To pay used sick time at an average rate that’s calculated from one or more prior weeks, you need to configure the Adjustment Rate From Past Period Rule and add it to the appropriate pay policy. This rule pays accrued sick leave at an average to comply with the state’s paid sick leave law when overtime is paid as separate premiums or with blended rate at a known multiplier.
For example, in some states, the law requires employers to pay employees sick leave based on their regular rate of pay. This rate is usually the employee’s hourly wage. However, if an employee’s pay fluctuates (for example, if they’re paid commissions or piece rate), Dayforce calculates the rate of pay 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 that are fully contained within the specified lookback period, which begins from the day prior to the date the pay adjustment appears on. However, if preferable, you can configure the rule to use the workweek in which an employee took sick time when calculating sick pay. You can also determine which pay periods the system uses when calculating sick pay based on your Lookback days setting configuration.
Note: The current pay period isn’t included in the calculation.
See Adjustment Rate From Past Periods Rule.
To add the Adjustment Rate from Past Periods Rule to your pay policy:
- Go to Pay Setup > Pay Policy and select the relevant pay policy in the list. A slide-out panel opens.
- In the Rules Configuration tab, click the add icon and then click Rule.
- Enter a name and description of the rule.
- Enter the rule’s start and end dates.
- In the Type drop-down list, click Adjustment rate from past periods rule.
- Configure the rule’s setting:
- Eligible adjustment pay code: Specify the pay code of the pay adjustments that’s used for sick pay, which is either created through the application’s time away from work (TAFW) engine or added directly to the timesheet.
- Pay category to assign to premium: Select the pay category that the rule assigns to any premium that it pays out.
- Method #1 Lookback days: Specify the number of days from the date that’s being examined that Dayforce looks back to find pay periods fully contained within the lookback period. The rule averages pay for all pay periods that are 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, and it’s activated by adding a value to this field. When specified, the system includes in the calculation only pay periods that both start and end within the lookback period.
- Method #1B Include Partial Overlaps at Start: Select this checkbox and the rule includes any pay period that partially overlaps the period that’s specified by the Lookback days setting 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. Instead, the rule uses the number of days in the 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 your Lookback days or Lookback periods configuration).
- Note: To properly account for overtime that’s calculated throughout the week, you must run the rule on the last day of the week (or upon termination) if you select this method. This ensures that the rule is controlled by qualification criteria on this day only.
- Method #3 Lookback Periods: When you enter a value in this field, 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 includes only completed periods that occur before the time away, and 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), the rule calculates zero dollars for pay. 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: Use these settings to configure which pay codes and pay categories Dayforce includes in the calculation of the adjustment rate. This should exclude any items to be considered as blended rate overtime or double time.
- 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. You can use these settings as an alternative way to handle blended rate scenarios, where the default pay category multiplier determines the overtime premium proportion.
- Note: When using this setting, the overtime and double time settings should be left blank because an explicitly-declared multiplier isn’t being considered. Also, 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 this setting 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. Don’t configure this setting if this functionality isn’t required.
- Pay codes eligible: overtime, Pay codes not eligible: overtime, Pay categories eligible: overtime, Pay categories not eligible: overtime: These settings are relevant only when the Blended overtime rate field has a value. Select which pay codes and pay categories Dayforce should use to determine what was paid as blended rate overtime.
- Blended doubletime rate: Use this setting only when the blended rate component of pay summaries needs to be removed. Specify the blended rate multiplier at which double time was paid. Pay segments listed as eligible as double time will have their amounts divided by this value so that only the non-double time portion is included in the rule calculation. Don’t configure this setting if this functionality isn’t required.
- Pay codes eligible: doubletime, Pay codes not eligible: doubletime, Pay categories eligible: doubletime, and Pay categories not eligible: doubletime: These settings are relevant only when the Blended doubletime rate field has a value. Select which pay codes and pay categories Dayforce should use to determine what was paid as blended rate double time.
- Pay codes eligible for duration, Pay codes not eligible for duration, Pay categories eligible for duration, and Pay categories not eligible for duration: Specify which pay codes and categories that are selected in the general, overtime, and double time 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). You can configure this requirement, for example, by excluding the shift premium pay code using these eligibility settings. Leaving these settings empty means that Dayforce calculates the duration for all of the pay codes and pay categories that are specified as eligible in the general, overtime, and double time settings.
- (Legacy) Calculate prior period adjustment as discount code: 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.
- Click Save.