Setting Up Administer Compensation

This chapter provides an overview of Administer Compensation, and discusses how to:

Set up rate codes.
Define groups of rate codes.

Understanding Administer Compensation

In the following overview, the first step—defining rate codes—is required. The remaining steps are optional, but they provide invaluable functionality for rate code use.

To administer compensation:

Define rate code classes on the Rate Code Classes page.
Define rate codes on the Comp Rate Code Table page.
Define rate code groups on the Rate Code Groups page and enable the use of rate code groups in the system.
Associate rate codes with salary steps on the Salary Step Components page of the Salary Grade component.
Define special rate code defaulting rules using the Rate Code Defaulting Rules component.
Associate rate codes with job codes, positions, and worker job records.
Compensate workers by using salary points:
1. Select the Salary Points check box on the Options page of the Installation component.
2. Set up the Salary Points monetary value on the Default Settings page of the Company component.
3. Associate the point value (an integer) with rate codes on:
  
  – The Salary Step Components page of the Salary Grade component.
  
  – The Default Compensation page and the Non-Base Compensation page of the Job Code component.
  
  – The Compensation page of the Job Data component.

Setting Up Rate Codes

To set up rate codes, use the Rate Code Class Table (RATECD_CLASS_TBL) and Comp Rate Code Table (COMP_RATECD_TBL) components. Use the CI_COMP_RATECD_TBL component interface to load the data into the tables for this component interface.

This section provides an overview of creating seniority rate codes, lists the pages used to set up rate codes, and discusses how to:

Create rate code classes.
Define rate codes.
Associate seniority rate codes with compensation increases.
View defaulting rules associated with compensation rate codes.

Note. If you are assigning rate code classes to rate codes, you must define rate code classes before creating rate codes.

Pages Used to Set Up Rate Codes

Page Name	Object Name	Navigation	Usage
Rate Code Classes	RATECD_CLASS_TBL	Set Up HRMS, Foundation Tables, Compensation Rules, Rate Code Class Table	Create rate code classes.
Comp Rate Code Table (compensation rate code table)	COMP_RATECD_TBL	Set Up HRMS, Foundation Tables, Compensation Rules, Comp Rate Code Table, Comp Rate Code Table	Define rate codes.
Comp Rate Code Table - Seniority Pay	SENIORITY_PAY	Set Up HRMS, Foundation Tables, Compensation Rules, Comp Rate Code Table, Seniority Pay	Associate a seniority rate code with: Levels of compensation increases. One or more groups that you define using Group Build.
Comp Rate Code Table - Combination Rules	COMP_RATECD_RULES	Set Up HRMS, Foundation Tables, Compensation Rules, Comp Rate Code Table, Combination Rules	View defaulting rules associated with a compensation rate code.

Creating Rate Code Classes

Access the Rate Code Classes page.

You can associate individual rate codes with rate code classes. These classes are used as search criteria on rate code search pages throughout the system. After you create rate code classes on this page, you assign them to rate codes on the Comp Rate Code Table page.

The predefined rate class SENPAY enables you to bundle rate codes used to administer seniority pay to workers.

Defining Rate Codes

Access the Comp Rate Code Table page.

Use Highest Rate

Select to use the highest rate of pay for this rate code. Use this option when a worker is temporarily placed in another job that is paid at a higher rate. This field does not affect human resources processing.

For Payroll for North America: When you assign rate code at the job level, you can enter a compensation rate that differs from the rate defined on the rate code table. If you clear this check box, the rate that you specify at the job level overrides this rate.

Apply FTE (apply full-time equivalency)

Select for the rate code to be calculated as part of FTE. FTE is the percentage of full time that a worker normally works in the corresponding job. Full time is defined in the Standard Hours and Standard Work Period fields on the Salary Plan table. Alternatively, it can be defined in the default Standard Hours and Standard Work Period fields on the Installation table.

For Payroll for North America: Select to include full time equivalency in the job in the calculation of a base pay rate. You can select this check box only when the rate code type is Flat Amount or Hourly Rate. This check box does not apply to non-base-pay rates; it is unavailable for entry if you clear the Base Pay check box.

Default Without Override

Select to ensure that compensation rate of the workers assigned to this rate code cannot be manually updated on the Compensation page of the Job Data component. You must select this check box for seniority rate codes.

