Earnings Code Training PowerPoint Presentation - Rutgers

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Welcome to the Earnings Code Training for Legacy UMDNJ positions

This training provides the basics that are essential for proper Earnings Code pay administration. You will become familiar with administrative guidelines and procedures for Earnings Code payments. General Earnings Code descriptions and information are provided to ensure proper pay administration and payment of wages by Management and Department Timekeepers.

Prepared by Compensation Services“Our goal is to provide you with excellent customer service to meet the needs of your

organization.”

Table of Contents

Background Page 3

Objectives Page 4

Accountability Page 5

Identifying Roles Page 6

Why are Earnings Codes Established? Page 7

Compensation Regulations Page 9

Base Pay Page 10

Fair Labor Standards Act (FLSA) Page 11

Shift Differential Page 14

Pensionable Earnings Page 16

Earnings Code Process Page 17

Earnings Code Table Overview Page 19

The University-wide Earnings Code Table Page 21

Timesheet Examples Page 35

Conclusion Page 37

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Background

• Human Resources Compensation Services Payroll Departments collaborated to develop a comprehensive online training program for staff who enter this information on timesheets.

• Human Resources Compensation Services Office conducted a Earnings Code Survey which included all operating units and obtained data from management and supervisors on:

– frequency of use– problems in identifying which earnings codes to use– reference tool preferences– training needs.

• Vital information for this project was researched and validated. As a result, inactive Earnings Codes were deleted and additional Earnings Codes were created that were essential.

• The results of the survey were used to develop our training to clearly document pay practices, diagnose usage problems, and ensure data integrity so that Management and Department Timekeepers could make informed decisions.

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Human Resources/Payroll Earnings Code Training

• Provide the pay policy guidelines and procedures for managing established Earnings Code Compensation

• Define Earnings Code pay eligibility

• Define proper usage of Earnings Codes

• Prevent misuse of Earnings Codes

• Ensure compliance with FLSA regulations and union contracts

• Capture information needed for an automated time and attendance system

Objectives:

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• Both Management and Department Timekeepers must be stewards over the budgets they monitor

• Earnings Code transactions must be accurate to appropriately reflect the actual calculation and payout

• Earnings Codes must be monitored by departments for accounting, budgeting, and compliance purposes and to audit and track expenditures

Accountability:

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• The Human Resources Compensation Services Office

Establishes policies and practices which enhance our ability to maintain competitive pay levels in the industries in which we compete for similar positions.

• The Department of Payroll

Maintains the central employment records that show the hours worked, gross wages, taxes, deductions and net wages for each employee.

Earnings Codes are a way of distinguishing the payments made to employees.

Identifying Roles:

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Why are Earnings Codes Established?

• For the business needs of operating units.

• To identify costs for premium overtime pay and additional compensation that is established for a specific time period the work is performed or for a specific work assignment.

• To identify work performed outside of the regular daytime or standard workweek work schedules which command extra pay in the markets in which we compete (i.e. evening/night shifts, per diem work, etc.).

• For special pay practices that compensate non-exempt, hourly employees for work hours that are hard to recruit for, unique work schedules or special assignments (i.e. charge pay).

• Earnings Codes are established for on-call pay given to employees who are off site and must respond to work-related assignments for a scheduled on-call period.

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• Our organization has multiple pay structures within our over-all salary program as you will see on the Human Resources Earnings Code Table to follow.

• Earnings Codes systematically separate types of payments for accounting, cost analysis and budgeting purposes.

• Different groupings of positions such as nurses, technical, clerical, support, and professional personnel reflect different compensation levels due to supply and demand in the market.

• Payments may be given to employees who are scheduled to be on-call in accordance with the business needs of the operating unit.

• Many of our Earnings Codes are used primarily in operating units with 24/7 operations.

• There are limited instances when additional pay is provided to exempt employees.

Why Are Earnings Codes Established?

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Compensation Regulations

We will now provide an overview of regulations that impact Compensation for non-exempt and exempt employees.

• Base Pay • Fair Labor Standards Act • Shift Differentials• Pensionable Earnings

These regulations are taken into account when earnings code paypractices are developed.

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Base Pay

Base pay is regular wages or salary without overtime, shift differential, or other remuneration. There are other established pay rates that are part of an employee’s total compensation.

Non-ExemptBase pay is the regular hourly rate paid to a non-exempt employee.

ExemptFor exempt employees, base pay is a pre-determined, fixed salary amount.

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Fair Labor Standards Act (FLSA)

Wages include all amounts due for labor or services performed by an employee. Wages may be fixed or determined by time, job or other methods.

