Back Pay

This article is about Humanforce Payroll. For help with Humanforce Workforce Management, start here.

The Back Pay module will automatically calculate Back Pay owed to an employee or group of employees and then generate the Pay Adjustment transaction to be paid. Note that entering a past dated rate increase via Employee Maintenance will not generate the actual back pay. The back pay can only be calculated via the Back Pay module.

Where Rate Overrides have been used (either by Rate Set or manually overriding 
the Rate) the Back Pay Calculation in Employee Rate will not include Rate Override 
Transactions when calculating a Back Pay.

Setting up the Back Pay module

To use the Back Pay module you will need to:

1. Add the menu item Back Pay via Menu Construction.
2. Add the following two RMS Reports to Payroll Report Configuration, so the reports can be generated at Pay Calculation and reviewed before authorising the payroll:
   • Back Pay Reconciliation CSV
   • Back Pay Reconciliation PDF.

3. Set up the following Pay Elements and ensure the Is Back Pay check box is ticked for each, so that the system knows which Pay Elements to automatically allocate the calculation to:

   • Back Pay Normal (OTE)

   • Back Pay Overtime (non OTE) and

   • Back Pay After Tax (non OTE).

Create Back Pay records

There are three different ways in which Back Pays can be calculated:

• Employee Rate, for when you need to calculate a Back Pay for a specific employee
• Allowance, for when there is a change to an Allowance that is an Amount by Unit or Amount By Frequency
• Rate Set, for when there is a change in a rate for a Rate Set.

Employee Rate

The Employee Rate method is used to calculate a Back Pay for a specific employee.

1. Go to Payroll > Payroll Utilities > Back Pay or enter Back Pay in the search bar.
2. Make sure you're on the Employee Rate tab and click on the + icon to add a new Back Pay.
3. In the Payroll drop box, select the Payroll to which the employee belongs.
4. In the Employee drop box, start typing the employee name and use the auto complete options to select the required employee.
5. When you select the employee, the current rates will then be displayed for your reference.
6. In the Selection Type drop-down, select whether the Back Pay is to be calculated by By Rate, By Rate Set or By Job Classification.
   
   For monthly paid employees, the Selection Type will default to By Rate and the selection of the rate depends on your customer rate setup. Refer to your Customer Rate to see which rate is used to calculate the FTE Monthly Salary and the Hourly Rate.
   
   Rate Set would be used if the back pay you were wanting to be calculating for the employee was to be based on a Rate Set amount. Even if the employee is currently not on a Rate Set, you can still select the Rate Set that they should have been paid for the nominated period.  If you select Rate Set, you will be selecting the Rate Set that the employee should have been on.
   
   Job Classification would be used if you have Job Classifications linked to a Rate Set. When you have selected By Job Classification you will then be able to select the date range and the Back Pay will be calculated based on the Rate Set linked to that Job Classification. The dates and Job Classification entered on the Back Pay, once accepted, will be updated in the employee masterfile if the To date is left blank. This will also re-interpret an employee’s timesheet if the Job Classification is attached to an Award, even if it has been Authorised.
   
   
7. In the From and To fields indicate the date range for which you want the Back Pay calculated. Note that:
   • the date range selected can only be full pay periods, unless for Period Salary (Monthly) employees
   • if you leave the To date blank, the system will automatically update the current rate for the employee in the Employee Maintenance.
   • the From date cannot be earlier than 1 year from the current period end date.  It is recommended that Back Pays are processed within the current financial year.
8. If using By Rate calculation, enter in the New Rate Amount. For Period Salary (Monthly) employees, enter the new annual salary.
9. Click Create.
10. Review the details you've entered and click Update to make any changes needed.
11. When you're satisfied with the details you've entered, click Calculate.
12. A Back Pay Result pop-up will give you the options to Download Result, Accept Result, or Reject Result. Click Download Result.
13. A CSV document will download, with a breakdown of the Back Pay calculation for each Pay Period.  The CSV will breakdown each pay process with the Pay Elements that were paid. It then shows the Old Value, New Value and the Difference and then the calculated Amount owed for each process.
14. If you are not happy with the result, click Reject Result.
15. If you are If you are happy with the calculation, then click Accept Result.
16. When you accept the result:
    • the List of Back Pay Employee Rates will then show the Pay Process and Payslip Number that has been assigned, in the Status field
    • the system automatically creates the Pay Adjustment for you and marks it as Include in EFT
    • the employee’s rate and corresponding rate history is automatically updated to the new rate..
17. Note that here is no option to then edit the Pay Adjustment. It can only be deleted. 
    If you delete the Pay adjustment, the employee’s rate remains as the new rate entered in the Back Pay. For Period Salary employees, you will have to go into the Employee’s Pay Tab to manually reinstate the rate to the previous rate prior to accepting the back pay, if you want to recalculate the back pay and accept again.
18. To view the Back Pay Reconciliation as a PDF, open the Pay Adjustment and click Back Pay Reconciliation.
19. You can also view Back Pay Reconciliation Reports via Employee > Employee Any Pay Enquiry and clicking on the file icon on the Back Pay Report column.

Additional information in relation to Back Pay for Period Salary (Monthly) employees

You can make back pays effective part way through a pay period. The Back Pay calculation will take the number of working days per month into account. This includes Leave Without Pay (LWOP), which will be treated as per normal with Period Paid Salaries.  If LWOP is spread across two months e.g. 31/12/2020 – 04/01/2021 and the back pay is effective part way through the LWOP absence e.g. 01/01/2021, the system will calculate the back pay from 01/01/2021 and will exclude the LWOP for 31/12/2020.

