(E&G) Generating Lump-Sum Retroactive Payments for Contractual Employees

At times, you might change an employee's contract retroactively. For example, suppose that you have an employee working under a nine-month contract that is paid over a 12-month period. During the contractual period, the employee's compensation rate is increased, and the increase is effective on the first day of the contract. In such instances, you must pay the employee retroactive earnings. With the Lump-Sum Retroactive Payment feature, you can pay the employee's retroactive earnings as a lump sum.

To use this feature, indicate that you want a lump-sum retroactive payment for contract pay by selecting the Lump Sum Retro Payment check box on the Contract Change Proration Option page that appears after you enter a new contract amount in the employee's record. Then, the Contract Additional Pay SQR Report process (CNTPAY01) calculates all the lump-sum retroactive payment data. To deliver the payment in a separate check, select the Separate Check check box on the Contract Additional Pay - Run Parameters page.

The Contract Additional Pay process completes the following tasks:

• Determines what you already paid as:

  • Paid, but not earned (PNE).

  • Earned, but not paid (ENP).

  • Contract regular earnings (CRG).

• Determines what you should have paid as PNE, ENP, and CRG, had the increase (or decrease) been in effect.

• Generates lump-sum entries for each earnings code.

• Processes the lump-sum entries from an on or off-cycle payroll.

• Automatically adjusts the goal balances to reflect the increased amount.

  The goal balance of the contract additional pay represents the actual balance of the contract pay. For example, if an employee has 10,000 CAD of contract pay and 500 CAD of lump-sum retroactive pay, contract additional pay with sequence number of 1 represents the employee's normal contract pay, and additional pay with sequence numbers greater than 1 represents the employee's lump-sum retroactive payment. The final goal balance of the sequence 1 additional pay should be 10,000 CAD, and the goal balance of the lump-sump retroactive additional pay should be 500 CAD.

When producing a lump-sum retroactive payment for contract pay, the system:

• Processes the retroactive compensation.

• Provides a lump-sum payment of the retroactive amount to the employee.

• Tracks the effective date of the retroactive changes to the compensation amount of the contract.

• Maintains the integrity of the contract.

  This means that the contract begin and end dates, and the payment begin and end dates, do not change to accommodate the retroactive changes.

• Maintains the integrity of the assigned grade and step of the employee.

• Maintains the integrity of the true value of the contract.

The lump-sum retroactive payment for contract pay is optional. However, this capability enables you to deliver earnings to the employees in a manner that best fits your business practices and your employees' needs.

(E&G) Use the Contract Change Prorate Options page (JOB_CNT_CHG_SEC) to select contract proration options and enable the system to process a lump-sum payment of retroactive earnings to the employee.

Image: Contract Change Prorate Options page

This example illustrates the fields and controls on the Contract Change Prorate Options page.

Before running the process to calculate and report on lump-sum retroactive payments for contractual employees, set up the system at the employee level.

Select the Lump Sum Retro Payment check box on the Compensation: Contract Change Proration Option page.

(E&G) Use the Create Contract Projected Pay page (RUNCTL_PAYINIT3) to process additional pay for contractual employees.

Image: Create Contract Projected Pay page

This example illustrates the fields and controls on the Create Contract Projected Pay page.

This page executes the CNTPAY01 SQR. The Contract Projected Payment process produces an exception report. The exception report lists corrections that might be required to process contract additional pay.

You can use the Pay Run group box or the Pay Calendar group box, but not both. Entering a pay run ID identifies the pay calendars to process. Each pay calendar identifies a company, pay group, and the start and end dates of the pay period. Or, enter the company, pay group, and pay end date to identify the pay calendar to use.