The Fair Labor Standards Act (FLSA) is a Federal law governing:● minimum wage,● overtime pay, ● equality in pay, ● child labor,● and recordkeeping.

FLSA regulations must be followed when calculating pay for non-exempt employees.

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Please note that:

Non-exempt (hourly) employees are covered by the overtime pay provisions of the Fair Labor Standards Act (FLSA) and must be paid for all hours worked.

By law, non-exempt employees are paid time-and-a-half for all hours worked in excess of 40 per week.

Since we are a public employer, compensatory time at time-and-a-half may also be given to non-exempt employees in lieu of overtime pay.

Sick time hours are exempt from the overtime calculation.

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The Fair Labor Standards Act (FLSA), also known as the Wage and Hour Law has implications for Payroll that must be taken into account, such as paychecks, overtime pay, withholding allowances, taxes, payment practices, and recordkeeping.

Most differentials such as shift differential, float differential, and charge pay are included in the calculation of premium overtime.

These are all taken into account when Payroll processes Earnings Code transactions.

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Shift Differential Guidelines

Eligible staff employees in Legacy UMDNJ positions who are formally assigned to work the evening and night shifts are provided with shift differential pay. A job classification’s eligibility or ineligibility for shift differential will be determined by the Human Resources Compensation Services Office at the time the job is established.

Shift differentials are based upon market practices, FLSA (Fair Labor Standards Act) status, contractual obligations and other appropriate considerations. It is only provided to employees scheduled to work on these shifts in accordance with policy.

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Shift Differential Guidelines

The controlling factor for entitlement to shift differential compensation is the time the work is performed and the amount of hours worked during that period.

• If an employee who is in a position eligible for shift differential pay works at least half of his/her work hours (excluding overtime) between 3 PM and 6 AM, the shift differential must be paid for the entire shift.

• If the employee works less than half of his/her shift (excluding overtime) between 3 PM and 6 AM, no shift differential will be paid.

Policy: 30-01-30-80:00

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Pensionable Earnings

Pensionable Earnings are earnings subject to pension and group life insurance contributions for retirement and death benefits which are calculated on the employee’s salary and do not include extra compensation as defined in the state pension regulations.

Please note: Additional earnings are regarded as extra compensation and not subject to pension and group life insurance contributions. These include, but are not limited to; overtime, straight time overtime, on-call hours, call-in hours, out-of-title, shift differential or lump sum payments.

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Earnings Code Process

• Most of our Earnings Codes are manually recorded on the employee’s timesheet.

• There are some Earnings Codes which are for “Payroll Use Only” that you will not need to use. They will not appear on the timesheet but will appear on the paycheck and on the employee self service site (i.e. tuition reimbursement, out-of-title pay and additional compensation).

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Earnings Code Process

• Non-exempt employees’ hours should be filled in on the timesheet completely totaling up to their total workweek hours. All regular hours worked, straight time overtime hours, overtime hours worked after 40, differentials and leave time, etc. should be recorded with the correct Earnings Code. Refer to our timesheet examples that follow.

• Exempt employees do not fill in daily hours worked on the timesheet.

• Exempt employees should only record appropriate benefit leave time (vacation, sick, etc.) in the appropriate day of that pay period.

• Please refer to the various Human Resources Policies for entitlement for sick time, vacation, bereavement, and float holiday pay to ensure an employee is eligible to receive payment.

• Please note: Bereavement pay is taken from the sick leave benefit time utilizing Earnings Code 040 in accordance with Policy (30-01-40-15:00).

• Use Earnings Code 950 or 955 for Worker’s Compensation time reporting, which must be verified and approved by Risk and Claims prior to payment.

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The Timesheet & Human Resources Earnings Code Tables

We will now provide an overview of the Timesheet and Human Resources Earnings Code Tables. Used properly, these tools will help to prevent

misuse of Earnings Codes.

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It is important to know that there are three components that make up our Master Earnings Code Table in BANNER:

• The Human Resources Earnings Codes which focus on eligibility for payment and apply to the specific job category and special pay practices. These Earnings Codes are entered on the employee’s timesheet.

• The Timesheet Earnings Codes encompassing general pay transactions for all employees.

• Payroll Use Only Earnings Codes that are used by Payroll staff.

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The Timesheet Earnings Code Table

The Legacy UMDNJ Code Table for Staff positions illustrated below is a listing of the Earnings Codes. Use this as a reference tool when completing your department’s timesheets.

The table is comprised of seven columns which show: • The Earnings Code to be put on the timesheets• The Short Name coded in BANNER• The Long Name coded in BANNER• The compensation Amount that is associated with each code• The Fair Labor Standards Act (FLSA) Status for which the code

applies• The Union the code falls under• The intended purpose of each pay practice in the description.

