Using Contract and Reserve Pay Together
In order for contract and reserve pay to be processed together, your site needs to have the following table entries:
Reference Table |
Reference Table Setup |
Reserve Payout Factor (RPYF) |
The Numerator and Denominator indicate the portion the accrued reserve that should be paid out. For example, 0/1 for earnings period, 1/remaining payments for payout period. |
Site Specific Parameters (SPAR) |
ALLOW CONTRACT PAY PROCESSING must be Y to indicate that contract pay processing is allowed. ALLOW RESERVE PAY PROCESSING must be Y to indicate that reserve pay processing is allowed. USE NEW CONTRACT MODEL must be set to N. The system will not use the Contract Pay Smoothing model to calculate contract pay. |
Pay Class (PYCL) |
The Contract Days Count must have the number of days the employee has contracted to work, Reserve Pay Allowed field must be set to Eligible at Policy Level to invoke reserve pay processing, Contract Hours Per Day is entered to show the number of contract hours per day for which an employee is paid, Reserve Accrual Periods # indicates the number of pay periods over which reserve dollars are accrued, and Reserve Payout Periods # indicates the number of pay periods over which reserve dollars are paid out. |
To understand how the reserve pay under the regular model is calculated, an example of an employee is provided and an example of how the system calculates this employee’s pay is provided.
Example: A teacher governed by a nine month academic contract would like to be paid over 12 months. The teacher’s pay for this period is $3,600.
The following calculation is performed to find the reserve pay amount:
Information Calculated |
Numeric Formula Applied |
The reserve accrual factor is calculated using the information on either Pay Class (PYCL) or Contract/Reserve Pay Options (COPT), if overrides are entered. The reserve accrual pay periods are divided by the reserve accrual pay periods plus the reserve payout pay periods minus 1. The subtraction of “1” results in a negative number. |
Reserve Accrual Periods = 9 Reserve Payout Periods = 3 9/12 - 1 = -.25 |
The reserve amount is calculated by multiplying the reserve accrual factor by the amount of pay in the pay period that is subject to reserve. |
Reserve Accrual Factor = -.25 Pay = $3,600 -.25 x $3,600 = -900 |
Example: The teacher receives $2,700 for this pay period, $900 is held in reserve.
