Running the Eligibility and Calculation Processes

The Extract Eligible Employees process is the first process that you run. The purpose of this process is to determine who is eligible for a share of the funding, and import for each eligible employee gross salary and a count of days worked.

For each agreement that you specify on the run control page, the process compiles a list of employees in the company and establishments specified in the agreement.

For each employee, the process:

• Determines whether the employee is eligible as follows:

  • If you don't specify a minimum seniority on the Computation page (Define Agreement component), the system verifies that the employee worked for the company or establishment for at least one day during the reference period.

  • Calculates the employee's length of service, if you defined a minimum seniority for the agreement, using the employee's contract begin and end dates.

    For employees with multiple contracts, the system calculates the total duration of all contracts during the reference period, and for the 12 months prior to the start of the reference period. Employees who don't meet the seniority criteria are not eligible for a share of the funds.

    Note: If an employee is transferred to a different company during the reference period, and keeps the same contract number, the process adds the employee to the message log. You must check the list of transferred employees to determine whether they are eligible for profit sharing.

• Imports eligible employees' gross pay and the number of days worked during the reference period.

  These amounts are used later by the Distribute Global Funds process to calculate the employee's fund. Payroll data is imported from accumulators defined in Global Payroll for France or from a record populated with employee payroll information.

  You define the location of payroll data when you set up the reference periods for the agreement. The process checks employees' job data to determine whether to import data from Global Payroll for France or the external record.

• Calculates the employee's proration factor based on the number of days worked.

  One of the distribution methods for dividing global funds between employees is based on the number of days that the employee worked during the reference period. The process calculates this proration factor by dividing the number of days worked by the total days, including weekend days, for the reference period (reference period end date through reference period begin date). You define the distribution methods on the Computation page.

Once this process is complete, the compensation administrator can review employees' gross salaries and proration factor, using the Member Entitlements page.

The Compute Global Fund process is the second process to run, and you must run it after the Extract Eligible Employees process. The purpose of the Compute Global Fund process is to calculate the global fund amounts for the agreements that you specify on the run control page. Once this process is completed, the compensation administrator reviews the calculated amounts using the Member Entitlements pages.

The global fund is the total amount that is available for distribution between eligible employees. It is based on your organization's accounting information. To calculate the global fund, the process uses these formulas specified on the Computation page (Define Agreement component):

• Funding formula.

• Global fund limit formula.

  This formula defines the global fund limit. For worker's participation agreements, PeopleSoft delivers the statutory formula, KF20PCTMS, that checks whether the global fund is more than 20 percent of the total payroll. If the result of the funding formula exceeds this limit, the process sets the global fund amount to this limit and issues a warning message.

  For profit-sharing agreements, the process compares the global fund with the result of these formulas, if you don't specify the legal formula LEGAL_RSP in the Funding Formula field:

  • The global fund limit formula.

    There are four possible limit formulas: LEGAL_MAX1, LEGAL_MAX2, LEGAL_MAX3, and LEGAL_MAX4. If the result of your funding formula is above the selected global fund limit formula, the process sets the global fund to the limit and issues a warning message.

  • The LEGAL_RSP formula.

    If the result of your funding formula exceeds the result calculated using the LEGAL_RSP formula, the process issues a warning message.

For profit-sharing agreements, there is only one funding formula and global fund limit formula per agreement. Therefore, the global fund is the same for all employees associated with that profit-sharing agreement.

However, for worker's participation agreements, it is possible to define formulas (and distribution methods) at the agreement, establishment, or work unit level. The Compute Global Fund process checks which formulas apply for each eligible employee and calculates the global fund amount according to those formulas. The process determines which formulas apply as follows:

• The work unit formulas override the formulas defined at the agreement or establishment level.

  Note: The process can only use one set of formulas. Therefore, you must make sure that employees belong to one work unit only for each agreement. Use the Group Member Overlap report to determine whether employees belong to more than one work unit.

• The establishment formulas override the formulas defined at the agreement level.

• The agreement level formulas apply if an employee doesn't belong to any of the work units or establishments listed on the Computation page.

You run the Distribute Global Funds process after the Compute Global Fund process. Using the global fund amounts that are calculated by the Compute Global Fund process, and the payroll information previously imported by the eligibility process, the Distribute Global Funds process calculates each employee's share of the fund.

The process:

• Calculates the employee's fund based on the distribution methods selected in the agreement definition.

  If an employee's fund exceeds the limit specified by the individual allocation limit formula (if this is defined), the process sets the employee's fund to the maximum and issues a warning message.

• Distributes any surplus, if the Immediate Re-share check box is selected on the Investment page (Define Agreement component).

  If there is a surplus after the initial calculations, the process recalculates the employee funds as follows:

  • Employees whose funds are at the individual allocation limit are frozen.

  • For employees who are not frozen, the process recalculates funds, including the surplus amount.

  • If there is surplus at the end of this recalculation, the steps are repeated until the surplus is zero or the number of iterations is ten.

• Sets the availability or payment date as follows:

  • For profit-sharing agreements, the availability date is determined by the unavailability duration defined in the agreement.

    Payment date is set to the first day of the fourth month after the reference period end date plus unavailability duration. For example, if the reference period end date is December 31, 2001, and the unavailability duration is five years, the availability date is set to April 1, 2007.

  • For worker's participation agreements, the payment date is set to the current date (payment is available at the end of the reference period).

    Normally, payments for this type of agreement should be made within seven months of the reference period end date. The process issues a warning message if the payment date is after this seven-month deadline.

• Sets the payment status to Entitled for profit-sharing agreements, and to Request Payment for worker's participation agreements.

The Extract Eligible Employees process runs only if these conditions are met:

• The agreement has a status of approved.

• A reference period is defined for the agreement.

  Also, the process runs only after the reference period end date.

• Contract data exists for your employees, if you defined eligibility criteria.

  The process uses contract dates to calculate seniority.

• Payroll information is set up.

  The Extract Eligible Employees process imports employees' gross salary and total days worked from these sources:

  • Global Payroll for France.

    Accumulators track employees' salaries and number of days worked. These must be included in your process lists and the payroll for the whole reference period must be finalized.

  • The record WP_EXT_PAYDATA, if an employee's payroll is not managed by Global Payroll for France.

    You must ensure that this record is populated with employee payroll data.

• If you installed Global Payroll for France, you should also set it up as follows before running the eligibility process:

  • Include the element group PAR EG PARTICIPAT in the employees' eligibility group.

  • Include the section PAR SE PARTICIP in the process list.

Before running the Compute Global Fund process, ensure that any variables associated with the funding and limit formulas are populated with the correct values for the reference period.

For the Distribute Global Funds process to run correctly, ensure that these variables are populated with the correct values for the reference period:

• Variables associated with the individual allocation limit formula.

• The KFMS variable ID (for worker's participation agreements only).

  This variable determines the total salary used in the distribution calculation based on employees' salaries.