Payroll Authorization(PA) Training

1. Payroll Authorization(PA) Training Presented by Merenda Tate

2. What this training WILL NOT Cover • Supplemental forms • Details of Benefit Eligibility • Leave of Absence (LOA) processing • Vacation or personal time allocation/usage • Timesheet, or paycheck-related questions Dartmouth College

3. Objectives Before you leave this class, you should be able to: • Understand the process flow of the Payroll Authorization(PA) • Learn the Anatomy of the Payroll Authorization(PA) • Be aware of recent Form Changes • Identify difference between Correct versus Incorrect PA • Learn how to fill out the PA correctly through practical examples • Understand the impact of Payroll Authorization(PA) to all employees • Late PAs • Retro PAs Dartmouth College

4. Question 1 Can you guess how many Payroll Authorizations EIS processed last year? Dartmouth College

5. Answer: 7,920 Dartmouth College

6. Process Map of a Payroll Authorization Dartmouth College

7. Payroll Authorizations(PA) Processed for 2008 Dartmouth College

8. Anatomy of the Regular PA Dartmouth College

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11. Critical Items missed on PA Under the Employment Status Section: 1. Please mark one value from each of these groups: a. monthly/Salaried Staff, Faculty, Research Fellow, Research Associate A/B/C, hourly/hourly staff, Non-Union Service, Union- SEIU, Union- IATSE b. Temporary, Regular Reason why we need this information: We need to know both pieces about each person in order to give them the appropriate benefits. Dartmouth College

12. Critical Items missed on PA cont’d Under the Section 1, Personal Data: 1. Please include Hours/week for all staff. Reason why we need this information: Without this information we cannot determine whether the person is benefit eligible. 2. Please make sure that the Citizenship field is filled out. Reason why we need this information: This is critical for ensuring that we are complying with the appropriate tax laws. 3. Please list the Date of Birth and Social Security Number. Reason why we need this information: Without this information listed EIS simply cannot enter the PA. However, the assignment # and DartID are acceptable substitutes for SSN, with the exception of a New Hire PA. 4. List the middle name or initial (if applicable). Reason why we need this information: You would be surprised at the number of duplicate names! Dartmouth College

13. Critical Items missed on PA cont’d Under Section 2, Position/Funding/Labor Distribution: 1. Please list the position number if a regular staff employee. Reason why we need this information: This helps us to ensure that we are assigning the person the correct title, grade, and department. 2. Please list the natural class on the account string. Reason why we need this information: This helps us to understand what it is you are trying to do. 3. Please list the Rate of Pay and/or Salary Reason why we need this information: That's an easy one! Dartmouth College

14. Critical Items on PA cont’d Under section 3, Termination Data: 1. Please be sure to include the Forwarding address if the employee provides it. Under Section 4, Approvals, Contact Information, Comments: 2. Please make sure to explain clearly the intended pay action in the 'Comments' section to ensure clarity. Dartmouth College

15. Incorrect Payroll Authorizations Example How they should not be filled out Dartmouth College

16. Incorrect Revised Salary PA example Dartmouth College

17. Incorrect Revised Salary PA Example Dartmouth College

18. Correct Payroll Authorizations Example How they should be filled out Dartmouth College

19. Correct New Hire PA Example Dartmouth College

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21. Late and Retro Payroll Authorizations Are Late PAs really a big deal? Who is impacted by late and retro PAs? Dartmouth College

22. Problematic Payroll Authorizations New Hire Terms Rehires/New Faculty Contracts Full Time Equivalency(FTE) Status Changes Dartmouth College

23. New Hire PA PA’s for New Hires should be received in EIS at least two weeks prior to the employee’s start date. There is negative impact if the New Hire PA is NOT received on time. HR Employee Relations Impact: • Will not begin work on day one • No access health benefits (i.e. taking advantage of co-payment, urgent medical/dental service) • No Blitz email account • No system access to phone directory listing, ID badge, CorpTime, and access to secure websites. • General employee frustration of not having any of the required the access, and to begin work in time planned. • Retroactive Benefits(Arrearages entered in paychecks late and cause financial hardship) Payroll and Benefits Impact: • Retroactive benefits, which means arrearages must be manually entered into paychecks causing extensive work for HR Benefits • No Benefits packet at New Employee Orientation to begin benefit selection • Delayed data entry into HR system to begin record in efforts to pay new employee (especially in cases where Employee Information Services(EIS) is in a week processing a Biweekly payroll) Dartmouth College

