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How To: Pay for Holidays
1. BackgroundThere are several options for paying employees for Holidays in The Logger's Edge. Depending on the practice employed by your company, you should adopt the option that best suits your operation.
2. Case by Case ExamplesCase 1: Employee does not work on a Holiday.
In order to pay a worker for a holiday where he does not work, you would enter a time slip, and select the activity as Holiday. The activity Holiday should be one of your standard pay activities.
When you enter a time slip, you enter Holiday as the activity:
You should probably set the block and revenue contract to an internal block or contract, unless you want to charge the holiday pay against a specific block or revenue contract.
If
an employee does not qualify for holiday pay, you can just skip
entering 8 hours of holiday for that employee.
You would then run your employee calculator and review his vendor statement:
Note that for January, 2nd, 2006, Alan Jackson has been paid for 8 hours of holiday pay. The rate that applies to the Holiday hours is generally the worker's base rate, unless you have set up an activity pay differential.
The
base rate may be modified if you have set up the day be an explicit
Holiday and you have set up a Holiday factor to apply to time recorded
on a Holiday. What does this mean?
In The Logger's Edge you can explicitly set up your Holidays.
Navigate to Setup | Holidays from the main menu:
In this window, you can set up each of your holidays.
Note that
you do NOT need to enter your holidays here if you just want to pay a
guy for holidays at his base rate. The holidays in this grid are
used to determine whether or not a 'Holiday' premium should be applied
to the base rate.
In the pay activities grid above, the Holiday activity has a 'Pay Type' of NON WORK. If you navigate to Setup | Pay Activity Types, you will see each 'Pay Type' in The Logger's Edge.
Each pay type is listed in column (1). In the Holiday Factor column, there is an adjustment factor (multiplier) that is applied to the worker's base rate for time recorded on a holiday. In the grid above, 'NON WORK' time is accorded a fact or 1.00 -- meaning no adjustment is applied (the base rate is multiplied by 1.00). The Holiday factor is applied for those days that are explicitly set up as holidays.
To summarize: If you explicitly set up a day as a holiday, and apply a Holiday factor of 1.00, the applicable pay rate will be the employee's base rate.
Reminder:
Even if you explicitly set up your Holidays (say, January 2nd, 2006),
you still must enter an employee time ticket for that date in order to
specify the number of hours the employee should be paid for that date.
There is not an automatic calculation for Holiday pay based solely on
the identification of holidays.
Case 2: Employee works on a Holiday.
Alternative A:
Now, let's suppose an employee works on a Holiday and you want to pay him for 8 hours of Holiday time and for the hours he works at time-an-a-half.
You first enter the Holiday time slip as above:
Next, you enter a time slip for the time actually worked:
In the slip above, Alan Jackson has worked 6.00 hours of regular production time and 0.50 hours of maintenance time for a total of 6.50 hours. Now, if we run the employee pay calculator and look at the employee statement, we see the holiday pay at the base rate of $23.00/Hr and the production time (Bunch/Falling and Maint) paid at 34.50/Hr (34.5 = 1.5 x 23).
Thus, in the statement above, we have achieved the object of paying the guy for 8 hours of Holiday and 6.50 hours at time-and-a-half.
The 1.5 adjustment factor to the rate comes from the Holiday factor in the pay types grid:
Note that both EQ_MAINT and REG_PROD types are accorded a Holiday multiple of 1.5.
Alternative B:
Now, let's suppose that you pay an employee for a shift worked on a holiday at double-time-and-a-half for all the hours worked. For example, if a guy works 9 hours, he gets paid double-time-and-a-half for all 9 hours; if he works 6 hours, double-time-and-a-half for the six hours.
First, you enter a time slip for the time actually worked:
In the slip above, Alan Jackson has worked 6.00 hours of regular production time and 0.50 hours of maintenance time for a total of 6.50 hours.
You do not need to enter a time slip for Holiday time under this alternative; just enter the single slip for the employee.
Next, you need to set the Holiday Pay factor to 2.50 in the Pay Types grid:
This setting will multiply the employee's base rate for production time by 2.50 (double-time-and-a-half).
Now, if we run the employee pay calculator and look at the employee statement, we see production time (Bunch/Falling and Maint) paid at 57.50/Hr (57.5 = 2.5 x 23).
Thus, in the statement above, we have achieved the object of paying the guy for 6.5 hours hours at double-time-and-a-half.
The difference between this alternative and Alternative A is that only time actually worked is paid under Alternative B, whereas under Alternative A, the employee always gets at least 8 hours at his base rate. Of course, if the employee works more than 8 hours, Alternative B pay out at double-time-and-a-half for the hours over 8; alternative A only pays time-and-a-half for the hours over 8.00.
Of
course, under Alternative B, you can always add additional holiday hours
if the employee actually works less than a full 8-hour shift.
How do I handle an Employee who does not Qualify for Holiday Pay?
If an employee does not qualify for Holiday pay (perhaps he or she has just been hired), The Logger's Edge allows you to exclude he or she from getting paid for holidays.
In Case 1 above, where you are handling Holiday pay by adding a Holiday time record for each worker, you simply omit that record from ineligible works.
In the case where an employee actually works on a Holiday and would normally receive a differential (say time-and-a-half), you can stop The Logger's Edge from paying a differential by flagging the employee as ineligible for holiday pay.
This option is not normally enabled by default and must be added to the employees table in the Edit Data Setup table. The flag 'IS_QUALIFY_FOR_STAT_PAY' is used to indicate which employees qualify for Holiday pay. If this flag is not enabled, The Logger's Edge uses a default of 'always eligible' for all employees. When this flag is enabled, you can select who is eligible and who is not. You can also make a change to a worker's status if his or her eligibility changes.
In the employee's grid, the 'Qualify for Stat Holidays' determines whether or not the 'Holiday Factor' is used to pay a premium to an employee who works a holiday.
Interaction With Overtime Rules
Case 1: Employee does not work on a Holiday.
In the examples above, let's suppose we have an overtime rule that pays time-and-a-half for hours over 40 hours week. In Case 1, Alan Jackson was paid for 8.00 hours of Holiday and 34.00 of regular production time for a total of 42.00 hours for the week. Does this total, entitle Jackson to overtime under the 40 hour rule?
The answer is that it depends on the 'Apply to Overtime' setting in the Activity Types grid for each type of time.
In the grid, 'NON WORK' time is unchecked, so Holiday time (which is non-work time) does not get counted in the hours for overtime. Thus, in the example, Jackson's qualifying hours would only be 34.00 hours. If, you checked the 'Apply to Overtime' checkbox for NON WORK time, the 8 hours of Holiday would be included in the total for overtime, giving a total of 42.0 hours and making Jackson eligible for 2.0 hours of overtime pay.
Case 2: Employee works on a Holiday.
If an employee works on a Holiday and you select Alternative A from above (meaning you put in 8 Hours for Holiday and his actual hours worked of 6.5 hours), his total hours for the week would be 48.5 hours (42.0 hours as in Case 1, plus 6.5 hours). If the overtime limit is 40 hours per week, how many hours of overtime does Alan Jackson have?
Again it depends. If the Holiday time is excluded from the overtime calculation (based on the checkbox in the Pay Types grid), then the total eligible hours would be 40.5 Hours. Now what about the 6.5 Hours worked on the Holiday? The Logger's Edge has a default programmatic rule that says that if time is paid a premium for a holiday (meaning it has a Holiday factor of greater than 1.0, then do not count that time for overtime calculations. Thus, in our example, the 6.5 hours worked on the Holiday would not be classed as overtime eligible because the holiday factor is set to greater then 1.00. Thus, in this case, Alan Jackson's overtime eligible hours would only be 34 hours, so no overtime would be calculated.
Now of course, there is a setting that can be used to override the programmatic rule.
In Basic Setup, there is a checkbox to force all Holliday hours to count for overtime, regardless of the Holiday pay factor. (In order to qualify for this treatment, the time must be otherwise eligible for overtime, as indicated by the 'Apply to Overtime' checkbox in the Activity Types grid. Thus, if NON WORK time does not qualify for overtime, the 'Holiday Hours Count for Wkly/Mnthly Overtime' checkbox has no effect.
Case 3: Employee works overtime hours on a Holiday.
Let's say that you have a daily overtime limit of 8 hours a day. If an employee works 10 hours on a Holiday, he would would otherwise be eligible for 2 hours of overtime pay. Again, The Logger's Edge has a default programmatic rule that says that if time is paid a premium for a holiday (meaning it has a Holiday factor of greater than 1.0, then do not count that time for overtime calculations. Thus, the 10 hours would all be paid at the Holiday rate. The 10 hours could still count for the calculation of a weekly overtime limit depending on the 'Holiday Hours Count for Wkly/Mnthly Overtime' checkbox in basic Setup.
