Prerequisites

Because it is common for some payments to be made only upon termination and some standard earnings might not be processed as part of termination pay, you must define exactly which earnings should be paid in response to a termination.

Before termination earnings or deductions can be processed, you must:

• Define your termination versions.

  Termination versions are the set of reasons for termination, layoff, or completion of contract that are considered sufficient to trigger a set of termination payments and deductions.

• Define the earnings and deductions to process upon termination (or layoff and completion) by associating each element with one or more termination versions.

• Use the delivered generation control element LF GC VER FINIQ to trigger the processing of each termination earning and deduction only when the action and reason for a payee's termination match the termination version associated with the earning or deduction.

• Identify the terminated payees and enter the appropriate action/reason for termination on the Job Data pages in HR.

• Define whether the Salary Credit will be considered for tax calculation, either at the payee level or calendar ID level, by using the delivered Salary Credit in Terminations variable (LF VR CRED SAL). The Salary Credit in Terminations variable has a default value of Y to include the salary credit in the termination tax calculation. The Salary Credit in Terminations variable should be changed to N if the salary credit is not considered for termination tax calculation.