24. New Hire PA cont’d There is a Positive impact if Employee Information Services (EIS) receives a New Hire PA ON time: HR Employee Relations Impact: • No employee frustration • Has a Blitz/email account before start date • Will have a phone directory listing and an ID badge • Access to secure websites and CorpTime Payroll and Benefits Impact: • Employees are paid on time • Employees are eligible for benefits on their hire date, and can enroll Dartmouth College

25. Termination PA Term PA’s should be received in EIS at least two weeks prior to the employee’s termination date. When a termination PA is late, this causes very serious problems for EIS, HR Benefits, and the employee. • Federal and State law MANDATE that a HR Benefits department must provide employees with a COBRA notice and option to port or convert their life insurance when they leave Dartmouth or are no longer occupying a benefitted position within 30 days of the event. • Payroll spends .4 FTE annually on overpayment collections caused by late PA’s. There was $175,000 in overpayments due to late PA’s in calendar year 2008. Dartmouth College

26. Termination PA cont’d The impact of Employee Information Services(EIS) receiving a Late Term PA are below: HR Benefits Impact: • Employees prefer to have this information before their active insurance ends so that they do not go without coverage. This is especially in cases where an employee is seeking insurance coverage when going to another employer. • If Dartmouth misses the 30-day grace period for issuing COBRA, Dartmouth incurs legal fines due to being out of COBRA compliance. HR Employee Relations: • No coverage, which violates employee rights under ERISA, and potential legal litigation. • Delay in vacation payout (Can impact employee financially and create financial hardship) • If COBRA is retroactive to the term date, the individual will be required to pay for any medical/dental services up front in order to receive treatment. Dartmouth College

27. Rehires and Changes to Faculty Contracts Rehire or Re-appointment PA’s should be received in EIS at least two weeks prior to the effective date. Due to system limitations, the data transfer between the HR/Payroll system and HR Benefits system, does not reset employee benefits automatically when there was a previous termination in HR/Payroll system. The data is either removed or corrected. HR Employee Relations Impact: • Employee will not have benefits as the system still terminates it. • Employees lose their coverage and have no deductions in their paychecks. (This is often identified when the employee calls HR Benefits because their check is wrong or they could not get a prescription) Dartmouth College

28. Changes to Full Time Equivalency (FTE) A change in hours or FTE has an effect on how much an individual pays for their health insurance. HR Impact: • When retroactive changes to FTEs are requested, AND the employee is decreasing hours, it causes problems as HR Benefits must catch them up for when they were receiving more money than they should have been. HR Employee Relations/Payroll Impact: • When retroactive changes to FTEs are requested, AND the employees is increasing hours, the employees are usually more anxious to receive their increased allotment and contact EIS to verify when increase is in effect and how it impacts their pay. Dartmouth College

29. Changes to Employee Status A change in employee status, such as hourly to monthly, or Research Fellow to Research Associate, affects how the benefits are paid, and in the case of researchers, how they are taxed. HR Payroll and Employee Relations Impact: • Changing from hourly to monthly or vice versa will cause manual benefit calculation and data entry. • Retroactive PAs affect the employee’s pay much later and usually with a larger amount. • When an employee is switched from Research Fellow to Research Associate taxation comes into play, particularly with Research Fellows. • Retroactive PAs for a Fellow will cause substantial taxes to the employee, which can cause financial hardship. Dartmouth College

