Guaranteed Premium Events

In some cases, a Guaranteed Premium amount may be issued for certain earnings codes, such as Call Back. These events are guaranteed at a rate of time and a half, with the extra half time paid as the Guaranteed Premium Amount. The Guaranteed Premium is paid even if the employee does not qualify for FLSA overtime compensation based on the total number of hours worked in the FLSA period. If an employee earns FLSA premium, any Guaranteed Premium amount earned from hours worked that has already been paid (as a result of Time-To-Gross) to the employee for FLSA eligible events is counted towards the required FLSA premium calculated (during Gross-to-Net). As a result, a comparison must be made between the premium amount generated for FLSA eligible Guaranteed Premium pay events (based on the Guaranteed Premium Event flag on the Pay and Leave Events (EVNT) page) and the calculated FLSA premium amount for the FLSA work period, and a net payment amount is issued for the difference. Refer to Guaranteed Premium Events for additional information.

Setting Up Guaranteed Premium Events

The Guaranteed Premium Event flag on the Pay and Leave Events (EVNT) page indicates pay events that are considered Guaranteed Premium events. Valid values include No, Yes with FLSA, and Yes without FLSA. If the Guaranteed Premium Event field is set to Yes with FLSA or Yes without FLSA, then the event is a Guaranteed Premium pay event. The value Yes with FLSA should be used for Guaranteed Premium pay events whose straight component is included in the FLSA calculation. The value Yes without FLSA should be used for Guaranteed Premium pay events whose straight component is not included in the FLSA calculation. Advantage HRM uses the FLSA Processing Information section of the EVNT page to determine FLSA eligible pay events.

Time-to-Gross processing automatically generates the Guaranteed Premium amount for Guaranteed Premium pay events (based on the straight rate). Events that generate both a straight portion and a guaranteed premium amount are set up with two components of pay, causing the premium to be systematically generated based on timesheet entry. For each pay event eligible for the guaranteed premium, the following events need to be set up:

Timesheet Entry Code - a pay event code for time and one-half to be entered on the timesheets. (This should also be established with the Store Pay Results At field set as Component Level.) The Guaranteed Premium Event field is set to No. This could be equivalent to what the employee currently enters on the timesheet for call back or any other event with a guaranteed premium.
Straight Component - a pay event code to be used as a component of the timesheet entry code and will be 100% of the regular pay (straight rate). The Guaranteed Premium Event field is set to No. If the hours charged to the Timesheet Entry Code above should be included in the FLSA calculation, then the Include Event in FLSA Calculation field needs to be Yes for this event.
Premium Component - a pay event code to be used as a component of the timesheet entry code and will be 50% of the regular pay (straight rate). The Guaranteed Premium Event field is set to either Yes with FLSA or Yes without FLSA, depending on whether the corresponding Straight component is included in the FLSA calculation. When the Guaranteed Premium Event field is set to Yes with FLSA, the Include Event in FLSA Calculation field should be No but the % Hours Included in FLSA and % Pay Included in FLSA should both be set to 1.0. When the Guaranteed Premium Event field is set to Yes without FLSA, the Include Event in FLSA Calculation field should be No and the % Hours Included in FLSA and % Pay Included in FLSA should both be set to 0.

As noted above, the FLSA information must be established on EVNT for use by the FLSA process. For the Guaranteed Premium pay events and components, only the components for the straight portion are included in the FLSA calculation (100% of Hours and Dollars. The timesheet entry and the premium component amounts are excluded from FLSA. In addition, Guaranteed Premium pay events such as Call Back Guaranteed, in which the employee did not actually work the entered hours, are not included in the FLSA calculation. The percentage of hours and dollars included in FLSA is set to zero for the timesheet entry code, straight component, and premium component.

The Guaranteed Premium entries from the EVNT table must be set up on the Pay Policy Event Type (PPET) table for all affected pay policies. All of the above event codes must be set up on the PPET table, even though the employees and time keepers only use the timesheet entry codes. The timesheet entry codes need to be set up with multiple components as follows:

Time and one-half Guaranteed Premium entry: Component 1 = Straight Component at a Rate of 1.0; Component 2 = Premium Component at a Rate of 0.5.