Government Paid Parental Leave (Govt PPL) is included in back pay calculations and is Non OTE. 

If an employee has been taken ½ pay LSL, the system will treat 1 week as 5 working days and use a similar methodology to LWOP.

If Overtime is processed in timesheets with dates, the calculation will include or exclude these from back pays depending on the effective date of the back pay increase. The system is  able to do this (for Period Salary employees only)as, any Overtime pay element that has dates will not be consolidated into 1 entry, they remain itemised with the original dates entered.

If you do not enter any dates for Overtime, the system will consolidate the figures and include it in the back pay for the month in which it was paid.  For example, if two overtime Pay Elements were paid in November 2020 and have no dates entered, and a back pay is effective mid-way through November, all the overtime hours will be included in the back pay calculation.

Leave Loading does not have dates. Therefore, if a back pay is calculated for a month when leave loading was paid, the leave loading will be included regardless of the effective date of the back pay or the annual leave.

If Extra Hours Worked for Part Time employees are paid and dates are entered, they will be included in the back pay calculation if they fall within the effective date.

The back pay report will include these as a separate item and will base them on the employee’s hourly rate (which is usually auto-calculated from the FTE Annual PA).

If you use the Payroll Leave Setting Is LSL Paid using Average Hours for Period Salary? then when a back pay is calculated on LSL it will calculate a figure based on the employee’s current work pattern hours and their LSL Average hours.

Multi-costing will be applied if employee’s have multiple cost centres.

Allowance

Back Pays can be calculated when there is a change to an Allowance which is an Amount by Unit or Amount By Frequency. This could be a First Aid, CRIB or Kilometres that are paid to the employees. 

1. Go to Payroll > Payroll Utilities > Back Pay or enter Back Pay in the search bar.
2. Make sure you're on the Allowance tab and click on the + icon to add new Back Pays.
   
   
   
3. In the Pay Element drop-down, select the Pay Element you want to update. When you select the Pay Element, the current values will be displayed for your reference.
4. Select the Effective Date of the change and then select if you want Terminated Employees to be included in the Back Pay calculation.
5. Enter in the New Value of the Pay Element. The Customer Pay Element will be updated when  the Back Pay Transaction is accepted. If, however an employee has a different amount for that Pay Element on their masterfile, then it will not be updated as the rate of the Old Value is not the same.
6. Click Create.
7. In the List of Selections header row, click the + icon to indicate Employees, Cost Centres or Payrolls to which the Back Pay should apply.
   
8. Select the desired Type and values and click Create. Repeat as many times as needed. 
   Note that if you select any Cost Centres then the Pay Element cannot be automatically updated.
   
9. Once you have added your required Selections, click Calculate.
10. A Back Pay Result pop-up will give you the options to Download Result, Accept Result, or Reject Result. Click Download Result.
11. A CSV document will download that will display the employees who received the allowance in the date range and the back pay owed to them.
12. If you are not happy with the result, click Reject Result. The calculation can then not be changed. You would need to calculate again if you wanted to review results.
13. If you are If you are happy with the calculation, then click Accept Result.
14. When you accept the result:
    • the Status field in the List of Back Pay Allowances will show as Accepted
    • the system automatically creates the Pay Adjustment for you and marks it as Include in EFT.
15. To view the Back Pay Reconciliation as a PDF, open the Pay Adjustment and click Back Pay Reconciliation. Note that here is no option to then edit the Pay Adjustment. It can only be deleted.
16. You can also view Back Pay Reconciliation Reports via Employee > Employee Any Pay Enquiry and clicking on the file icon on the Back Pay Report column.

Rate Set

A Back Pay can be calculated using the change in a rate for a Rate Set. Humanforce Payroll will calculate a Back Pay for any employees that had been paid during the selected period.

1. Go to Payroll > Payroll Utilities > Back Pay or enter Back Pay in the search bar.
2. Make sure you're on the Rate Set tab and click on the + icon to add new Back Pays.
3. In the Rate Set and Rate drop-downs, select the Rate Set and the Rate for which you need to calculate Back Pay. When you have selected the Rate Set and Rate, the current value of the Rate Amount will be displayed for your reference.
4. Select the Pay Period you want to use for the calculation. If Date To is left blank, the value in the Rate Set and also the amount on the affected employees' masterfiles will be updated.
5. Enter in the New Rate Amount
6. Indicate if the back pay calculation is to be done for Terminated Employees
7. Click Create
8. A Back Pay Result pop-up will give you the options to Download Result, Accept Result, or Reject Result. Click Download Result.
9. A CSV filed will download with the breakdown of OTE and Non OTE back pay owed to any affected employees. Review the Back Pay calculations.
10. If you are not happy with the result, click Reject Result. The calculation can then not be changed. You would need to calculate again if you wanted to review results.
11. If you are If you are happy with the calculation, then click Accept Result.
12. When you accept the result:
    • the Status field in the List of Back Pay Allowances will show as Accepted, with a number in brackets that indicates how many employees have been included in the Back Pays calculated.
    • the system automatically creates the Pay Adjustments for you and marks them as Include in EFT for processing in the next pay run.
13. To view the Back Pay Reconciliation as a PDF, open the Pay Adjustment and click Back Pay Reconciliation. Note that here is no option to then edit the Pay Adjustment. It can only be deleted.
14. You can also view Back Pay Reconciliation Reports via Employee > Employee Any Pay Enquiry and clicking on the file icon on the Back Pay Report column.