The Adjustment Rate From Past Periods Rule allows administrators to pay accrued sick leave at an average to comply with California’s paid sick leave law when overtime is paid as separate premiums or with blended rate at a known multiplier.
For example, in California, the law requires employers to pay employees sick leave based on their regular rate of pay. This is usually the employee’s hourly wage. However, if an employee’s pay fluctuates, for example if they’re paid commissions or piece rate, then the rate of pay is calculated by dividing the employee’s total wages, not including overtime premium pay, by the total hours worked in the full pay periods of the prior 90 days of employment.
By default, the rule takes the value in the Lookback days field and averages pay for all pay periods fully contained within the specified lookback period, which begins from the day prior to the date the pay adjustment appears on. However, employers can use the workweek in which an employee took sick time when calculating sick pay, if that is preferred. They can also specify how they want the Lookback days field to determine the pay periods used for calculating sick pay.
This rule is similar to the Pay Adjustment Average Rate Rule in that it pays an adjustment rate based on an employee’s past pay, but the method for determining which days to average is different. See Pay Adjustment Average Rate Rule.
| Setting | Description |
|---|---|
| Eligible adjustment pay code | Specify which pay codes mark eligible pay adjustments. For example, pay codes that mark sick time. |
| Pay category to assign to premium | Select the pay category that the rule assigns to any premium it pays out. |
| Method #1 Lookback days | Specify the number of days from the date being examined that Dayforce looks back to find pay periods fully contained within the lookback period. The rule averages pay for all pay periods fully contained within the specified lookback period, which begins from the day prior to the date the pay adjustment appears on. This is the default method, activated by adding a value. When specified, only pay periods that both start and end within the lookback period are included. |
| Method #1B Include Partial Overlaps at start | Select this checkbox and the rule includes any pay period that partially overlaps the period specified by the Method #1 Lookback days field at the start of the lookback period in the calculation (that is, instead of applying the default behavior which is to exclude overlapping periods). |
| Method #1C Strict Day Range Only | Select this checkbox and the rule doesn’t check for pay periods at all and instead uses the number of days in the Method #1 Lookback days field (prior to the date for which the calculation is being performed) to determine which pay periods to include. |
| Method #2 Use Current Week |
Select this checkbox and the rule calculates the average rate using pay items from the current week only (that is, the rule doesn’t look at Lookback days or Lookback periods at all). Note: To properly account for overtime calculated throughout the week, using this method requires that you run the rule on the last day of the week (or upon termination), ensuring that the rule is controlled by qualification criteria on this day only. |
| Method #3 Lookback Periods |
When a value is specified here, the rule ignores any values in the Method #1 Lookback days field, and looks for the specified number of past pay periods to determine a rate of pay for employees. Dayforce only includes completed periods that occur before the time away. It doesn’t include the current pay period in its calculations. Note: If the lookback period doesn’t contain any time worked for an employee (for example, if they took vacation and then immediately got sick) then zero dollars are paid. In this case, you can select a different lookback period or create a manual pay adjustment. |
| Pay codes eligible: general Pay codes not eligible: general Pay categories eligible: general Pay categories not eligible: general |
Specify which pay codes and pay categories are included or excluded in the calculation of the adjustment rate. |
| Back out pay category multiplier from general |
Select this checkbox to back out the pay category multiplier rate from any pay segments that are in the “general” category. This can be used as an alternative way to handle blended rate scenarios, where the default pay category multiplier determines the overtime premium proportion. Note: When using this checkbox, the “overtime” and “doubletime” sections should be left blank, because an explicitly declared multiplier isn’t being considered. As well, if any default multiplier is set to zero, then it isn’t possible to back out the multiplier because a “divide by zero” error would occur. In this case, the amount (that is, zero if the multiplier was applied) is added unaltered. |
| Blended overtime rate | Use only when the blended rate component of pay summaries needs to be removed. Specify the blended rate multiplier at which overtime was paid. Pay segments listed as eligible as overtime will have their amounts divided by this value so that only the non-overtime portion is included in the rule calculation. Leave empty if this functionality isn’t required. |
| Pay codes eligible: overtime Pay codes not eligible: overtime Pay categories eligible: overtime Pay categories not eligible: overtime |
Only relevant when Blended overtime rate has a value. Specify which pay codes and pay categories should be used to determine what was paid as blended rate overtime. |
| Blended doubletime rate | Use only when the blended rate component of pay summaries needs to be removed. Specify the blended rate multiplier at which doubletime was paid. Pay segments listed as eligible as doubletime will have their amounts divided by this value so that only the non-doubletime portion is included in the rule calculation. Leave empty if this functionality isn’t required. |
| Pay codes eligible: doubletime Pay codes not eligible: doubletime Pay categories eligible: doubletime Pay categories not eligible: doubletime |
Only relevant when Blended doubletime rate has a value. Specify which pay codes and pay categories should be used to determine what was paid as blended rate doubletime. |
| Pay codes eligible for duration Pay codes not eligible for duration Pay categories eligible for duration Pay categories not for duration |
Specify which pay codes and pay categories selected in the general, overtime, or doubletime settings to include or exclude when determining the duration of time worked. For example, if the pay includes a separate shift premium for working after 6:00 PM, its amount should be included in the calculation, but not its duration (because the duration is already accounted for on the main work details). This could be configured, for example, by excluding the shift premium pay code using these eligibility settings. Leaving these settings empty means that the duration is calculated for all of the pay codes and pay categories specified as eligible in the general, overtime, and doubletime settings. |
| (Legacy) Calculate prior period adjustment as discount code |
Before You Begin: The (Legacy) Calculate prior period adjustment as discount code setting doesn’t consider pay summaries generated by other pay rules in the current workweek. When this setting is enabled:
If required, the priority status of the discount setting might be offset through the use of the Discount Hours Rule. This can be achieved by placing the Discount Hours Rule below the Adjustment Rate From Past Periods Rule, but before the applicable pay rules, such as an overtime rule with discount codes. See Discount Hours Rule. Select this checkbox to configure the rule so that any premiums it pays out lower the weekly overtime thresholds of the Weekly Overtime Rule and cause employees to earn overtime after working a shorter amount of time. Note: Selecting this checkbox requires that the Weekly Overtime Rule is also appropriately configured. See Weekly Overtime Rule. |