Important: In order for an instance of the Apply UK Sick Pay Rule to work correctly, it needs to run before instances of the Auto Pay Rule, the Apply UK Earnings Rule, and the Apply UK Deductions Rule of the employee's payroll policy. This is because the Apply UK Sick Pay Rule can influence the calculation of auto pay and allowances and deductions. You can adjust the order of a rule in a payroll policy in Payroll Set-up > Payroll Policies by selecting the payroll policy from the list, selecting the rule, and clicking the Move Up and Move Down buttons. See Payroll Policies.
To calculate statutory sick pay in the Payroll module, you need to assign the Apply UK Sick Pay Rule to the employee's payroll policy. In Payroll Set-up > Payroll Policies, when you add a rule to a payroll policy, you can select Apply UK Sick Pay in the Type drop-down list. When you select Apply UK Sick Pay in the Type drop-down list, the application displays the following settings, all of which are each cleared by default.
Eligible Earning
Select the allowance that the application uses to pay the SSP amount. This drop-down list only displays allowances that have the statutory earning type of Statutory Sick Pay. The statutory earning type is defined for the allowance in the Statutory earning drop-down list in the United Kingdom tab of the Tax Compliance Rules tab in Payroll Set-up > Earnings and Deductions.
Stop Auto Pay
Before You Begin: This setting is only applicable to employees with a pay type that is enabled for auto pay, and who are eligible for the Auto Pay Rule of their payroll policy.
Select this checkbox for the application to reduce auto pay for pay runs based on TAFW requests that use one of the reason codes that you select in the Time Away From Work Reason Codes setting of the rule. Dayforce reduces auto pay for full day TAFW requests only, and not partial day requests.
If you don’t select the Stop Auto Pay checkbox, the application continues to calculate auto pay for the employee as it normally would.
The rule reduces auto pay for eligible sick days regardless of whether the application generates an SSP allowance. For example, if an employee requests four consecutive sick days using a reason code selected in the Time Away From Work Reason Codes drop-down list, the application reduces auto pay for all four days, even though the application only generates SSP for the fourth day and not the three waiting days of the Period of Incapacity for Work (PIW). This makes the Stop Auto Pay setting different from the Reduce Auto Pay setting in the Auto Pay Rule, which only reduces auto pay when the application generates the allowance for the specified code.
Important: For proration to work, the Auto Pay Rule of the employee’s payroll policy needs to have the Enable mid-proration based on average daily hours setting enabled or any option other than Not Enabled selected in the Mid-period proration drop-down list. The application uses these settings to calculate the prorated auto pay amount minus the number of sick days. If one these options is not enabled, the proration cannot occur and the application generates zero auto pay. See Auto Pay Rule.
For example, an auto pay employee who is salaried and in a monthly pay group requests four sick days from 01/05/2017 to 04/05/2017. The employee has no PIWs in the last 8 weeks. Moreover, the Auto Pay Rule in the employee's payroll policy has Business Days selected in the Mid-period proration drop-down list.
If the Apply UK Sick Pay rule has the Stop Auto Pay checkbox selected, and the Auto Pay Rule has Business Days selected in the Mid-period proration drop-down list, the application prorates auto pay for this employee using the following formula:
(employee salary / 12) / total business days) x business days worked
Because the employee's salary is £40,000, and they worked 19 of the 23 business days in the pay period, the following formula is used to calculate the prorated auto pay of £2,753.62 that period:
[(40,000 / 12) / 23] x 19
Time Away From Work Reason Codes
Select one or more sick pay codes that Dayforce checks when calculating sick pay. These are the same reason codes that employees select when they are requesting sick days. The drop-down list displays all of your organization's pay codes.
Regular Pay Eligible Earning, Regular Pay Ineligible Earning, Regular Pay Eligible Deduction, Regular Pay Ineligible Deduction
Before You Begin: In order for Dayforce to stop the allowance or deduction, you need to define the conditions of the stop via the Stop Payment Method setting in earning and deduction definitions. See UK Stop Payment Method.
