Rate Definitions for Absence Plans and Payments

To pay a person during their absence, you need to find the rate for each unit of that period, such as days or hours. You use rate definitions to help you with this.

Use the Rate Definitions task.

Before you create the rate definitions, you should know:

• How rate definitions work with absence plans

• What types of absence payments support rate definitions

How Rate Definitions Work with Absence Plans

To associate a rate definition with an absence plan:

1. Create the rate definition using the Rate Definitions task.

   For further info, see Overview of Absence Rate Definitions for the US in the Help Center.

2. Associate the rate definition with the absence plan on Entries and Balances on the Absence Plans task.

For example, to calculate payments of each time unit when you disburse an accrual balance for a terminated employee, create a rate definition using the Manage Rate Definitions task. Then, when you create an absence plan, you select the rate definition you created from the Final Disbursement Rate Rule list on Entries and Balances.

Note: Don't enter rate rules at the plan level if you have already defined them at the employment level. If you enter the rates at both the element and the plan levels, the rate at the plan level takes priority.

What Types of Absence Payments Support Rate Definitions

When you're defining your absence element, the template invites you to associate rate definitions with the different element types it generates. If you choose not to select a rate definition, it uses the employee's salary rate.

When you choose this in the template	It creates this	This is what happens when you select a rate definition for it
Calculate absence liability?	<element name> Liability balance	Calculates the cost of a worker's accrual balance to determine employer liability. For example, if the employee is terminated or loses eligibility for the absence plan, you can determine employer liability for worker time accruals for the rest of the accrual term.
Does this plan enable balance payments when enrollment ends?	<element name> Final Disbursement indirect element	Calculates the payment of accruals when plan participation ends. For example, if the worker is terminated or loses eligibility for the absence plan, you can use a rate definition to calculate the final accrual balance. Create a rate definition that considers the worker's salary details and calculates the payment value for each unit of accrued time.
Does this plan enable partial payment of balance?	<element name> Discretionary Disbursement indirect element	Calculates the payment when paying out part of an accrual balance. For example, if the worker is terminated or loses eligibility for the absence plan, you can disburse the remainder of the accrual balance. Create a rate definition that considers the worker's salary details and calculates the payment value for each unit of accrued time.
Which rate should the absence payment calculation use?	N/A	Calculates the payment during an accrual and qualification absence period. For a qualification absence plan, you can select this rate definition to calculate payment for a qualification absence period. When you create the qualification plan, you define qualification bands to specify the percentage of payment during an absence period. For example, you want to pay the worker 75% pay up to the first 90 days of the absence. You use a rate definition to define the calculation method to translate that percentage into an actual payment value.
Which rate determines the salary reduction amount?	N/A	Defines the rate at which the process reduces the person's regular salary.