Set up payroll codes for Occupational Sick

Before you can use Occupational Sick, you must set up the occupational sickness payroll codes for the proportions of salary defined in the allowances in your organization’s occupational sickness schemes. For example, if your schemes include occupational sickness payments at full pay, half pay, and quarter pay, you must define the payroll codes for each of these proportions.

You must also decide how other payroll codes are managed when occupational sickness payments are made. For example, if the salary for qualifying employees is replaced by occupational sick pay, you must set the appropriate settings for the salary payroll code to indicate it is replaced by occupational sick pay and prorated. In this case, on the Controls tab for the salary payroll code, you set Method to Replace, and select an appropriate setting in React to Critical Dates.

Similarly, if you normally make particular payments for some employees, you might decide to suspend these payments when those employees are off sick. For example, you might normally pay a specific, additional payment to those employees who are trained in first aid, but choose to suspend these payments when they are off sick. In this case, you must select Suspend in Method for the first aid payroll code to suspend payments for the pay period when employees are off sick. The system stops the payment when it finds sickness absence entries recorded for the pay period, but does not prorate payments based on the absence dates.

When the system adjusts employees’ pay to include occupational sickness payments, it uses date-effective processing to determine its pay calculations. The working file shows the pay adjustments. This date-effective processing is a core function of the Payroll module, and is used to calculate an employees’ pay when they start or leave your organization. When the system uses effective dates for starters and leavers, it examines the dates for the current pay period in an employee’s HR record. Similarly, when the system adjusts payments for occupational sickness, it examines the sickness absence entry dates in employees’ pay records in the current pay period. When it finds any, it prorates payments based on the dates.

To enable the system to adjust employees’ pay, and the basis on which to do it, you must set a parameter in React to Critical Dates for each occupational sick payroll code and the salary payroll code. If you select No, the system does not prorate payments for the payroll code. If you select any other value, the system prorates pay calculations in different ways depending on the setting. For detailed information about the settings, refer to  React to Critical Dates on the Controls tab in Payment/Deductions.

When you use Occupational Sick to adjust employees’ pay, employees who are off sick and who qualify for occupational sickness payments, will see the payments for both basic pay and sickness on their payslips. For example, if an employee is off sick between the 12th and the 18th of the April pay period, after you run the payroll calculation for the pay period, the working file and the payslip would show transactions for basic pay for the 1st to 11th and the 19th to 30th, and occupational sickness for the 12th – 18th.

You create payroll codes for Occupational Sickness in the same way as you create any payroll code, but there are specific parameters you must set to tell the system how to calculate the transactions for occupational sickness payments.

To create a payroll code for an occupational sickness payment:

  1. Select Payroll > Payment/Deduction. The Payment/Deduction window is displayed.
  2. Click New.
  3. On the General tab, type the name of the code. For example, to create a code for an occupational sickness payment at full pay, you can enter OSFP.
  4. In the Description field, type the description for the code, such as Occupational Sickness — Full Pay.
  5. In Type of Code, select Automatic.
  6. In Payment/Deduction, select Payment.
  7. In Payslip Description, type the description that appears on the payslip, such as Occupational Sick Pay — Full.
  8. Click the Controls tab.
  9. In React to Critical Dates, select an item from the list. Select any setting except No to prorate the payroll code’s value by using the dates of sickness absence recorded for the current period.
  10. On the Calculation tab, select the calculation type.For detailed information about the choices you can make on this tab and other tabs, refer to Payment/Deduction.
  11. Click Save to save the details for the pay code.

To tell the system how other payments should be managed when occupational sickness payments are made, for each payment affected, do the following:

  1. Select Payroll > Payment/Deduction.
  2. Select the payroll code and click Edit.
  3. Click the Controls tab.
  4. In Method, under Occupational Sick, select Leave, Replace or Suspend.When you select Replace, you must also select a setting in React to Critical Dates.Select:
    • Leave to continue paying the item whether or not occupational sickness is paid.
    • Suspend to stop the payment for the pay period. The system stops the payment when it finds sickness absence entries recorded for the pay period, but does not prorate payments based on the absence dates.
    • Replace to replace the item with the occupational sickness payment. For example, in the case of the basic pay or salary payroll code, you set this field to Replace. When you select Replace, you must ensure you specify the occupational sick payroll code and associated duration on the occupational sick scheme definition’s Progression tab, which tells the system what occupational sickness payment replaces the item and for how long.
  5. If you select Replacein the previous step, select a setting in React to Critical Dates. Select any value except No to prorate the payroll code’s value by using the dates of sickness absence recorded for the current period.
  6. Click Save to save the change to the settings.