Select one or more earning or deduction codes from the following settings to define which allowances or deductions stop, or are allowed to continue, when the employee is on leave:
- Regular Pay Eligible Earning
- Regular Pay Ineligible Earning
- Regular Pay Eligible Deduction
- Regular Pay Ineligible Deduction
For example, you need to use this setting to stop Dayforce from calculating salary sacrifice allowances when the employee is on leave.
You can select one or more options in the Regular Pay Ineligible Earning and Regular Pay Ineligible Deduction drop-down lists to determine which allowances and deductions Dayforce stops calculating when the employee is on leave. The application will continue to calculate any allowances and deductions that you don’t select.
Conversely, you can select one or more options in the Regular Pay Eligible Earning and Regular Pay Eligible Deduction drop-down lists to determine which respective allowances and deductions Dayforce continues calculating when the employee is on leave. The application stops all other allowances and deductions that you don’t select.
For example, if you select the Parking allowance code in the Regular Pay Eligible Earning drop-down list, Dayforce continues to calculate this allowance as scheduled and stops all other allowances.
Notes:
- If you select any options in the Regular Pay Ineligible Earning and Regular Pay Ineligible Deduction drop-down lists, you wouldn’t define the Regular Pay Eligible Earning and Regular Pay Eligible Deduction drop-down lists, and vice versa.
- These settings don’t prevent Dayforce from processing manual payroll entries that you make for allowances and deductions in the Payroll feature.
- You can override the stop settings for individual employees in the Payroll > Payroll Elections screen of the employee profile in People. See Stop Payment Override for UK Employees.
- When Dayforce stops a deduction or allowance, it doesn’t affect the record in the employee's payroll elections (for example, it doesn’t end date the payroll election). This means that once the employee returns from leave, Dayforce continues to calculate the allowance or deduction as normally.
- When Dayforce stops a deduction that is configured to allow an arrears balance, Dayforce doesn’t add the stopped scheduled amount to the employee's arrears balance.
Employee Average Pay Override
Select the employee property that the application uses to override the default calculation of average weekly earnings.
This option is for customers migrating to Dayforce who might not have the sufficient payroll history for the application to calculate the average weekly earnings.
As part of Dayforce functionality, in the Employment > Employee Properties screen of People, you can add a property that contains the employee’s average weekly earnings figure.
When you select this employee property in the Employee Average Pay Override drop-down list in the Apply UK Sick Pay Rule, the application uses the value in the property to determine whether the employee is above or below the limit. Using the earlier example, the employee’s average earnings of £200 place them above the limit and eligible for SSP, even if they didn’t have any actual earnings in Dayforce. If you leave the Employee Average Pay Override drop-down list empty, the application uses the default calculation method for determining the average weekly earnings.
Note: You can effective end date this property in the employee’s record once there is enough payroll history in Dayforce to calculate the average earnings (that is, the date range of the property should only cover the period of insufficient history).
The application only uses the employee property if it is effective dated in the employee's record on the first sick day of the linked absence recorded in Dayforce. If this is not the case, the application uses the default calculation method. For example, if an employee's first sick day of the linked absence is 1 April, but the employee property is effective on 2 April, the application uses the default calculation method.
Before you can use Employee Average Pay Override drop-down list, you need to create the employee property in HR Admin > Employee Properties and then add it to the employee's record. See Create Employee Properties in the HR Administration Guide.
Note: After you create an employee property in HR Admin > Employee Properties you can add it to individual employee records using the HR Import. See the Dayforce HR Import Specification document.
Emergency Time Away from Work Codes
Use this drop-down list to select a code to apply the rule to a specific sickness type. Generally this is used for COVID-related illness where the UK government allows you to waive the 3-day waiting period for SSP.
Emergency Waiting Days Override
Set to 0 to ensure SSP is applied from the first day of COVID-related sickness.
Emergency PIW Days Override
Set to 1 to ensure SSP applied from the first day of COVID-related sickness.
SSP Qualifying Days in Week
Select one of the following options to indicate what type of work week the calculation is based on when determining qualifying days:
- Work Contracts: Calculated based on the work contract assigned to the employee in the Work > Work Contracts screen in People.
- Five - Working days
- Seven - Calendar days
Note: If you are already using the 7-day workweek, be aware that changing this setting results in Dayforce recalculating 3 periods of previously paid SSP to the new setting.