Define Payroll Elements to Process Absences

You define elements to calculate and process absence payments in Oracle cloud. When you define an absence element, your responses to the element template questions determine which elements, balances, formulas, and calculation components the template generates.

Defining an absence element involves these steps:

• Define an absence element

• Complete absence detail questions

• Complete accrual liability and balance payment questions

• Complete absence payment questions

• Submit the element

• Define element eligibility records and cost distributions

Define an Absence Element

Use the Elements task to define an absence element, selecting a primary classification of Absence, and a secondary classification. Typically, the predefined values include vacation, maternity, and sickness.

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:

1. 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 calculation rule to calculate the absence rate.

2. Select the absence information to transfer to payroll based on the type of absence management plan.

   Absence Management Plan Type	Absence Information to Transfer
   Accrual	Accrual Balances
   Accrual, Leave Donation, Compensatory	Accrual Balances and Absences
   Qualification	Qualification Absences
   No Entitlement	No Entitlement Absences

Complete Accrual Liability and Balance Payment Questions

If you transfer accrual balances, complete these questions.

Question	Steps
Calculate absence liability?	Select Yes, if you calculate liability. Select a liability rate. Usually the rate is the same as the absence payment rate. You might select a different rate when estimating liability for billing purposes.
Does this plan enable balance payments when enrollment ends?	Select Yes to configure a final disbursement element and to maintain balances for the disbursement hours and payments. Optionally, select a rate to use for the calculation.
Does this plan enable partial payment of balance?	Select Yes to configure a discretionary disbursement element and to maintain balances for disbursement hours and payments. Optionally, select a rate to use for the calculation.

Complete Absence Payment Questions

Complete these questions:

1. Select a method to reduce regular earnings if employees don't complete a time card.:

   • Reduce regular earnings by absence payment (entitlement payment balance)

   • Select rate to determine absence deduction amount (entitlement deduction balance)

     You might select one of these options:

     • The Reduce regular earnings option to reduce regular earnings by the absence payment. This means that the employee is paid the same net amount as if they weren't absent.

     • The Select rate to determine deduction amount option when the employee isn't due to be paid for the absence at the same rate as their regular earnings. In this case, the absence deduction rate that you select will be a rate that deducts 100% of the regular earnings. However, the absence payment rate would be a different rate, for example 50%.

2. Optionally, select a rate to calculate the absence payment.

   If you have standard earnings and absence elements in the same payroll run that reduce regular earnings, the payroll calculation reduces earnings in this sequence:

   1. Using absence element entries

   2. Using any standard earnings elements that reduce regular earnings

   The salary balance isn't reduced beyond zero.

3. You can now ensure that absence entitlement payments are made to employees after terminations. Use the Does this plan enable entitlement payments after termination? question on the absence element template to set the entitlement element to Final Close.

   Example: Amelia is due to be paid maternity payments after her termination. Select Yes in this question to set the latest entry date of the entitlement elements to final close. With this, the absence entitlement payments are made to Amelia after her termination. When Amelia is terminated, change her employment assignment status to Process When Earning. Also, set the TERM_INCLUDE_PR_LEVEL action parameter to Y, so that payroll relationship level entries are considered for processing.

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 elements, depending on the options selected in the template to transfer absence information, as shown in this table.

Type of Absence Information to Transfer	Optional Balance Payments Selected	Additional Elements Configured
Accrual Balances	Discretionary Disbursements Final Disbursements	Accrual Discretionary Disbursement Final Disbursement
Accrual Balances and Absences	Discretionary Disbursements Final Disbursements	Accrual Entitlement Discretionary Disbursement Final Disbursement
Qualification Absences	none	Entitlement
No Entitlement Absences	none	Entitlement

Define Element Eligibility Records and Cost Distributions

Define element eligibility records for all elements generated by the template, for example for your accrual, entitlement, discretionary and final disbursement elements.

If your enterprise calculates cost distributions, specify costing for all the element eligibility records. For example, for an accrual element, you do these steps

1. Define element eligibility records for the accrual, accrual results, accrual retroactive, and accrual retroactive results elements.

2. Specify costing for the accrual results and retroactive results elements.

The costing process costs the change in the liability balance since the last payroll period, debits the expense account and credits the liability account.