Earnings Code Short Name Long Name Amount FLSA Status Union Description

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On the next slide:

• Under Earnings Code, 001 is used for Regular Pay. This is the code that should be recorded on the timesheet.

• The Short Name column shows the abbreviated name of the 001 Code which is found on the employees’ pay stub.

• The Long Name column, describes the full description in BANNER.

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Earnings Code Short Name Long Name AmountFLSA

Status Union Description

Earnings Code Short Name Long Name001 REG PAY Regular Pay002 JURY DTY Jury Duty Pay005 UN ACTVS Union Activities-Regular014 COMPTIME Comp Time Taken026 SICK PAY Sick Pay

040 BEREAVE Bereavement Pay

045 SCH_SICK Scheduled Sick Pay051 VACATION Vacation Time061 STOT Straight Time Overtime

101 HOLIDAY Holiday Pay105 FLOATHOL Float Holiday Pay

106 HOLIDAYHoliday Pay Non-Premium

GF/TD110 OVERTIME Overtime120 OVT CALL Call-In Overtime122 HOL PREM Holiday Premium Pay127 Weather Non-Essent'l Inclement/weather128 Weather Essential Inclement Weather180 CONFERNC Conference/Class/Seminar

950 WORKRCMP Worker's Compensation Hours

955 SICK/WC Sick/Worker's Comp-Police


Earnings Codes for Timesheet Use

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On the next slide, the Amount, FLSA Status, and Union Columnsare shown.

• Some of these fields are not applicable because there is no corresponding dollar amount designated for the code.

• For example, Regular Pay is associated with all employees in Legacy UMDNJ positions and will be different for each employee.

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Amount FLSA Status UnionNA NA NANA NA NANA NA NANA NA NANA NA NA

NA NA NA

NA NA NANA NA NANA Non-Exempt NA

NA NA NANA NA NA

NA Non-Exempt

HPAE Nurses, HPAE Prof,

CWA & Teamsters

NA Non-Exempt NANA Non-Exempt NANA Non-Exempt NANA NA NANA NA NANA NA NA

70% of base pay NA NA

100% of base pay Non-Exempt

University-wide Codes for Timesheet UseEarnings Code

001002005014026

040

045051061

101105

106110120122127128180

950

955

Earnings Code Short Name Long Name AmountFLSA Status Union Description

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In the following slide, the Description Column provides a detailed explanation of the Earnings Code pay practice which allows you to understand the intended purpose for each code.

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DescriptionCompensation for regular earnings reported by employeesTime served for jury duty; 100% of salaryLabor Relations approved union conferences, seminars, etcHours paid for compensatory time usedUsed to report time eligible employees who are excused from work with pay for illnessUsed to report time eligible employees who are excused from work with pay for a death in the familyUsed to report pre-approved time eligible employees who are excused from work with pay for illnessUsed to report time eligible employees who are off from work with pay for vacationHours between base hours and 40 hoursUsed to report time eligible employees who are off from work with pay for University recognized holidaysUsed to report time eligible employees who are off from work with pay for float holidays

Used for scheduled hours worked for Good Friday and the day after Thanksgiving, for non-premium holiday pay, counts towards 40 hr workweekHours paid at time and a half over 40 hoursOn-call, hours put employee above 40 hours. Time + 1/2 for 4 hoursApplies to all employees, except eligible 12 hour shift employees under Earnings Code 107Hours worked by non-essential staff on days the University is closed due to inclement weatherHours worked by essential staff on days the University is closed due to inclement weatherHours paid for attending a conference, class or seminar

Staff excluding Police and Sergeant - 70% salary for Workers Comp sick leave injury

Used to pay Police Officers and Sergeants on Workers Comp sick leave injury

Earnings Code001002005014026

040

045051061

101105

106110120122127128180

950

955


Earnings Codes for Timesheet Use

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Some frequently used Legacy UMDNJ Earnings Codes are pre-printed on the timesheets, such as Regular Pay and Sick Pay. For these instances, you only need to record the actual hours applicable for that code. All extra hours should be recorded under 061 straight time overtime, or 110 overtime, hours over 40. Codes that are not pre-existing on the timesheet will have to be manually recorded, along with the applicable hours for that code.

Exempt employees will have “X’s” marked for all fields where you would record the hours and the associated code. In the event of, for example, a sick or vacation day, it should be recorded on the day that the time was used in order to correctly note leave time taken. An exempt employee’s sick, vacation, or float holidays may be reported as a partial day, i.e. ½ day (S) for Sick or in hours, i.e. 2 hours (FH) for Float Holiday.

