In shop floor control, pay is calculated daily. The count unit and pay adjustment features can be applied when pay cannot be calculated using only the registrations of one day.
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The count unit feature is typically applied when issuing certain premiums. For example, a count unit may be applied if an employee receives a bonus when he is working more than 10 hours on a specific process during a week.
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The pay adjustment feature is typically applied when pay must be deducted. For example, a pay adjustment may be applied if an employee receives overtime pay on one day and is late the following day.
Count unit
example
Suppose that a company has a specific operation that requires a high level of skill from the employees. Because of this skill requirement, employees receive a special bonus when they are working on this operation.
However, the operation is very strenuous. Therefore, to make sure that the operation is not performed by the same employee all week the bonus is only paid for the first 10 hours each week. When the employee has worked 10 hours on the operation during the week, the incentive bonus is removed.
Pay
adjustment example
Suppose that a company only pays overtime if an employee has worked a minimum of 40 hours of standard time per week.
Working hours are expected to be eight hours a day from Monday through Friday. If an employee works overtime at the beginning of the week but does not work 40 hours of standard time by the end of the week, the overtime should be reduced.
Additionally, weeks that contain holidays have a reduced overtime limit. Therefore, if the typical workday is eight hours, a full holiday will reduce the overtime limit of the week by eight hours.
Company rules for overtime payment
Suppose that the company has the following pay types:
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Pay type 1201 is paid for all worked standard hours.
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Pay type 1301 is paid for overtime.
To handle the 40-hour example earlier, a rule for pay adjustment can be set up. A pay adjustment should be made to the paid overtime if the realized standard time for the pay period does not reach the expected standard time for the pay period.
In this example, the calculation of the pay adjustment is based on:
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The calculated expected standard time for the week.The expected standard time for a day is the time between the planned clock-in and clock-out time as it is set up in the that is used for time calculation on the given day. This is also referred to as the normtime.
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The realized paid standard time.The realized paid standard time for a day is all the paid hours minus the overtime hours.
The number of hours that should reduce possible overtime is the difference between the paid standard time and the expected standard time of the week.
Expected working hours
The following table shows the expected working hours for the week.
|
Monday |
Tuesday |
Wednesday |
Thursday |
Friday |
Total hours |
|
|---|---|---|---|---|---|---|
|
Expected clock-in time |
7.00 |
7.00 |
7.00 |
7.00 |
7.00 |
Not applicable |
|
Expected clock-out time |
15.00 |
15.00 |
15.00 |
15.00 |
15.00 |
Not applicable |
|
Expected paid hours |
8 hours |
8 hours |
8 hours |
8 hours |
8 hours |
40 |
Actual working hours
The following table shows the actual working hours for a specific employee.
|
Monday |
Tuesday |
Wednesday |
Thursday |
Friday |
Total hours |
|
|---|---|---|---|---|---|---|
|
Actual clock-in time |
7.00 |
7.00 |
9.00 |
7.00 |
9.00 |
Not applicable |
|
Actual clock-out time |
18.00 |
15.00 |
15.00 |
18.00 |
15.00 |
Not applicable |
|
Absence |
0 |
0 |
2 hours |
0 |
2 hours |
4 |
|
Total paid hours |
11 hours |
8 hours |
6 hours |
11 hours |
6 hours |
42 |
|
Overtime hours |
3 |
0 |
0 |
3 |
0 |
6 |
Calculated overtime pay without adjustment
Payroll transactions are calculated everyday. If no adjustment has been set up, the payroll transactions will be as follows.
|
Monday |
Thursday |
Total hours |
|
|---|---|---|---|
|
Overtime - Pay type 1301 |
3 hours |
3 hours |
6 |
This calculation does not correspond with the company rules for overtime payment.
Calculated overtime pay with adjustment
When a pay adjustment is applied the calculated overtime pay is as follows for the week.
|
Monday |
Tuesday |
Wednesday |
Thursday |
Friday |
|
|---|---|---|---|---|---|
|
Accumulated overtime - pay type 1301 |
3 hours |
3 hours |
1 hour |
4 hours |
2 hours |
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Monday- The employee has 3 hours of overtime.
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Tuesday- No deduction in overtime.
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Wednesday- 2 hours of overtime are deducted because of absence.
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Thursday- 3 hours of overtime are added.
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Friday- 2 hours of overtime are deducted because of absence.
When the week is fully calculated the employee has a total of 2 hours of overtime pay.