Site Specific Parameters

The Site Specific Parameters (SPAR) entry GUARANTEED PREM COMP BYPASSED determines whether a comparison between eligible FLSA Premium hours and eligible Guaranteed Premium hours occurs.

If the Yes/No Flag on this SPAR entry is cleared (No), then FLSA Gross-to-Net (GTN) Processing compares the premium amount generated for FLSA eligible Guaranteed Premium pay events with the calculated FLSA premium amount for the FLSA work cycle. The system adds together all pay amounts that occurred during the employee’s FLSA work cycle for pay events with the Guaranteed Premium Event field set to Yes with FLSA on EVNT. Meanwhile, the FLSA premium amount is calculated using existing functionality. The system utilizes the FLSA Profile (FLPR), the respective Plan Type (FCHR), and the Number of FLSA Maximum Regular Hours field on the FCHR page. The total Guaranteed Premium amount for the FLSA work cycle is compared to the calculated FLSA Premium amount. If the FLSA Premium amount is greater than the Guaranteed Premium amount already generated, then an additional net payment is issued. If the FLSA Premium amount is less than the Guaranteed Premium amount, then no adjustment is made.
If the Yes/No Flag on this SPAR entry is selected (Yes), the system bypasses all premium comparisons. The Guaranteed Premium Event check box may still be selected on the EVNT page to specify events eligible for a Guaranteed Premium, but no comparisons take place during Gross-to-Net processing. The system uses Time-to-Gross processing to issue pay amounts for Guaranteed Premium pay events based on component pay setup, and Gross-to-Net processing also issues entire FLSA Premium amounts (not net payment adjustments), provided calculation for FLSA premiums configured.
The FLSA Profile page includes the Guaranteed Premium Net Payment Type. This field specifies the net payment adjustment type that is used to issue the difference between the FLSA Premium and Guaranteed Premium amounts. This net payment type must be a valid FLSA pay event type on EVNT and should have the Guaranteed Premium Event flag set to No and % Hours Included in FLSA and % Pay Included in FLSA both set to 1.0.

The SPAR parameter, GUARANTEED PREM FLSA RATE, determines if the Premium component of Guaranteed Premium events are to be paid at the FLSA Premium Rate as opposed to the employee’s Straight Rate.

When the Yes/No Flag on the SPAR entry GUARANTEED PREM FLSA RATE is selected, the Premium component of Guaranteed Premium events is paid at the FLSA Premium Rate as opposed to the employee’s Straight Rate. Time-to-Gross processing still generates pay amounts based on component pay setup at the Straight Rate, but the net payment amount issued during FLSA Gross-to-Net processing includes any differences between the FLSA Premium Rate and the Straight Rate for the Guaranteed Premium pay events’ premium components. Under this special processing, the system still calculates the FLSA Premium amount and compares this amount to the total premium amount generated for FLSA eligible Guaranteed Premium pay events during the FLSA work cycle. An additional comparison occurs between the Guaranteed Premium amount issued for pay events with the Guaranteed Premium Event field set to Yes without FLSA on EVNT and the calculated Premium amount for those pay events using the Premium Rate. If the calculated Premium amount for FLSA ineligible pay events is greater than the generated Guaranteed Premium amount for those events, then that difference is added to the original net payment amount to determine the total net payment amount for the FLSA work cycle.
If no original net payment adjustment is required and Yes/No Flag on the SPAR entry GUARANTEED PREM FLSA RATE is selected, then the system performs two additional comparisons instead of one: one involving pay events with the Guaranteed Premium Event field set to Yes without FLSA on EVNT and another involving pay events with the Guaranteed Premium Event field set to Yes with FLSA on EVNT. Both Guaranteed Premium amounts are compared with the calculated Premium amount for those pay events using the Premium Rate. If the calculated Premium amount for the pay events is greater than the generated Guaranteed Premium amount, then that difference is the adjustment amount. The total adjustment amount is equal to the addition of the two adjustment amounts.