Define Payroll Elements for Processing Absences for Canada

You define elements to calculate and process absence payments. Create an absence element for each absence plan that transfers absence payment information for payroll processing. When you create the plan, select the absence element to link it to the absence plan.

When you define an absence element, your responses to the element template questions determine which elements, balances, formulas, and calculation components the template generates.

Define an absence element, selecting a primary classification of Absence, and a secondary classification. Typically, the predefined values include vacation, maternity, sickness, and other. Use the Elements task in the Payroll or Setup and Maintenance areas.

Defining an absence element involves these tasks:

Completing absence detail questions
Completing absence payment questions
Completing unpaid absence payment questions
Completing tax processing, ROE, and accrual liability and balance payment questions
Submitting the element
Defining element eligibility records
Defining cost distributions

Complete Absence Detail Questions

The questions you complete in the Absence Details section determine which subsequent questions the template displays. You enter this information in the Absence Details section:

Specify the calculation units to use when reporting the absence, for example that's shown on the payslip, and statement of earnings. Typically, you select Days or Hours for your reports that correspond to the units for your absence plan.
When creating an absence element, select the Work Units Calculation Rule to calculate the absence rate.

Select the type of absence information you want to transfer to payroll. This is based on the type of absence management plan as given in this table.

Absence Management Plan Type	Absence Information to Transfer	Examples
Accrual	Accrual Balances	A vacation accrual plan that's not processed through payroll. The leave isn't shown separately on the statement of earnings.
Accrual Balances and Absences	Accrual Balances and Absences	A vacation accrual plan that's processed through payroll. The leave is shown separately on the statement of earnings.
Qualification	Qualification Absences	A maternity plan that's processed through payroll. The leave is shown separately on the statement of earnings.
No Entitlement	No Entitlement Absences	A no entitlement leave plan that's processed through payroll. The leave is shown separately on the statement of earnings.

Complete Absence Payment Questions

You can choose to reduce the employee's regular earnings by the full absence payment or a defined rate. This option is defined in the Absence Payments section of the absence element template. Select the appropriate option for salaried employees, as defined in this table.

Question	Steps
Reduce regular earnings by absence payment	Doesn't require a rate definition.
Select rate to determine absence deduction amount	Select this option if your absence payment: Is at a different rate than your salary reduction In this case, use the associated rate fields to select the rates to determine the absence deduction amount and rate to use in the absence calculation. You are processing unpaid absences In this case, refer the next section on how to configure an unpaid absence.

Question

Steps

Reduce regular earnings by absence payment

Doesn't require a rate definition.

Select rate to determine absence deduction amount

Select this option if your absence payment:

Is at a different rate than your salary reduction

In this case, use the associated rate fields to select the rates to determine the absence deduction amount and rate to use in the absence calculation.
You are processing unpaid absences

In this case, refer the next section on how to configure an unpaid absence.

Complete Unpaid Absence Payment Questions

When creating the element for an unpaid absence, select these options:

Under the Absence Plan Details section, select No Entitlement Absences.
Under the Absence Payments section, select Select rate to determine absence deduction amount. You must also leave the following rate fields blank:
- Rate to Determine Absence Deduction Amount
- Which rate should the absence payment calculation use?
  
  If you don't select a rate, the payroll calculation automatically reduces the salary by the regular pay rate of the employee, thus causing an unpaid absence. The unpaid absence elements are then reported on the payslip and the statement of earnings.

Under the Record of Employment section:
- Select Yes for the option Are there insurable hours associated with this element?
- Select Yes for the option Should this element create a ROE event notification?

Complete Tax Processing, ROE, and Accrual Liability and Balance Payments Questions

The absence element template contains Canadian specific rules that are applicable for all the secondary classifications of absence elements. The additional questions include:

Tax processing type for absence payments
Record of Employment (ROE) options for employment insurance (EI) allocations and EI hours
Option to designate a different tax method, EI allocation and EI hours for the final disbursement payments, if final payments are enabled
Option to designate a different tax method, EI allocation and EI hours for the discretionary payments, if discretionary payments are enabled
Option to create a ROE Notification event for the absence

The above options are described in this table.

