Labor Items: Labor Cost Rates in Projects

Creation of Labor Cost Rates

On the Labor Rates (PM209900) form, you can define labor cost rates that are specific to particular entities, such as the employee, labor item, project, and project task.

When you define a labor cost rate, you specify its type, the rate, and an optional description and external reference number of the rate. Based on the type you select, particular columns become available so that you can specify the particular entity the rate applies to and other relevant details. In the Labor Rate Type column of the Labor Rates form, you select one of the following options:

• Labor Item: If you select this type in the row, you must also select the labor item and the rate.
• Employee: If you select this type in the row, you must select the employee and the rate; optionally, you can also select a particular labor item to which the rate applies.
• Project: If you select this type in the row, you must select the project and the rate. Optionally, you can select any of the following to which the rate applies: the project task and the labor item.

For each labor cost rate, regardless of its type, you specify the effective date. If there are multiple labor cost rates with the same settings, the system uses the rate with the most recent effective date that precedes the current date. You can also create a labor cost rate with the same settings as an existing labor cost rate but with an effective date that is later than the latest effective date of the existing labor cost rate.

Units of Measure in Labor Cost Rates

When you specify the rate for a row with a labor item selected on the Labor Rates (PM209900) form, you specify the rate for the base unit of measure (UOM) of the labor item. The base UOM of the labor item should be convertible into minutes so that the system can convert the base UOM to a minute. That is, there should be conversion rules from a minute to the base UOM and from the base UOM to a minute on the Units of Measure (CS203100) form.

When you create a labor cost rate for a labor item with a base UOM that is not an hour, make sure that you enter the rate for the base UOM of the labor item on the Labor Rates form so that the system calculates the correct amount when a time activity with this labor item is released.

For example, suppose that you have the TRAINING labor item, whose base UOM is UNIT. According to the conversion rules specified on the Units of Measure (CS203100) form, one unit equals four hours. On the Labor Rates form, when you add a labor cost rate with an employee and the TRAINING labor item, you should specify the rate in the base UOM, which is UNIT. When the employee enters a time card on the Employee Time Card (EP305000) form and selects the TRAINING labor item in a time activity on the Activity (CR306010) form, the time is reported in hours even though the base UOM of the selected item is not an hour. When the time card with the corresponding time activities is released, the system generates a project transaction with the TRAINING labor item in the base UOM of the item. If the employee has reported eight hours, the project transaction will contain two TRAINING units.

Retrieval of Labor Cost Rates

When you create a time card on the Employee Time Card (EP305000) form, for each line, you select the employee, project, project task, labor item, and date. For each time card line, the system retrieves the most appropriate labor cost rate from the Labor Rates (PM209900) form. The system selects the most specific existing labor cost rate among the defined labor cost rates that matches all the settings specified in the time card line. The system looks for the following sets of settings and uses the first set it finds that match the time card settings:

• The Project rate type, project, project task, employee, labor item, and effective date
• The Project rate type, project, project task, employee, and effective date
• The Project rate type, project, project task, labor item, and effective date
• The Project rate type, project, project task, and effective date
• The Project rate type, project, employee, labor item, and effective date
• The Project rate type, project, employee, and effective date
• The Project rate type, project, labor item, and effective date
• The Project rate type, project, and effective date
• The Employee rate type, employee, labor item, and effective date
• The Employee rate type, employee, and effective date
• The Labor Item rate type, labor item, and effective date

If there are multiple labor cost rates with the same settings, the system uses the rate with the actual effective date corresponding to the date of the time card line in the time zone in which the time card line was reported.