS Company Certificate report. IT (Incapacidad Temporal): Results in the generation of the Company Certificate report for temporary disability. Note. This report includes termination information for terminated payees. In Maternity: Results in the generation of the Company Certificate report for maternity or paternity. Note. This report includes termination information for terminated payees. In Pregnancy Risk: Results in the generation of the Company Certificate report for risk during pregnancy or lactancy.

The payroll process calculates the pending vacation days for terminated payees as part of the termination calculation. The Company Certificate report process uses the information about regular contributions and pending vacation days at termination. It inserts the pending vacation days and the Social Security bases such as the Common Contingencies base and the Professional Contingencies base for those pending vacation days into the Company Certificate report.

Creating the Termination Letters Report

Access the Create Termination Letters page (Global Payroll & Absence Mgmt, Termination Processing, Create Termination Letters ESP, Create Termination Letters ESP).

From Date and To Date

Enter a date range within which you want to search for terminated payees.

Search

Click to search for payees that were terminated within the date range you specified.

Generate Report

Select next to the payees for which you want to generate termination letters.

Empl ID (employee ID)

Enter the ID of the employee for whom a termination letter will be created.

Select All	Click to select the Generate Report check box next to all payees listed in the Terminated Employees group box.
Deselect All	Click to deselect the Generate Report check box next to all payees listed in the Terminated Employees group box.

Viewing Delivered Termination Elements

This section discusses:

Delivered termination earnings.
Delivered termination deductions.

Delivered Termination Earnings

Extra period termination earnings that are considered to be part of the termination process must be specified in the Termination Earning field on the Extra Period Definition page.

An employee who is entitled to extra periods in July and December, for example, would be paid the earnings LIQ PXTR JUL and LIQ PXTR DIC.

Note. PeopleSoft Enterprise Global Payroll for Spain delivers sample earnings that are defined as PeopleSoft Delivered/Not Maintained. If you want to create your own termination elements, first define them on the Earnings page and then list them on the Extra Period Definition page.

See Defining Extra Period Data.

Example of Termination Earnings Calculation

Assume that an employee has a total gross annual compensation of 50.000 EUR. The labor agreement specifies that the employee receive two extra period payments: one paid on June 15 and the other on December 15. Your company has a monthly payroll, so in addition to the 12 regular payments, two other payments exist, making a total of 14 payments in a year. To get the gross compensation for the monthly payment, you make this calculation:

50.000/14 = 3571.43 EUR

Assume that the employee joined the company on March 1 and that the time frame for the June extra period is six months (from January to June). The extra period payment date is June 15. He will earn 4/6 times the gross compensation of the payment because he has been working for four months.

Remember that the payment date does not alter the result, so the extra period calculation takes into consideration the days worked up to June 30, regardless of the payment date. For example, if the payment date is June 15 and the time frame end date is June 30, the system calculates the days worked from May 15 to June 30.

The result for a monthly employee who joined the company in mid-May (using a month with 31 days) is:

((17+30) / 180) * 3571.43 = 0.261111 * 3571.43 = 932.54 EUR

The result for a daily employee is:

((17+30) / 181) * 3571.43 = 0.259669 * 3571.43 = 927.39 EUR

Now consider the example of an employee hired March 1 and terminated May 31.

If the employee is paid monthly, the result is:

((30 + 30 + 30) / 180) * 3571.43 = 0.5 * 3571.43 = 1785.72 EUR

If the employee is paid daily, the result is:

((31 + 30 + 31) / 181) * 3571.43 = 0.508287 * 3571.43 = 1815.31 EUR

This amount is paid through the earning element for the June extra period that is specified in the Termination Earnings field on the Extra Period Definition page.

Delivered Termination Earnings

This table lists the delivered termination earnings:

Earning	Description
DEV PREAVISO	Preadvised earning. This is the amount to add to the employee's last payment for preadvice days not fulfilled by the employer. Define preadvice days not fulfilled for an employee termination on the Termination Management ESP page.
INDMNCN	Termination indemnity. This is an existing element that stores the severance pay that is paid to a terminated employee. The calculation rule for this earning element has been modified from Amount to Unit * Rate, as defined on the Earnings - Calculation page.
INDMNCN SENT	Sentence indemnity. This is the amount of severance pay that the judge imposes during job litigation, as defined on the Manage Terminations ESP page.
LIQ PXTR DIC	December extra period termination. This is used for December extra period termination payment. The execution of this earning is conditioned to generation control FNQ GC LIQ DEV.
LIQ PXTR JUN	July extra period termination. This is used for July extra period termination payment. The execution of this earning is conditioned to generation control FNQ GC LIQ DEV.
LIQ PXTR SEP	September extra period termination. This is used for September extra period termination payment. The execution of this earning is conditioned to generation control FNQ GC LIQ DEV.
SAL TRAMIT	The amount calculated as job litigation salary.
VAC NDSFRTDS	Terminate vacation days paid at termination. This is used to store the amount corresponding to vacation days that are paid at termination.

See Also

Defining Extra Period Data

Defining Extra Period Earnings

Delivered Termination Deductions

This table lists the delivered termination deductions:

Deduction	Description
DD PREAVISO	Preadvised deduction. This is the amount to subtract from the employee's last payment for preadvice days not fulfilled by the employee. Define preadvice days not fulfilled for an employee termination on the Termination Management ESP page.
DD DESEMPLEO	Unemployment benefits. This is the amount subtracted from an employee's job litigation salary for unemployment benefits accrued during the litigation period of an appealed termination.
DTO PXTRA AUS	Absence on extra period already paid. This deduction is generated in case an advance extra period is paid, and then an absence occurs after the extra period has already been paid.
LIQ ADLNTO	Advance termination. This is used for advance termination payment. Customer field 5 contains label 'LIQ ADLNTO' (See FNQ FM AYP VAL).
LIQ PRSTMO	Loan termination. This is used for loan repayments (Capital part) termination payment. Customer field 5 contains label 'LIQ PRSTMO' (See FNQ FM AYP VAL).
LIQ V SS CC	Vacation treatment for social security common contingency. This is used to calculate an employee's common contingencies contributions due to vacations not taken at the time of termination.
LIQ V SS DS	Vacation treatment for social security unemployment. This is used to calculate an employee's unemployment contributions due to vacations not taken at the time of termination
LIQ V SS FP	Vacation treatment for social security professional treatment. This is used to calculate an employee's professional training contributions due to vacations not taken at the time of termination.

Note. The PeopleSoft system delivers a query that you can run to view the names of all delivered elements designed for Spain. Instructions for running the query are provided in the PeopleSoft Enterprise Global Payroll 9.1 PeopleBook.

Viewing Delivered Social Security Deductions

Termination Reason	Select the termination reason for which you want to define statutory values for severance days and periods. The payroll calculation process uses these values to calculate severance pay for indemnification of service. T.G.S.S. defines and supplies the valid termination reasons and statutory values. A delivered translate table stores the valid termination reasons.
Effective Date	Enter the date on which the statutory severance day and period values become effective for the corresponding termination reason.
Days/Year	Enter the maximum days per year to pay for indemnification of service when calculating the severance pay for the corresponding termination reason.
Max. Periods(maximum periods)	Enter the maximum number of periods to pay for the corresponding termination reason.

From Date and To Date	Enter a date range within which you want to search for terminated payees.
Search	Click to search for payees that were terminated within the date range you specified.
Generate Report	Select next to the payees for which you want to generate termination letters.
Empl ID (employee ID)	Enter the ID of the employee for whom a termination letter will be created.