Note. We do not recommend clearing this check box for a rate code used as an absorbable premium on the Salary Plan table after the rate code has been added to worker compensation packages.

Rate Code Type

Select a compensation rate type. Depending on the type you select, certain fields become available for entry. Values are:

Flat Amount: A fixed (or “flat”) amount.

Hourly Rate + Flat Amount: A flat amount that is paid in addition to the hourly rate that is specified on a worker’s timesheet. Enter the flat amount in the Compensation Rate field. This type cannot be a base-pay component.

Hourly Rate: An hourly rate of pay.

Percent: A percentage for use in defining compensation.

Points: This type of rate code is paid using salary points instead of currency. The monetary value of each point is set up on the Company Table page.

Note. To use points, select the Salary Points check box on the Installation Table - HRMS Options page.

See Setting Up Implementation Defaults.

Rate Code Class

Select a rate code class to associate with the rate code. Values include:

Elements of Base Salary (BASSAL): Used in salary forecasting.

Defined Range Rate Codes (DFRPAY): Used for pay components that are based on grade ranges within salary plans.

Regular Bonus (REGBON): Used in salary forecasting.

Seniority (SENPAY): Enables you to create seniority pay components, associate them with levels of pay increase, and update them according to changing seniority status.

Note. If you have created additional rate code classes, you can select one of the delivered values described previously or one of the values you created.

Calculated By

Select a value to determine how the rate for this rate code will be derived. Values are:

None: The rate on the rate code table itself is used.

This value uses the current functionality.

Rate Matrix: The value will be derived dynamically from a rate matrix associated with the rate code.

The rate matrix may have multiple criteria that determine different rates to be used.

Note. You can switch between None and Rate Matrix without having to create a new effective-dated row.

Rate Matrix

Select the specific rate matrix to be used.

This field becomes available when the Rate Matrix value is selected in the Calculated By field.

Important! You can only select a rate matrix whose output is compatible with the definition of the rate code. For example, if the rate code has a rate code type of Flat, (which implies a dollar amount), then the rate matrix must have an output of type amount, it cannot have an output that is a percentage, or a string of characters.

See Using Configurable Matrices.

Comp Percent (compensation percentage)

Enter the percentage that will be applied to all base pay components, or a rate code group when new compensation rates for a worker are being derived.

Compensation Rate

Enter the standard compensation rate for this rate code. .

This field is available when you select the value of None in the Calculated By field.

Currency

Enter the currency for each value pertaining to the Calculated By field. .

Frequency

Select a compensation frequency. You cannot select Hourly if the rate code type is Flat Amount. You must select Hourly if the rate code type is Hourly or Flat Amount & Hourly.

Earnings Code

Select an earnings code. An earning code determines how earnings are calculated and taxed. You establish earnings codes on the Job Earnings Distribution page.

Australia

When implementing PeopleSoft Enterprise Salary Packaging for Australia, use this page to define and review the compensation rate codes you will use to package your workers. Compensation rate codes represent the IDs that you use for your pay components throughout your Salary Packaging system.

When defining your salary package components and additional components, you can link them to compensation rate codes to help you enter expenditures for the appropriate components. If you link compensation rate codes to salary package components, you must have a unique rate code for each package component or additional component (identified as an expense payroll type). This enables you to reconcile the package expenditure.

Maintained via Package Only

Select to create a link between a salary package component and the compensation rate code.

If you select this check box, a warning message appears if you manually change a worker’s compensation rate code.

This check box, combined with other information on the worker's Job record, is used to maintain salary package integrity.

Using Rate Codes — Example

If a worker is assigned a rate code that is matrix-based, there will only be an initial evaluation of the rate matrix to determine the compensation rate for that rate code. This is consistent with current rules for rate code management. Over time, worker information may change that could warrant the assignment of a different rate from the matrix. However, the system will not do this automatically. The only way to get rates reevaluated automatically is by running one of the existing batch processes (CMPnnn ). In general most of the these batch processes replicate the processing done by the Default Pay Components and the Calculate Compensation buttons on Job compensation page. If someone manually added a Rate Matrix based rate code, and the "Default Without Override" option is not selected, that rate code will never get refreshed by any process or by pushing the button. If an update is needed, it must be done manually.

