Appendix: Frequently Asked Questions for Compensation Plans

This section covers the following frequently asked questions for compensation plans:

1. How does Dayforce calculate an employee’s compensation plan dates?
2. Why is an employee’s Eligible From date and Eligible To date different from the Plan Start date and Plan End date?
3. What payout periods are shown for pay components based on compensation plans in compensation cycles?
4. When configuring pay components for compensation plans in compensation cycles, what year is used to determine the bonus eligible salary for the payout?
5. What salary is used for an employee who is no longer in the compensation plan and if the Use Current Salary or the As of Date options were configured for the bonus eligible salary in the plan effective date record?
6. How is proration calculated for employees in compensation plans?
7. What metric measurement period is used for the bonus factor payout in a plan period?
8. How is the target bonus determined for an employee in a bonus plan?
9. If a Target Bonus Override value is configured in an employee profile, is this value used to calculate bonuses for the employee in a compensation plan?
10. How is the employee earning calculated when using Percentage of Total Pay as the target pay?
11. How is the employee eligibility calculated for a plan payout if the Payout Eligibility Cutoff Date is configured in the effective date record for a compensation plan?
12. Why is the Compensation Plan option not shown in the Source drop-down list in the Pay Components tab of Compensation Setup > Compensation Cycles even though the Compensation Plan feature is enabled?

Answers to the Frequently Asked Questions for Compensation Plans

1. How does Dayforce calculate an employee’s compensation plan dates?
2. • An employee qualifies for a compensation plan through groups when the employee is a member of a compensation group and the group is associated with a compensation plan.
     • An employee’s Plan Start date is calculated by the Effective From date when the employee became a member in the group, or the Effective From date when the group was associated with the plan, whichever is later.
     • An employee’s Plan End date is calculated by the Effective To date of the employee in the group or the Effective To date of the group associated with the plan, whichever is earlier.
   • Note: If an employee’s Plan Start date or Plan End date is overridden in the Compensation Administration > Compensation Plan Administration, then these calculations don’t apply.
2. Why is an employee’s Eligible From date and Eligible To date different from the Plan Start date and Plan End date?
3. • The waiting period, if configured in the relevant effective date record for the compensation plan, is applied to the employee’s Plan Start date to determine the employee’s Eligible From date.
   • The employee’s Eligible From date and Eligible To date can be overridden in the Compensation Administration > Compensation Plan Administration through the UI or import.
3. What payout periods are shown for pay components based on compensation plans in compensation cycles?
4. • When defining a pay component for a compensation plan in the Pay Components tab of Compensation Setup > Compensation Cycles, the Payout Period drop-down list shows payout periods based on the plan period, start month, and start day and those that fall within the compensation period defined in the Details tab of Compensation Setup > Compensation Cycles. For example, a quarterly compensation plan starting on April 1 will have four periods automatically generated for April 1 - June 30, July 1 - September 30, October 1 -December 31, January 1- March 31. If the compensation cycle has a period of January 1, 2020 to June 30, 2020, then the pay component for the compensation plan will list the payout period as January 1, 2020 - March 31, 2020 and April 1, 2020 - June 30, 2020.
4. When configuring pay components for compensation plans in compensation cycles, what year is used to determine the bonus eligible salary for the payout?
5. • The bonus eligible salary is defined for the date and month of the plan effective date record. The year appended to the bonus eligible salary date and month is determined by the selected payout period for the pay component.
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5. What salary is used for an employee who is no longer in the compensation plan and if the Use Current Salary or the As of Date options were configured for the bonus eligible salary in the plan effective date record?
6. • If an employee’s eligibility ends before the bonus eligible salary configuration date, then the employee salary on the plan end date is used as the bonus eligible salary.
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6. How is proration calculated for employees in compensation plans?
7. • Prorate by Eligibility: The employee is prorated based on the eligibility period in the payout period (Eligible From date and Eligible To date).
   • Prorate for New Hire: The bonus payout for an employee hired within a payout period is prorated by their most recent hire date. If both the Prorate by Eligibility and Prorate for New Hire options are selected, proration by eligibility takes priority to determine the employee eligibility period for the payout.
   • Prorate for Inactive Periods: The inactive periods configured within the employee eligibility period for the payout will be considered for proration.
7. What metric measurement period is used for the bonus factor payout in a plan period?
8. • If the metric measurement period and plan period aren’t the same, an algorithm is used to determine which metric measurement period is used to calculate the bonus factor payout for the plan using the metric. The logic used is as follows:
     • Are any metric measurement periods completely within the plan period? If yes, consider the most recent metric measurement period. If no, check if the plan period is completely within the metric measurement period. If yes, consider the value from the metric measurement period. If no, the plan period overlaps multiple metric measurement periods, which is a violation and the bonus factor payout cannot be calculated.
8. How is the target bonus determined for an employee in a bonus plan?
9. • The priority for the target bonus for an employee in a compensation plan is as follows:
     1. The target bonus override defined in Compensation Administration > Compensation Plan Administration for the employee in the compensation plan.
     2. The target bonus assigned to the primary job assignment of the employee if the plan is configured to use the job assignment target bonus.
     3. The default target bonus configured in the effective date record for the compensation plan.
   • For a payout period, a prorated target bonus is calculated for the employee based on the target bonus changes in the priority order mentioned above.
9. If a Target Bonus Override value is configured in an employee profile, is this value used to calculate bonuses for the employee in a compensation plan?
10. • The Target Bonus Override value configured in the employee profile isn’t used to calculate bonuses for employees that use compensation plans.
10. How is the employee earning calculated when using Percentage of Total Pay as the target pay?
11. • Based on the selected earning codes configured in the effective date record for the compensation plan, any employee earnings whose pay date falls within the payout period are included in the total earnings for the bonus eligible salary.
11. How is the employee eligibility calculated for a plan payout if the Payout Eligibility Cutoff Date is configured in the effective date record for a compensation plan?
12. • An employee’s eligible start date must be on or before the cutoff date configured in the effective date record for the compensation plan to be eligible for a payout in the period, and the employee must be eligible for a payout for at least one day within the payout period.
12. Why is the Compensation Plan option not shown in the Source drop-down list in the Pay Components tab of Compensation Setup > Compensation Cycles even though the Compensation Plan feature is enabled?
13. • You must have at least one plan and effective date record created for the plan in Compensation Setup > Compensation Plans to see the Compensation Plan option in the Source drop-down list in the Pay Components tab of Compensation Setup > Compensation Cycles.