The Pay Adjustment Average Rate Rule is designed for employees with weekly contracts, and converts eligible pay adjustments to premiums paid at the employee’s average hourly rate (AHR), calculated over a specified number of weeks. For example, you could configure this rule to ensure that, in cases where an employee works beyond their contracted hours, time away from work requests are paid at a rate that reflects the time the employee actually worked, rather than only the time they were contracted to work.
Dayforce calculates an employee’s average hourly rate by summing the pay amounts from the necessary weeks and dividing by the sum of the contracted hours from the same time period. If this average rate is higher than the employee’s base rate, Dayforce pays the employee at the average rate. In cases where the average rate is lower than the employee’s base rate, Dayforce pays the employee at their base rate instead.
Important: This rule is designed to work only with weekly contracts. It shouldn’t be used with other contract periods (for example, calendar month, calendar year, or pay period) as it will produce unexpected results.
| Setting | Description |
|---|---|
| Eligible adjustment pay codes | The pay codes that mark the pay adjustments that this rule converts to premiums. In the example above, the administrator would select the pay codes that mark time away from work. |
| Pay category to assign to premium | The pay category that the rule assigns to the premium it pays out. |
| Lookback number of data points |
The number in this field defines the number of qualifying weeks (that is, data points) Dayforce includes when calculating the average hourly rate. A week only qualifies as a data point if the employee worked at least the number of minutes specified in the Threshold minutes field. This means that Dayforce might have to look back more weeks than the number specified in this field to find the correct number of data points. For example, with 3 in this field and 240 (that is, 4 hours) in the Threshold minutes field, Dayforce needs to find three weeks that each include at least four hours of worked time. Of the last three weeks, an employee worked six hours per week the first two weeks, but only three hours in the third week. Dayforce would then look further back to find a third week that has at least four hours of worked time. |
| Threshold minutes | Defines the number of minutes the employee must work during a week before the week qualifies as a data point. |
| Pay codes eligible for AHR calculation Pay codes ineligible for AHR calculation Pay categories eligible for AHR calculation Pay categories ineligible for AHR calculation |
The pay codes and categories that are eligible or ineligible to be included in the employee’s average hourly rate calculation. |
| Include premiums in AHR calculation | Select this checkbox and Dayforce includes premiums marked with eligible pay codes and categories in the average hourly rate calculation. |