Pay Rate Rules

Pay rate rules are conditions of a pay agreement that determine the rate of pay to which a payee is entitled for performing a specific job role.

After all the applicable conditions of each applicable pay code rule have been applied, thereby determining the applicable pay codes and allocating time/units against each of those pay codes, the system references the applicable pay rate rules in order to determine the pay rate for each applicable pay code.

In Rates and Rules, a pay rate rule within an agreement is configured by defining the following:

pay code to which the rule applies
agreement hierarchy level and hierarchy value to which the rule belongs
validity period of the rule
type of rounding to be applied to the pay rate
pay rate type(s).

A Calculation Only flag can be set on a pay rate rule if the pay rate of the flagged rule will only be used to define a base rate of payment. Where the Calculation Only flag is enabled on a pay rate rule, no payment is made against the pay code referenced by the flagged rule itself. Instead, the pay rate defined by the flagged rule is used in the calculation of the pay rate for other pay rate rules. This allows a pay rate to be based on a combination of pay rates for different pay codes without paying against the pay code that defines the base pay rate. This helps to limit the number of individual pay items on payslips, thereby making payslips easier to understand.

The pay rate of a pay rate rule can be based on a calculation that is applied to the pay rate defined by another pay code. A pay rate rule can be configured in this way by setting the pay rate type of the pay rate rule to Calculation. When such a pay rate type is used, you can select the pay code that determines the base rate to be used in the rate calculation.

Pay rate rules can be created only for those pay codes for which there are pay code rules within the pay agreement. The exception to this are pay rate rules that are used for the calculation of a base pay rate only (for more information, see above), which can be created for any pay code. Multiple pay rate rules can be configured within a single pay agreement.

Once the secondary interpretation process has applied the pay rate rules, the results are passed to the Pay module to allow a payee's earnings to be calculated.

Hierarchy Level and Hierarchy Value

The hierarchy level determines the level of the agreement hierarchy to which the pay rate rule belongs. The hierarchy value is the actual object to which the rule is assigned at the selected hierarchy level. For example, if the rule is assigned to the brand level of the agreement hierarchy, the hierarchy value is the name of the agency brand to which the rule applies.

Rates and Rules determines which pay rate rule within an agreement will determine the applicable pay rate by referencing the Rate Determinator Type field on the agreement header. If the field is set to Lowest Hierarchy Level, Rates and Rules applies the lowest hierarchy level pay rate rule that is valid. If the field is set to Highest Rate Value, Rates and Rules applies a valid pay rate rule that defines the highest monetary rate, regardless of the hierarchy level to which the rule belongs. If the field is set to Lowest Rate Value, Rates and Rules applies the rate rule that defines the lowest monetary rate, regardless of the hierarchy level to which the rule belongs.

The pay agreement header is also assigned to a hierarchy level and a hierarchy value. Pay rate rules cannot be assigned to a hierarchy level that is higher than that of the agreement header. If the hierarchy level of a pay rate rule matches that of the agreement header, the hierarchy value must also match that of the agreement header.

For example, if the agreement header is assigned to the Brand hierarchy level and the corresponding hierarchy value is FastTrack Recruitment Global, a pay rate rule cannot be assigned to the Country hierarchy level because that is a higher hierarchy level than Brand. A pay rate rule could be assigned to the Brand level but in that case the hierarchy value would need to be FastTrack Recruitment Global because the hierarchy value of the pay rate rule must match that of the agreement header if the hierarchy levels are the same. Alternatively, a pay rate rule could be assigned to any hierarchy level below the Brand level, such as Client, in which case the hierarchy value can be set to any appropriate value.

Note that whether a pay/bill rate rule is valid depends on the validity period of the rule (for more information, see below).

Hierarchy Group

A pay rate rule can also be assigned to a hierarchy group, which is an additional, customisable category that can be used in conjunction with hierarchy levels and hierarchy values to determine if a pay rate rule is applicable. For example, in addition to being assigned to a hierarchy level and hierarchy value, a pay rate rule may also be assigned to a hierarchy group. To determine if a pay rate rule is applicable when a pay item is processed during pay interpretation, the system searches the agreement hierarchy based on a combination of hierarchy level, hierarchy value and hierarchy group to find a matching pay rate rule. If a match is not found based the combination hierarchy level, hierarchy value and hierarchy group, the system will perform a second parse of the hierarchy for a match based on hierarchy level and hierarchy value only.

It is not mandatory to assign a pay rate rule to a hierarchy group and you can only assign a pay rate rule to a hierarchy group if hierarchy group functionality is enabled in Maintenance > Hierarchy > Country Settings > Hierarchy Group.

Hierarchy group functionality can be labelled to suit the terminology required by your business and the country to which it applies. This can be configured in Maintenance > Hierarchy > Country Settings > Hierarchy Group.

If any pay rate rule is assigned to a hierarchy group, the Hierarchy Groups Assigned to Rates field is ticked on the agreement header to indicate that one or more rules are assigned to a hierarchy group.

Validity Period

Each pay rate rule has a validity period. The validity period defines the date on which a pay rate becomes valid and the date on which the rule expires. Note that the validity period is critical in determining the rate rule to apply, especially if rate rules within an agreement are assigned to different levels of the agreement hierarchy. For example, consider the following scenario:

Timesheet Period: 26/10/2009 – 01/11/2009 (Mon-Sun)

Client Rate Valid: 01/01/2009 – 31/12/2009

Job Order Rate Valid: 28/10/2009 – 10/11/2009

Assuming that the rate determinator type was set to Lowest Hierarchy Level, the following would apply:

for the dates 26/10/2009 & 27/10/2010 (Monday and Tuesday) the client rate would apply
for the dates 28/10/2009 – 01/11/2009 (Wednesday until Sunday) the job order rate would apply.

Only one pay/bill rate rule with the same pay/bill code can be created at any given agreement hierarchy level/hierarchy value within a given validity period. The exception to this are pay rate rules that apply top-up rates.

Rounding

A pay rate rule defines how the pay result of the pay rate rule is to be rounded. That is, the pay result can be rounded up or down to a specific number of decimal places or it can be truncated to a specific number of decimal places.

Rate Type

A pay rate type defines how the pay rate is determined. For example, the rate may be a flat rate, based on a calculation or the rate may be based on the payee's specific rate. It is possible for one pay rate rule to define different rate types depending on specific conditions that apply.

Rate Description

A textual rate description can be added against individual sub-rules of a pay rate rule so that when a payment is made as a result of applying a specific rule, the description of the pay rate can be printed on the payee's payslip. This is useful if, for example, a rate is a loaded rate that incorporates a base rate and additional loadings. Where this is the case, a rate description can be added so that whenever that rate is paid, a description of the base rate and any applicable loadings can be printed on a payee's payslip.

The rate description that applies to a pay item is visible and, subject to security permissions, editable in the rates matrix on a job order in Recruitment Manager.

The following applies to rate descriptions:

they are optional
they can be a maximum of 60 alphanumeric characters in length
they cannot be defined if the pay rate rule is flagged as Calculation Only
they are locked down (un-editable) once the are transactions that are linked to the pay rate rule
if a pay item is paid against a pay code that is linked to a base rate pay rate rule and a top up pay rate rule, the rate description is taken from the top up rate rule, because that is the rate rule that will determine the final, loaded pay rate
when the Back Pay process is used in the Rates and Rules module, if a rate description exists against a pay item on a pay rate rule that is retrospectively updated, the rate description will be copied to the new pay rate rule that is created to affect the retrospective rate change
they cannot be defined for non-timesheet based pay items including manual pay items, which have been added in a pay batch or the Interpreter Results > Interpreter Review module, leave payment items and termination payment items.