Retroactive pay calculation

The retroactive pay calculation calculates, and as an option, creates time records for retroactive pay amounts. When you calculate retroactive pay, Payroll reads the payroll history files to determine the amount due to the employee.

You can create a separate time record for each distribution found on the time records that were used to calculate the retroactive pay. Retroactive time records can be expensed using current home wage expense distribution.

There are two ways to calculate for the retroactive wages of the employee:

• Retroactive Pay Calculation (PR131) to calculate based on a flat amount per hour or a percentage of wages for a specific population of employees. The calculation can be based on a specified group of wages or all wages earned by an employee for a specified date range. Different parameters can be defined for multiple job codes. You can establish unique amounts or percentages for combinations of job codes and pay classes or pay codes. If you choose to have time records automatically created, the time records are created as a flat amount.

  Example: The payroll manager must create retroactive pay time records for the Minnesota Nurses Association (MNA) union, which has just re-negotiated a 6.2 percent salary increase for all employees in the union. The increase is retroactive to the first of May through the current pay date (June 16, 2001). Therefore, the payroll manager processes the Retroactive Pay Calculation using the following parameters.

  Payroll creates time records for all employees in this union for the appropriate retroactive pay amount based on the pay history from May 1, 2001 through June 15, 2001.

  A separate retro time record is created for each distribution found on the time records which were used to calculate the retroactive pay.

• Retroactive Pay Rate Change Calculation (PR133) is used to calculate and generate retro pay adjustment for the employee or position Pay Rate and HR32.1 Additional Rate. The program refers to the retroactive pay-related change in Retroactive Pay Change Audit (HR35.1) and processes the change if status is not On Hold. The retro time records will have the corrected amount based on the difference of the current rate and previous rate.

  Example: The biweekly-paid, salaried employee has an annual salary of $260,000. After being paid for 12 pay periods, the employee has a retroactive pay rate increase to $390,000 effective on the 7th pay period of same year. Therefore, processing PR133, the employee would be receiving retroactive adjustment pay total of $30,000 for the last 6 pay periods (that is, retroactive time records of $5,000 for each work period).

  A separate retro time record is created for each distribution found on the time records which were used to calculate the retroactive pay.