Create Absences for California Sick Pay Rates

Eligible paid commission or piece-rate employees in California must have their commission or piece rate factored into their base salary rate.

For these employees, the payroll process calculates their sick pay rates differently than their base salary rate.

To find their sick pay rate, the payroll process:

Determines the 90 days of employment before the absence, based on the date earned.

It does this using the "Relationship 90 Earned Days to Date" balance dimension you attach to the related balances.

See the following steps for details.
Finds the full pay periods that include that date range.
For those pay periods, it finds the employees':
- Regular earnings
- Commissions
- Piece-rate earnings
Based on those earnings and hours worked, it determines the pay rate.

In this example, you want to configure absences for the following scenario.

A California employee reports a sick day on 5/10/17.

This makes the 90-day date range for earnings calculations to be for the period beginning 1/29/17 to the period ending 5/6/17.
The employee earns a regular base rate of $31.25 per hour and works 40 hours per week.
The employee is eligible for monthly commissions.
The employer runs biweekly payroll.

During this 90-day period, the employee accrues the following earnings.

Period ending earned date	Earnings type	Earnings amount	Earnings hours
2/11/17	Regular	2500	80
	Commission	1000	N/A
2/25/17	Regular	2500	80
3/11/17	Regular	2500	80
	Commission	3000	N/A
3/25/17	Regular	2500	80
4/8/17	Regular	2500	80
	Commission	2500	N/A
4/22/17	Regular	2500	80
5/6/17	Regular	2500	80
	Commission	4000	N/A
Total		28000	560

Based on these values, the sick pay rate would be $50 per hour.

To correctly calculate this employee's earnings:

Define the earnings balance.
Define the hours balance.
Define the rate definition.
Create the absence element.
Define the absence plan, and ensure the employee is enrolled.
Run payroll.

Define the Earnings Balance

Define an earnings balance to capture all earnings you want included in the sick pay rate calculation.

From My Client Groups, click Show More.
In Payroll, click Balance Definitions.
Click Create.
Select your US legislative data group (LDG), and click Continue.

Define an earnings balance.

Field label	What you enter
Name	Rolling 90 Days Earnings Balance
Balance Category	Standard Earnings
Unit of Measure	Money

Save your work.
Restart the task, query your balance, and navigate to the balance dimension train stop.
Set the start date of the absence plan as the effective as-of date.
Click Select and Add from the Actions menu.
Search for and select the "Relationship 90 Earned Days to Date" dimension.
Click Apply and Done.
Click Submit.
In Balance Feeds by Classification, click Add Row.
Add the following classifications.
- Regular
- Shift
- Awards and Prizes
- Bonus
- Commission
Select Add for each.
Click Submit.
Click Done.

Define the Hours Balance

Define an hours balance to capture all earnings hours you want included in the sick pay rate calculation.

Start the Balance Definitions task.
Click Create.
Select your US LDG, and click Continue.

Define an earnings balance.

Field label	What you enter
Name	Rolling 90 Days Hours Balance
Balance Category	Total Standard Earnings
Unit of Measure	Hours in decimal format, 3 places

Save your work.
Restart the task, query your balance, and navigate to the balance dimension.
Set the start date of the absence plan as the effective as-of date.
Click Select and Add from the Actions menu.
Click Submit.
In Balance Feeds by Element, click Create.
Add the following elements.
- Regular Salary Earnings Results
- Paid Time-Off Earnings Results
- Holiday Earnings Results
For each, be sure to select the Hours Calculated input value and select Add.
Click Submit.
Click Done.

Define the Rate Definition

Create a rate definition that derives the sick pay rate by dividing the previously defined earnings balance by the previously defined hours balance:

From My Client Groups, click Show More.
In Payroll, click Rate Definitions.
Click Create.
Select the Derived Rate category and your US LDG.
Click OK.

Enter the following values.

Field label	What you enter
Name	Commission Sick Pay Rate
Short Name	COMMSICKPAY
Employment Level	Payroll Assignment
Status	Active
Periodicity	Hourly
Periodicity Conversion Formula	Assignment Working Hours Rate Annualized
Currency	US Dollar

In Rate Contributors, click Create.
Select the Balance contributor type, and click OK.

Enter the following values.

Field label	What you enter
Add or Subtract	Add
Reference Date	Previous Payroll Period End
Balance Name	Rolling 90 Days Earnings Balance Note: This is the balance you created in the Define the Earnings Balance section
Balance Dimension	Relationship 90 Earned Days to Date
Periodicity	Delete the default value
Divisional Balance	Rolling 90 Days Hours Balance Note: This is the balance you created in the Define the Hours Balance section.

Click Save and Continue.
Select Contributor Rules.
For Contributor Total Periodicity, select Hourly.
Click Submit.

Define the Absence Element

Create an absence element that uses your rate definition to pay the correct sick pay rate to your applicable employees.

From My Client Groups, click Show More.
In Payroll, click Elements.
Click Create.
Select your US LDG.
Select the Absences primary classification and Sickness secondary classification.
Click Continue.

In the element template, enter the following.

Field label	What you enter
Name	CA Commission Sick Pay
Reporting Name	CA Commission Sick Pay
What calculation units are used for reporting?	Hours
Work Units Conversion Rule	Periodic Work Schedule Rate Annualized
What type of absence information do you want transferred to payroll?	Accrual Balances and Absences

Click Next.

Enter the following.

Field label	What you enter
How do you want to reduce earnings for employees not requiring a time card?	Select rate to determine absence deduction amount pay.
Rate to Determine Absence Deduction Amount	Leave blank. Note: This reduces the salary by the base rate.
Which rate should the absence payment calculation use?	Commission Sick Pay Rate Note: This is the rate you defined earlier in this example.
How do you want Absence Payment to be taxed?	Regular
Calculate absence liability?	Yes
Which rate should the liability balance calculation use?	Commission Sick Pay Rat Note: This is the rate you defined earlier in this example
Does this plan enable balance payments when enrollment ends?	No
Does this plan enable partial payment of balance	No
Should this element be included in the earnings calculation of the FLSA overtime base rate?	No
Should this element be included in the hours calculation of the FLSA overtime base rate/	No

Click Next.
Click Submit.
Create element eligibility for the base and indirect elements.
Click Done.

Define the Absence Plan

Define an absence plan that includes the employees' commissions or piece rate in their sick pay rate calculations.

From My Client Groups, click Show More.
In Absences, click Absence Plans.

Create a plan with the following values on the Entries and Balances tab.

Field label	What you enter
Transfer absence payment information for payroll processing	Select
Element	CA Commission Sick Pay

For further info, see Set Up Absence Plans for the US in the Help Center.

Enroll the employee.

When the employee reports an illness-related absence, the payroll process calculates the sick pay rate based on the correct pay rate.

Run Payroll

When you run the payroll process:

The rate definition divides the applicable earnings by the applicable hours. This derives the sick pay rate.
The process divides the applicable earnings of $28,000 by the applicable hours of 560.
The process pays the sick pay at the $50 per hour rate.