30. Question 2 Can you guess which Payroll Authorizations(PA) are usually late? Dartmouth College

31. Answer Additional Payments Terminations New Hire Students Revised Rate Dartmouth College

32. Late PAs by Action Dartmouth College

33. Late PAs 2008 Dartmouth College

34. Special Payroll Authorizations Dartmouth College

35. Special PA Payment Types Recognition/discretionary/one-time add'l compensation • This payment type would be used for payments that are related to achievements accomplished as may be outlined in performance reward programs or specific performance related agreements. Relocation or signing compensation • This payment type would be used for a sum of money paid to a new employee as an incentive to join Dartmouth. The expectation is that these would apply to full-time salaried employees, as opposed to a temporary hire and would be a one-time payment. The relocation amount would be a sum agreed upon as an up-front payment to assist in relocation expenses to be used at the discretion of the employee. Amounts reimbursed for relocation expenses should be managed through accounts payable on the appropriate expense reimbursement forms. Dartmouth College

36. Payment Types Cont’d Commissions • This payment type is a monetary incentive for services rendered or products sold by employees in sales-related positions. Payments are normally calculated on the basis of a percentage of the goods sold and are generally outlined in a specific employment agreement. Faculty additional term/Add'l classes taught • This payment type is intended to be used when a faculty member agrees to an effort commitment outside the terms of their base appointment agreement. These payment types have been commonly referred to in A&S as “Extra Ninths”. Dartmouth College

37. Payment Types Cont’d Additional work performed • This payment type should be used for remuneration for the amount of effort applied to produce a deliverable or to accomplish a task that was assigned or undertaken significantly outside the scope of a person’s base responsibilities. The additional effort would be expected to have scheduled start and end date with specific results outlined. An example of this type of payment would be for completion of a special project assigned as part of a professional development opportunity. Other (not common, describe in comments section) • If the type of payment does not fall into any category described above, please choose this payment type and clearly describe the reason in the comments section of the PA. You will be contacted by EIS for further explanation, if needed. Dartmouth College

38. Problems EIS Sees on Special PA • Missing natural class • Payment Type # is not chosen • Missing Office Location • For Additional Payments Bi-Weekly Lump Sum payments- it’s important for EIS to have the lump sum questionnaire completed and attached to the back of the PA when submitted for backup for compliance • No total payment amount listed, only monthly amount. EIS needs to know both to be sure of correct data entry. Dartmouth College

39. Additional Payment Special PA Dartmouth College

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41. Student Special PA Dartmouth College

42. Comments need to state Graduate Student Stipend Dartmouth College

43. Student PA Facts • Are usually submitted to hire Grad students who are being paid monthly stipends from grants • Are for now have a payment type of 6 (EIS would enter those as normal procedure indicate) Dartmouth College

44. Problems EIS sees with Student Special PA • Effective dates are not usually in sync with pay dates(Departments wants students to be paid earlier than effective date listed on PA) • Multiple accounts will be listed, but the dollar associated with each account and LD percentages are not matched correctly Dartmouth College

45. Fringe Presented by: Cheryl Josler Dartmouth College

46. What is Fringe? Fringe benefits are benefits which employees receive from their employment but which are not included in their salary or wages. They include such things as retirement contributions, dart flex credits, tuition assistance, short term and long term disability pay, and workers compensation. Dartmouth College

47. Really Big Picture Dartmouth College

48. Smaller Picture (Process Flow) • PA is completed by Dept • EIS Enters PA into HRMS • Depending on the data entry, HRMS gives the person the appropriate benefits and designates the appropriate fringe rate • Account strings are entered in Labor Distribution • Payroll is Run • Payroll data is sent through the LD module – Someone’s total pay is distributed to multiple accounts • Data is sent to the General Ledger (GL) • Departments monitor their Discoverer and GL reports to see the charges • We see the credits going into the Fringe Pool Accts • Anthem, Crosby, etc get paid out of the Fringe Pool Accts Dartmouth College

49. Fringe Calculation Logic Payroll Process identifies Fringe Rate to be used Yes No Fringe0% Fellow ? No Partial Fringe24.5% Yes Statutory Fringe 9% ResearchAssociate B ? Regular, < 50% FTE Temporary (FT/PT) No No Fully Burdened38% No Regular Benefits Eligible Yes Regular No Pension Yes Dartmouth College

50. Special Payment PA How does the info on PA inform the process? Regular PA Type of Pymt: 1 2 3 4 5 6 Dartmouth College