Element Template Section	Question	Description
Tax Processing	What type of taxation applies to this element?	Specifies the type of taxation for the absence payment.
Record of Employment	If this element is insurable, how are the earnings allocated?	Specifies how the EI earnings are allocated, by date earned or date paid. This is required for ROE processing and defaults to date earned.
Record of Employment	Are there insurable hours associated with this element?	Specifies if there are EI hours associated with the element or not. This is required for ROE processing and defaults to Yes for the base absence element. However, it defaults to No for disbursement and final disbursement element.
Record of Employment	Should this element create a ROE event notification?	Specifies whether or not to create an event notification when a termination or unpaid leave of absence occurs for the employee.
Accrual Liability and Balance Payments	Does this plan enable balance payments when enrollment ends?	Creates the Final Disbursement shadow element, if the value selected is Yes. If No, the shadow element isn't created. When you select Yes for this question, you're presented with the additional options to specify the tax processing type, EI allocation and EI hours for the final disbursement payments. The default tax processing type is Nonperiodic, EI earnings allocation is date paid, and EI hours is No.
Accrual Liability and Balance Payments	Does this plan enable partial payment of balance?	Creates the Discretionary Disbursement shadow element, if the value selected is Yes. If No, the element isn't created. When you select Yes for this question, you're presented with the additional options to specify the tax processing type, EI allocation and EI hours for the discretionary disbursement payments. The default tax processing type is Nonperiodic, EI earnings allocation is date paid, and EI hours is No.

The questions in the ROE section, as given in this table, determine the options you can choose for the base absence elements.

Submit the Element

When you submit the element, the template automatically configures a base pay element, balances, formulas, and calculation components.

The template also configures additional shadow elements, depending on the options selected in the template to transfer absence information, as shown in this table.

Element Name	Purpose
<Absence Name>	Absence element you associate with the absence plan.
<Absence Name> Accrual <Absence Name> Accrual Calculator <Absence Name> Accrual Result	Shadow elements: Retrieves absence accrual information from Absence Management Processes liability
<Absence Name> Entitlement <Absence Name> Entitlement Calculator <Absence Name> Entitlement Result	Shadow elements: Retrieves absence accrual information from Absence Management Processes absence payments and deductions
<Absence Name> Entitlement Retroactive	Shadow element used to process absence payments and deductions in retroactive processing.
<Absence Name> Discretionary Disbursement <Absence Name> Discretionary Disbursements Calculator <Absence Name> Discretionary Disbursements Result	Shadow elements: Retrieves partial payment information from Absence Management Processes these disbursements
<Absence Name> Discretionary Disbursement Retroactive	Shadow element used to process partial payment disbursements in retroactive processing.
<Absence Name> Final Disbursement <Absence Name> Final Disbursement Calculator <Absence Name> Final Disbursement Result	Shadow elements: Retrieves final payment information from Absence Management, such as upon employee termination Processes these disbursements
<Absence Name> Final Disbursement Retroactive	Shadow element used to process final payment disbursements in retroactive processing.

Define Element Eligibility Records

Define element eligibility records for all the elements generated by the template, for example for the base element, the accrual and entitlement elements, discretionary and final disbursement elements. For example, for the element Vacation 1, you must create element eligibility as follows:

<base element> (Vacation 1)
<base element> accrual (Vacation 1 Accrual)
<base element> entitlement (Vacation 1 Entitlement)

If you chose to create the final disbursement or discretionary elements, you must also create element eligibility for these shadow elements:

<base element> discretionary disbursement (Vacation 1 Discretionary Disbursement )
<base element> discretionary disbursement result (Vacation 1 Discretionary Disbursement Result)
<base element> final disbursement (Vacation 1 Final Disbursement)
<base element> final disbursement result (Vacation 1 Final Disbursement Result)

If you're processing retroactive payments, you must also create element eligibility for these retroactive shadow elements:

<base element> entitlement retroactive (Vacation 1 Entitlement Retroactive )
<base element> discretionary disbursement retroactive (Vacation 1 Discretionary Disbursement Retroactive)
<base element> final disbursement retroactive (Vacation 1 Final Disbursement Retroactive)

For more information, refer to Configuring Absence Management for Canada guide on My Oracle Support.

Define Costing Absence Elements

If your enterprise calculates cost distributions, specify costing element eligibility for these payment elements:

Base absence entitlement, entitlement results, and entitlement retroactive elements
Discretionary disbursement, disbursement result, and disbursement retroactive elements
Final disbursement, disbursement result, and disbursement retroactive elements

The costing process would cost the change in the liability balance since the last payroll period, debit the expense account and credit the liability account.

You must determine how to cost element eligibility records, including which type of costing to apply and which input value to cost. You determine which account numbers to specify for the cost account segments, such as the natural account, and which offset account balances the cost account.