Entering Employee Contract Pay Settings

The contract effective date must be within the contract payment term (between the Payment Begin Date and the Payment End Date).

Select a contract type to populate the contract with default settings from the selected contract type. Using a contract type helps you enter data quickly and consistently, but it does not force you to accept any of the associated settings; you can override values that come from the contract type.

Selecting a contract type overrides existing data on the Contract Pay page.

Choose the payment term for the contract. Contract pay is always levelled over the payment term you select. For example, consider a contract for 36,000 USD with a contract term of 9 months. If the payment frequency is monthly and the payment term is the same as the contract, you pay 4,000 USD per month for nine months. If you choose a 12 month payment term, you pay 3,000 USD per month for 12 months.

Select from the these payment term options:

• Pay Over 12 Months: Pay the contract amount over 12 months, starting on or before the contract begin date. Because the maximum contract term is 12 months, the payment term cannot extend beyond the contract end date.

• Pay Over Contract: Pay the contract amount over the length of the contract, as defined in the Contract Begin Date and Contract End Date fields.

• Pay Over X Months: Pay the contract amount over a period of time longer than the contract term, but no more than one year.

• Pay with Lump Sum: Pay the entire contract amount in one lump sum.

Select a monthly payment frequency to be used when calculating the monthly pay rate for the contract. Typically, you select the delivered frequency M (monthly), but you can choose any frequency definition with whose frequency type is Monthly.

Select a method for calculating worked earnings. This information is necessary so that you can properly calculate final pay if the person does not complete the contract.

These are the available calculation methods:

• Prorate: Worked earnings are prorated across pay periods from the contract start date to the contract end date.

  For example, a contract gives an employee 36,000 USD over a nine month contract term and a 12 month payment term. Although the employee is paid 3,000 USD per month during the payment term, the employee's worked earnings are 4,000 USD per month during the contract term.

• Actual: Worked earnings are based on a daily rate that the system calculates by dividing the contract amount by the number of work days during the contract term.

  For example, a contract gives an employee 34,000 USD over a 9 month contract term and a 9 month payment term that begin the same day. The contract term includes 170 work days, resulting in a daily rate of 200 USD. Even though the contract term and the payment term are the same, the fact that there are a different number of work days each month means that at any point in time before the final payment, the worked earnings might be either more or less than actual pay.

See Understanding Contract Earnings, Contract Pay Calculation Examples.

If you require hours data for other processes such as leave accruals, enter the number of hours per pay period. When the system loads contract pay to the paysheet, it loads the hours into the payline.

Enter the number of hours worked per day. The system uses this to calculate an hourly pay rate for the contract.

If you enter pay period hours, use the Assign Hours To field to indicate how to assign hours to contract earnings codes:

• Select Not Applicable if you do not distribute hours to contract earnings codes.

• Select Contract Earnings Only to assign all hours to the contract regular earnings code.

• Select All Earnings (Contract+PNE+ENP) to assign the full number of hours to all three types of contract earnings codes.

The maximum length for a contract is 12 months.

The payment term must begin on or before the contract begin date and must end on or after the contract end date.

Follow these guidelines for defining the begin and end dates for the different types of payment terms:

• Pay Over 12 Months: Enter the payment begin date; the system calculates the end date and makes it read-only.

• Pay Over Contract: The system enters the contract dates in both payment date fields and makes them read-only.

• Pay Over X Months: Enter both a payment begin date and a payment end date.

• Pay with Lump Sum: Enter the lump sum payment date in the Payment Begin Date field. The system hides the Payment End Date field.

Enter the date the employee actually starts work. The default is the contract begin date. The usual reason for changing this default is if the employee starts working later than originally contracted.

Enter the date the employee terminates the contract, if different from the contract end date. The usual reason for entering a date here is if the employee stops working earlier than originally contracted.

To set up a balloon payment, enter the date of the payment here. All payments after the last payment date are rolled up and paid on the last payment date.

A common use of this option is if you pay contract employees as though they were paid over 12 months, except that the summer pay is paid as a balloon payment at the end of the school year.

Select the school schedule to use when calculating actual work days. The schedule lists the school break periods; break days are not counted as work days.

Select this check box to exclude holidays from the count of actual work days in the contract term (that is, if holidays are considered unpaid leave rather than paid leave).

Displays the number of work days in the contract term. The system calculates work days based on the employee's work schedule, the school schedule, and the holiday schedule. Holidays counts as work days unless the Exclude Holiday Schedule check box is selected.

If you enter pay period hours so that hours can be loaded to paysheets, you can select this check box to prorate the pay period hours during partial periods.

If you allocate hours to contract earnings, partial periods occur when the contract term begins or ends in the middle of the pay period.

If you allocate hours to all earnings (contract regular, paid not earned, and earned no paid), partial periods occur when the payment term begins or ends in the middle of the pay period.

The proration calculation depends on the calculation method you are using:

• If the calculation method is Prorate, the system prorates the pay period hours based on the number of contract days in the pay period.

• If the calculation method is Actual, the number of hours for the partial period is the number of daily hours multiplied by the number of work days in the pay period.

Select to allow the Contracts Renewal process to renew this contract.

Enter the maximum number of automatic renewals for the contract. If the contract can be renewed indefinitely, enter 99.

The earnings are annualized over 12 months, regardless of the length of the payment term.

The earnings are annualized over the number of pay periods in the payment term.

The system uses the annualization factor that you enter.

Select this check box to use the contract regular earnings funding source for the Paid Not Earned and Earned Not Paid earnings as well. When you select this check box, the system hides the other page elements in this group box.

If the Same as Contract Regular check box is not selected, these fields show the Combo Codes that you use for Paid Not Earned and Earned Not Paid earnings.

See Editing ChartField Combinations in HCM Transactions.

Select to access the ChartField Detail page, where you select Combo Codes for Paid Not Earned and Earned Not Paid earnings.