What Are Labor Cost Transfers?

Labor cost transfer redistribute labor costs to grant activities and/or General Ledger accounts after normal labor distribution has occurred. Cost transfers may be needed as a result of effort certification or changes in salary caps, funding status, or employee status.

To create labor cost transfers, you create a labor cost transfer template for an employee for a specific period of time. The template's lines must be approved by an appropriate person (such as a grant administrator or principal investigator). Once the template is approved, you can process labor cost transfers. For employees paid with Lawson Payroll, use Labor Cost Transfer Processing (GM170). For employees paid using a non-Lawson payroll system, or for affiliate employees who do work funded by your grants, use Non-Lawson Payroll Cost Trans (GM171). These batch routines create reversing and adjusting entries to redistribute eligible costs, capture information for effort reporting, and maintain links to the initiating cost transfer template.

When Do I Need a Labor Cost Transfer?

The following situations are examples of when you might need labor cost transfers:

  • Effort reporting

    Effort reporting can drive the redistribution of labor costs to grants. For example, a researcher's labor distribution template charges 60 percent of her time to a specific grant. The remaining 40 percent of her time is spent in clinic and is charged to her regular department (general ledger account). On her effort report, the researcher certifies that she spent 70 percent of her time on research funded by the grant and 30 percent of her time in clinic. You can do a cost transfer to redistribute her labor costs for the effort reporting period. Depending on the situation, you may also need to create a new labor distribution template to charge future encumbrances and labor distribution as 70 percent to the grant and 30 percent to the clinic.

  • Unapproved or expired labor distribution templates

    Labor distribution processing ignores labor distribution template lines that are not approved or have expired. The portion of the employee's salary that was to have been charged to a grant and general ledger account in the template distribution line is charged to the grant and general ledger account in the original time record or imported labor record. You may need to process a cost transfer to redistribute that portion of the employee's salary to the appropriate grant or department.

  • One time record or imported labor record for a pay period

    If you use Lawson Payroll and create one time record per employee for a pay period, or if you use a non-Lawson payroll system and import one labor record per employee for a pay period, the labor distribution template in effect for the date in the time or import record applies to labor costs for the entire pay period. You may need to do a labor cost transfer if multiple templates apply to the dates covered by the pay period.

    For example, the effective date of an employee's labor distribution template is November 28. Another labor distribution template for the employee is effective on December 10. You process payroll for the pay period of December 1 through December 15 with one time record dated December 15. The template effective December 10 applies to the entire pay period.

    Note: To more accurately charge labor distribution to grants based on grant start and end dates and to minimize the number of cost transfers required, create one time record for each day in the pay period. You only need daily time for employees who are eligible for labor distribution.