Creating Seniority Rate Codes

To administer seniority pay, you must create seniority rate codes.

To create a seniority rate code:

Associate a rate code with the predefined seniority rate code class SENPAY.
Associate the rate code with levels of seniority compensation increase.
(Optional) Associate the rate code with one or more groups that you define using Group Build.

Important! You cannot associate configurable rate matrices to seniority rate codes.

Associating Seniority Rate Codes with Compensation Increases

Access the Comp Rate Code Table - Seniority Pay page.

Calculate Seniority By

Select the type of date on which to base seniority. Values are:

Hire Date

Company Seniority Date: This date tracks the amount of time that a worker has been with a particular company in the organization.

The default date is the hire date, but you can override it.

Birth Date

Professional Experience Date: The date that the worker began working in a job requiring skills that are directly related to the current position.

(JPN) Japan

Educ Lvl-Adjsted Birth Date (education level-adjusted birth date)

Select to calculate education level age-related pay, a type of seniority pay commonly paid by Japanese organizations.

Seniority Pay Group

Group ID

Enter one or more group IDs to associate the seniority rate code with groups that you define using the Group Build business process. The system issues a warning if the ID that you enter is associated with another seniority rate code. When you move out of this field, the name of the group ID appears.

Note. If you do not enter a group ID, the system associates the seniority rate code with every worker's compensation package.

Seniority Pay Compensation

Level	Enter a seniority level
Min. Years (minimum years) and Min. Months (minimum months)	Enter the minimum years and months of service that are necessary to qualify for the seniority level. If you enter both Min. Years and Min. Months, the system uses the total of those years and months in its calculation.
Comp Rate (compensation rate)	This option appears if you select Flat Amount, Hourly Rate, or Hourly Rate + Flat Amount as the rate code type. Enter a compensation rate to associate with this seniority level.
Comp Percent (compensation percent)	This option appears if you select Percent as the rate code type. Enter the compensation percentage to associate with this seniority level.
Points	This option appears if you select Points as the rate code type. Enter the salary points to associate with this seniority level.

Viewing Defaulting Rules Associated with Compensation Rate Codes

Access the Comp Rate Code Table - Combination Rules page.

This page displays the combination defaulting rules that use this rate code.

Edit Defaulting Rules

Click to access the Rate Code Defaulting Rules - Rate Codes page, where you edit the information for the defaulting rules.

Values tab

Access the Values tab.

This page displays the compensation rate, currency and frequency as defined on the defaulting rule.

Note. This page only displays combination defaulting rules, not salary step and job code defaulting rules.

Defining Groups of Rate Codes

To set up rate code groups, use the Rate Code Groups (RATE_CODE_GROUPS) component.

This section provides overviews of rate code groups and discusses how to create groups of rate codes.

Understanding Rate Code Groups

After you have defined rate codes, you can optionally set up rate code groups. Using rate code groups, you can:

Be specific when calculating percentage-based pay components as part of your worker compensation packages.

For example, a worker’s base compensation package may be made up of the following components: base pay, cost of living, child-care cost, and commuting cost.
Calculate a bonus amount based only on certain parts of a worker's compensation package, as opposed to the entire package.

You may want to do this if a percentage-based bonus is part of a worker’s compensation.
Bundle base-pay components that you want the system to use in its calculation, excluding other pay components.

Note. Before you can use groups of rate codes, you must select the Use Rate Code Groups check box on the HRMS Options page of the Installation component.

Understanding Percentages and Rate Code Groups

You can associate a rate code group with a percentage rate code. If you do this, the system applies that percentage to all the rates in the rate code group; it adds the total to a worker’s compensation package. If you decide not to use rate code groups, you can calculate percentage rates using a worker’s entire base-pay compensation package.

When you implement a pay increase for a worker, you can specify that the worker is to receive a percentage increase of base pay, as defined in the rate code group. When the system calculates the value of the increase, its calculation is based on the different pay rates that are associated with the base-pay rate group.

You can associate a rate code group with a percentage rate code:

In a salary step on the Salary Step Components page of the Salary Grade component.
With a job code on the Default Compensation and Non-Base Compensation pages of the Job Code component.
At the worker level on the Job Data - Compensation page.

Page Used to Create Groups of Rate Codes

Page Name	Object Name	Navigation	Usage
Rate Code Groups	COMPRT_GRP_PNL	Set Up HRMS, Foundation Tables, Compensation Rules, Rate Code Groups	Create groups of rate codes.

Use Highest Rate	Select to use the highest rate of pay for this rate code. Use this option when a worker is temporarily placed in another job that is paid at a higher rate. This field does not affect human resources processing. For Payroll for North America: When you assign rate code at the job level, you can enter a compensation rate that differs from the rate defined on the rate code table. If you clear this check box, the rate that you specify at the job level overrides this rate.
Apply FTE (apply full-time equivalency)	Select for the rate code to be calculated as part of FTE. FTE is the percentage of full time that a worker normally works in the corresponding job. Full time is defined in the Standard Hours and Standard Work Period fields on the Salary Plan table. Alternatively, it can be defined in the default Standard Hours and Standard Work Period fields on the Installation table. For Payroll for North America: Select to include full time equivalency in the job in the calculation of a base pay rate. You can select this check box only when the rate code type is Flat Amount or Hourly Rate. This check box does not apply to non-base-pay rates; it is unavailable for entry if you clear the Base Pay check box.
Default Without Override	Select to ensure that compensation rate of the workers assigned to this rate code cannot be manually updated on the Compensation page of the Job Data component. You must select this check box for seniority rate codes. Note. We do not recommend clearing this check box for a rate code used as an absorbable premium on the Salary Plan table after the rate code has been added to worker compensation packages.
Rate Code Type	Select a compensation rate type. Depending on the type you select, certain fields become available for entry. Values are: Flat Amount: A fixed (or “flat”) amount. Hourly Rate + Flat Amount: A flat amount that is paid in addition to the hourly rate that is specified on a worker’s timesheet. Enter the flat amount in the Compensation Rate field. This type cannot be a base-pay component. Hourly Rate: An hourly rate of pay. Percent: A percentage for use in defining compensation. Points: This type of rate code is paid using salary points instead of currency. The monetary value of each point is set up on the Company Table page. Note. To use points, select the Salary Points check box on the Installation Table - HRMS Options page. See Setting Up Implementation Defaults.
Rate Code Class	Select a rate code class to associate with the rate code. Values include: Elements of Base Salary (BASSAL): Used in salary forecasting. Defined Range Rate Codes (DFRPAY): Used for pay components that are based on grade ranges within salary plans. Regular Bonus (REGBON): Used in salary forecasting. Seniority (SENPAY): Enables you to create seniority pay components, associate them with levels of pay increase, and update them according to changing seniority status. Note. If you have created additional rate code classes, you can select one of the delivered values described previously or one of the values you created.
Calculated By	Select a value to determine how the rate for this rate code will be derived. Values are: None: The rate on the rate code table itself is used. This value uses the current functionality. Rate Matrix: The value will be derived dynamically from a rate matrix associated with the rate code. The rate matrix may have multiple criteria that determine different rates to be used. Note. You can switch between None and Rate Matrix without having to create a new effective-dated row.
Rate Matrix	Select the specific rate matrix to be used. This field becomes available when the Rate Matrix value is selected in the Calculated By field. Important! You can only select a rate matrix whose output is compatible with the definition of the rate code. For example, if the rate code has a rate code type of Flat, (which implies a dollar amount), then the rate matrix must have an output of type amount, it cannot have an output that is a percentage, or a string of characters. See Using Configurable Matrices.
Comp Percent (compensation percentage)	Enter the percentage that will be applied to all base pay components, or a rate code group when new compensation rates for a worker are being derived.
Compensation Rate	Enter the standard compensation rate for this rate code. . This field is available when you select the value of None in the Calculated By field.
Currency	Enter the currency for each value pertaining to the Calculated By field. .
Frequency	Select a compensation frequency. You cannot select Hourly if the rate code type is Flat Amount. You must select Hourly if the rate code type is Hourly or Flat Amount & Hourly.
Earnings Code	Select an earnings code. An earning code determines how earnings are calculated and taxed. You establish earnings codes on the Job Earnings Distribution page.