Setting Up Employees for Public Holidays (NZ)

Work Pattern Source

This setting is used when evaluating whether a public holiday falls on an OWD for an employee, and when deriving the scheduled work hours to calculate the leave payment rate, if the employee’s FBAPS Rate is set to “RDP - Standard Rate”. The setting has the following options:

• Work Calendar: Suitable for use for any employee, working a predictable, static work pattern that fits a seven day work week. The actual work calendar applied to calculations is that which is set on the Employee’s Default Pay group.
• Employee Schedule: Appropriate for employees working variable hours, such as those that are rostered or working shifts.

FBAPS Rate

This setting is used when calculating leave payments to an employee for a Public Holiday worked/not worked.

It is important to note that this rate only serves as the employee’s default rate. When processing leave payment in a pay run, all three rates are calculated and provided for comparison and review in the leave summary report. The rate as specified in the employee pay details is applied by default, but can be changed by the payroll admin should a higher rate apply.

The setting has the following options:

• Relevant Daily Pay: The Relevant Daily Pay (RDP) option can be based on either of the following:
  • Standard Rate: The employee standard hourly rate, as specified on their default pay group. Use this setting if a daily rate can consistently be determined from the employee’s hourly rate, not having to consider any additional income such as particular daily allowances, or overtime.
  • Standard Pay: The employee's standard pay definition, containing a granular specification of pay items due to the employee according to a defined pattern. Use this setting if the employee regularly receives income such as allowances, or overtime on particular days.
• Average Daily Pay: The Average Daily Pay (ADP) is suitable only if it is not possible or practical to work out the relevant daily pay or an employee’s daily pay varies in the pay period in question.
• Agreed Rate: The Agreed Rate may be used when an employee’s agreement specifies a rate higher than either ADP/RDP. If selected, the user is prompted to enter the applicable rate.

Standard Pay

As mentioned above, the payroll administrator might choose to value an employee’s leave payments according to a granular RDP definition, specified for relevant standard pay items marked as liable for RDP (see “Pay Item Liabilities” on page 7). The RDP definition attached to a standard pay item acts as a template and evaluated in the context of a particular pay period to determine the payments due to an employee when, for instance, taking a day off on a Public Holiday.

For example, an employee receiving a regular higher duty allowance on Fridays should still receive this allowance when observing a Public Holiday. Using the RDP definition, the Payroll Administrator can configure the pattern according to which the allowance is typically paid - in this case, every Friday. A pattern frequency of one week is selected, and the allowance amount captured against the relevant day. Should a public holiday fall on a Friday, this allowance amount would be incorporated into the employee’s RDP rate.

It is important to note that if this RDP rate calculation method is selected, all relevant pay items (e.g. Wages, Allowances, Overtime, etc.) require an RDP Definition.

Enduring allowances also require careful consideration. Capturing an RDP definition for such items may lead to double-dipping. In such a case, the Payroll Administrator might choose one of two paths:

• Decide not to capture an RDP definition, in which case the RDP rate applied to leave may not be a true reflection of the employee’s daily earnings, even though the employee’s final pay will include all allowances due.
• Decide to capture an RDP definition, in which the administrator will have to manually adjust the remaining allowance amount payable for the period.

Employee Work Schedule

The Employee Work Schedule screen (MPPP2260) provides a single point of reference against which to review an employee’s historic work pattern, overlaying the employee's scheduled and timesheet leaves hours, and indicating whether leave was taken on a particular day.

The Work Pattern Source specified on the Pay Details screen (MPPP2310) affects how entries are maintained within the employee schedule in the following ways:

• Working Calendar: In this case, entries are automatically generated in the employee schedule when creating a new pay run.
• Employee Schedule: In this case, entries are manually uploaded for each employee by the payroll administrator.

In either case, the payroll administrator has the option to make manual changes and adjustments to an employee’s schedule as required.

The employee schedule also plays an important role in calculating and processing leave taken. Schedule entries are either sourced from the work calendar or rostering system (whichever suits the employee pattern), providing a single consistent mechanism against which to perform the following:

• ADP calculations use the employee schedule to determine the days worked over the past 52 weeks.
• RDP Standard rate calculations use the employee schedule to determine the hours worked on a particular day when basing the RDP rate of an employee’s standard hourly wage.
• Validate whether or not a public holiday falls on an OWD.