A non-exempt employee, however, must have his/her hours reflected along with the code.

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The Earnings Code Table

This is a management tool used across the University that complements the Earnings Code Training. The Human Resources Earnings Code Table depicts pay rates that reflect pay practices and costs associated with employment.

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The Human Resources Earnings Code Table

• The Human Resources Earnings Code Table has been organized by Job Type/Bargaining Unit Category.

• Each Earnings Code pay practice is listed on the Human Resources Earnings Code Table.

• The table is comprised of columns indicating the:

• Earnings Code numbers, placed on the employee’s timesheet

• Short and Long Names in Banner• Compensation Amount• FLSA Status• Union• Description.


139 SHF LO68Shift Diff Local 68 $2.00/hr Non-Exempt

Operating Engineers Differential paid for Evening/Night shift

International Union of Operating Engineers Local 68

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• The description on this table describes the pay practice, provides job title eligibility and a capsule explanation for applying payments. Please refer to the Union contract links found on the UHR website for detailed information. http://uhr.rutgers.edu/policies-resources/collective-negotiations-agreements

• If an Earnings Code applies to more than one union, it is specified in the Union Column.

• The correct Earnings Code number and employee’s hours should be recorded on his/her timesheet.


154 SHF DIFFShift Diff Local 97 $2.00/hr Non-Exempt Teamsters Differential paid for Evening/Night shift

Teamsters Local 97

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The Union Column identifies specific Earnings Codes, which are grouped together by Bargaining Unit.

Within each group, the codes that are non-job title specific are listed first, followed by the codes that are specific to one job title/pay practice.

You can see that the table is comprised of the same columns used in the Timesheet Earnings Code Table.

However, this table illustrates a detailed explanation of the pay practices for applying payments to specific job titles.


163 ShiftStaff Nurse

shift diff $3.50/hr Non-ExemptHPAE Nurses Evening/Night shift differential for Staff Nurses

Health Professionals and Allied Employees - HPAE Local 5089 (Registered Nurses)

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For example, your department has a Staff Nurse who is scheduled to work weekend hours:

The Staff Nurse title is an HPAE Nursing title, so you would first look for that Category on the table.

Then refer to column three, the Long Name Column, and search for the Staff Nurse specific codes.


169 WKENDDIFStaff Nurse Wkend diff $1.50/hr Non-Exempt

HPAE Nurses Weekend shift differential for Staff Nurses


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You will see that Code 169 is used for payment of the Staff Nurse Weekend Differential rate, which is outlined in the Amount Column.

Before recording the Code on the timesheet, read the Description column to ensure the Code is being used for its intended purpose.

In this example, you would record the 169 Code on the timesheet with the number of weekend hours that were actually worked. This would supplement the number of hours that were recorded under regular pay, Code 001.

Payroll will data enter the code and hours based on what is recorded. This will generate the Weekend Shift Differential pay.

Earnings Code Short Name Long Name Amount FLSA Status Union Description169 WKENDDIF Staff Nurse

Wkend diff$1.50/hr Non-Exempt HPAE

NursesWeekend shift differential for Staff Nurses


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Please refer to the following Staff Nurse timesheet example for a two week pay period, coded with Regular Pay (001), Weekend Staff Nurse Shift Differential (169), and Overtime Hours in excess of 40 (110).

Regular Pay for Wk 1

# of Hours at Regular Pay for Wk 1

Employee Worked 5 Overtime Hours in Wk 2

Employee Worked 9 Hours on Saturday in Wk 1 and Will Be Paid Weekend Shift Differential

Employee Enters Own Hours Each Day

Total Hours are Actual Hours Worked (not lunch)

# of Overtime Hours after 40 Worked for Wk 1

Regular Pay for Wk 2

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The following is an example of a standard timesheet for a non-exempt employee for a two week pay period which indicates Regular Hours (001), Straight Time Overtime (061), and Overtime Hours in excess of 40 (110).

Regular Pay Only Includes Regular Hours

Straight Time Overtime Up To 40 Hours for Wk 1

# of Overtime Hours After 40 Worked for Wk 1

Employee Called in Sick Still Indicate # of

Hours for Scheduled Day

Indicate # of Hours of Sick Time Used

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This concludes our online training.

You may replay the presentation or sections of it as needed.

Individual Training Sessions will be scheduled for high-use areas and as requested to provide the opportunity for us to answer your questions. If

you want to request a Session, please contact:

April 2013

Transforming the Delivery of Human Resources

Documents

Earnings Code Training PowerPoint Presentation - Rutgers