This chapter contains these topics:
Section 4.2, "Scenario 1: Pay Rate Source Equals the Pay Rate Table,"
Section 4.3, "Scenario 2: Pay Rate Source Equals the Pay Grade Step Table,"
Depending on the nature of your workforce and the planning and budgeting requirements of your organization, you can use several methods to track the amount of money an employee earns each pay period and each year. Three components in the system determine this amount:
Annual salary
Hourly rate
Standard hours per year
An employee's annual salary is the amount of money that the employee earns in one year. An hourly rate is the amount of money that an employee earns in one hour. Standard hours per year is the number of hours per year that an employee works. Therefore:
Annual salary divided by standard hours per year equals hourly rate
Hourly rate multiplied by standard hours per year equals annual salary
Employees who have multiple jobs within your organization can have a different annual salary, hourly rate, and standard hours per year for each job.
To save you time and reduce keying errors, you can set up pay information in the following tables
You can use either of these tables as the default source of pay rate information for employees. You can specify a default pay rate source in the human resources constants.
The type of information that you must enter for each employee, as well as the way in which the system calculates salaries or hourly rates, varies depending on the pay rate source that you specify.
The pay rate sources that you can choose from include:
Pay Rate table
Pay Grade Step table
None (no default)
The following scenarios describe, for each pay rate source, the interaction between annual salary, hourly rate, and standard hour per year.
When you need to associate pay rates with a specific group of employees, such as the members of a specific union, you can use the Pay Rate table as the default pay rate source. On the Pay Rate table, you set up hourly rates for a group of job types and steps and associate those job types and steps with a union code and effective dates.
To use the information in the Pay Rate table when you add an employee record, you enter a job type, job step, and union code, and leave the salary and hourly rate blank. The job type, job step, and union code must correspond to an entry in the Pay Rate table.
The system automatically enters the appropriate salary and rate information from the Pay Rate table. The system also supplies a default value for standard hours per year,. You can override these default values for an employee, if necessary. Overriding the standard hours per year does not affect the employee's hourly rate.
The following table describes what happens when you enter or change information that affects an employee's earnings:
| Topic | Description |
|---|---|
| Overriding the default pay rate source | When the Pay Rate table is the default pay rate source, you can do one of the following to avoid using this default for an employee:
You must enter either a salary or an hourly rate for the employee. See Section 4.4, "Scenario 3: No Pay Rate Source" for information about salary and hourly rate calculations for such employees. |
To ensure that all of the employees working in a job receive the same rate of pay, and to establish progression within a pay grade, you can use the Pay Grade Step table as the pay rate source. On the Pay Grade Step table, you set up a pay rate for each step within a pay grade.
To use the Pay Grade Step table when you add an employee record, you enter a pay grade and pay step and leave the salary, hourly rate, and standard hours per year blank. The system automatically enters the appropriate salary, rate, and hours per year from the Pay Grade Step table. (For an hourly employee, salary appears only on the Employee Multiple Job form.)
To use the Pay Grade Step table when you add an employee record, you enter a pay grade and pay step and leave the salary, hourly rate, and standard hours per year blank. The system automatically enters the appropriate salary, rate, and hours per year from the Pay Grade Step table.
The following table describes what happens when you enter or change information that affects an employee's earnings:
| Topic | Description |
|---|---|
| Overriding the default pay rate source | When the Pay Grade Step table is the default pay rate source, you can avoid using this default for an employee by leaving the pay grade step blank. You must enter either a salary or an hourly rate for the employee.
See Section 4.4, "Scenario 3: No Pay Rate Source" for information about salary and hourly rate calculations for such employees. |
If your organization consists of employees whose salaries and hourly rates are based on a pay range, rather than specific amounts for a job or pay grade step, you can choose to use no default pay rate source.
When you add employee information, you must enter either a salary or an hourly rate for each employee. The system provides a default value for standard hours per year, which you can override, if necessary. When you enter a salary for an employee, the system automatically calculates an hourly rate, based on the salary and standard hours per year. Conversely, when you enter an hourly rate, the system calculates salary. (For hourly employees, salary appears only on the Employee Multiple Job form.)
When you add employee information, you must enter either a salary or an hourly rate for each employee. The system provides a default value for standard hours per year, which you can override, if necessary. When you enter a salary for an employee, the system automatically calculates an hourly rate, based on the salary and standard hours per year. Conversely, when you enter an hourly rate, the system calculates salary.
The following table describes what happens when you enter or change information that affects a salaried employee's earnings:
The following table describes what happens when you enter or change information that affects an hourly employee's earnings: