PR> Maintenance> Premiums

Premium Maintenance

Summary

The Premium Maintenance window is used to create and maintain premiums. Premiums can be attached to an employee record and triggered by the pay codes on a paycheck or they can be set up as shift codes and attached to a time card line item. If a premium is attached to an employee record (PR> Maintenance> Employee> Premium tab), the premium will apply when the pay code attached to the premium is added to a paycheck. Premium pay will display as a separate line item on the payroll checks.

Premiums can be calculated in three ways: percent, hourly amount and flat amount. Percentage premiums apply a percentage rate to the wages attached to a pay code (for example, if an employee should be paid a premium of 5% on wages attached to a certain pay code). Hourly Amount premiums add to the hourly rate of an employee (for example, if an employee should make an extra $.75 each hour because they are working the graveyard shift). Flat amount premiums add a flat amount to the paycheck (for example, if $25 should be added to the paycheck anytime a specific pay code is used).

You can also attach level breaks to premiums so that they calculate at different rates based on the length of time an employee has been employed. For example, if an employee that has been employed for more than 7 years should be given a larger premium than an employee that has been employed for 3 years, you can set up different premium rates for those employees based on the number of months they have been employed. The number of months an employee has been employed is calculated using the anniversary date on the employee record (PR> Maintenance> Employee> General tab> Anniversary Date field). If the premium should calculate the same on all employees, you can create a single level break that applies to all employees.

Click here for information on Pay Code Maintenance.

Step by Step

2 Create or maintain a premium.

The Code field is used to enter a premium code. The premium code can be up to 15 alphanumeric characters long.
Enter a description of the premium in the Description field. This is a required field.
The Amount Type drop-down menu is used to set up how the premium will calculate. The selection in this field will affect the functionality of the Amount column in the Levels section.

Select Percent if you would like the premium to apply as a percentage to the wages attached to the pay code on the premium. For example, if an employee should be paid a premium of 5% on wages attached to a certain pay code, select Percent and then enter 5 in the Amount column in the Levels section. When an employee with the premium attached to their employee record enters a time card line item using the pay code on the premium, the premium will be applied to the wages on the time card line item.
- When Percent is selected, the value in the Amount column in the Levels section is a percentage amount.
Select Hourly Amount if you would like the premium to apply based on the hours attached to the pay code on the premium. For example, if an employee should make an extra $.75 each hour because they are working the graveyard shift, select Hourly Amount and then enter 0.75 in the Amount column in the Levels section. Then you can attach the regular pay code to the premium in the Pay Codes section. When there are time card line items attached to the regular pay code, the premium will be applied to the paycheck at an hourly rate. If the hourly wage premium shouldn’t always be applied when a pay code is used (for example, an employee does not always work the graveyard shift), you can set up the hourly amount as a shift code.

You can also check the Shift toggle if you would like to apply the premium as a shift code. In the graveyard shift example above, you could check the Shift toggle and then attach the premium to the time card line items rather than to the employee record.

Select Flat Amount if the premium should be applied as a flat amount regardless of the wages or hours on the time card. For example, if $25 should be added to the paycheck anytime a specific pay code is used, enter 25 in the Amount field in the Levels section and select the pay code in the Pay Codes section.

The Calculate Option drop-down menu is used to
The Aggregate drop-down menu is used to aggregate the premium with a pay code. This will enable the Aggregate Pay Code field.

If you are creating a shift code (for example, graveyard shift pay), you cannot set up a shift code as an aggregate.

The Aggregate Pay Code field is used to aggregate the premium with a pay code. This field is only enabled if you select Yes in the Aggregate field.
The Always eligible toggle is used in conjunction with the unions set up in the Human Resources module. Check this toggle if all employees, regardless of the union attached to their employee record, can use the premium. By default, this toggle will be checked.
- The Always eligible toggle determines if the premium is specific to a union. When the toggle is checked, the premium can be attached to any employee.
- When this toggle is not checked, only employees that belong to a union with the premium attached can use it (HR> Maintenance> Union Unit> Premiums tab).
- This premium can only be added to an employee record if the premium is also set up on the union unit attached to the employee record. If you do not check this toggle, you can still add the premium to a union unit and set it up as a required record, but the premium can also be attached to employees that do not belong to a union unit. For example, if you are creating a premium that is used by the members of a specific union unit, but should also be available employees that do not belong to the union unit, check the Always eligible toggle and add the premium to the union unit (HR> Maintenance> Union Unit> Premiums tab).
- Click here for an overview on Union Units.
- Click here for information on Union Unit Maintenance.
Check the Affect overtime rate calculation toggle if the premium level specified below should apply to overtime rates as well as regular pay rates.
The Status field is used to set the status of the premium. Active will be selected by default.
The Levels section is used to set up how the premium will be applied. You must enter at least one level break on the premium.
- Select a level amount in the Levels section and click DELETE if you would like to delete the level.
- Click ADD to add a new level to the premium. This will add a line item to the Levels section.
The Level column is used to set up rate structures based on how long an employee has been employed. Enter the number of months an employee should be employed before the premium is applied in the Level column. For example, enter 36 if the premium should apply to employees that have been employed for at least 3 years. The length of time an employee has been employed is calculated using the anniversary date on the employee record (PR> Maintenance> Employee> General tab> Anniversary Date field).
- You can enter more than one level break on the premium. For example, you can add multiple level breaks to create a premium that applies different rates based on the length of time an employee has been employed.
- Enter 0 in the Level column if the premium should apply to all employees.
The Amount column is used to enter the rate at which the premium will be applied to the employees. The functionality of the Amount column depends on the selection in the Amount Type drop-down menu.
- If Percent is selected in the Amount Type drop-down menu, the Amount field represents the percentage rate that will be applied.

The Description column is used to enter a description of the level break.

The Pay Codes section is used to select the pay codes that will trigger the premium. You must attach at least one pay code to the premium.

In some circumstances, you may want to create a unique pay code for a premium. For example, if a premium should affect the FLSA wages but not the FLSA hours, you may want to create a unique pay code just for that premium that is set up to affect the FLSA wages but not hours (PR> Maintenance> Pay Code> Increase FLSA wages and Increase FLSA hours toggles).

Select a pay code in the Pay Codes section and click DELETE if you would like to remove a pay code from the premium.
Click ADD to open the Pay Code Selection screen to add a pay code to the premium. The pay code will populate in the line item once it has been selected.
If you add more than one pay code to a premium, the premium will apply each time the pay code is on the time card. For example, if there are two pay codes attached to the premium and each of those pay codes are attached to a pay check, the premium will create two line items on the check, one for each time the premium applies.
Premiums are attached to employees using the Employee Maintenance window (PR> Maintenance> Employee> Premiums tab).

Click the Save button when complete to save the premium.