If you are involved with payroll at your company, you have probably heard about Initiative 1433 (http://www.lni.wa.gov/WorkplaceRights/Wages/Minimum/1443.asp). This new law increases the minimum wage and establishes sick leave policy requirements for most employees. The example below shows how we will probably set up the new accrual code for sick leave. It is based on our reading of the law, you should contact your CPA, HR professional or attorney if you have questions about the law.
Setting up the Accrual Code
On the Basic Info tab of the Payroll Earnings and Deductions screen, the key point is the Employee Calculation Method of Hours per Hour Worked. This will support the 1 hour accrual for every 40 hours worked.
The Employee tab is where you specify the increment and carry-over amounts. I used only one tier for number of service years but you could certainly use more than one. I set the to 0.025 (or 1/40) for the number of hours to accrue per hour worked. Set the Max. Accrual to a large number since there is no cap. Set the Max. Carry-over (just off screen) to at least 40. Be sure to include all appropriate taxes for the sick leave payment. See note below on the “Calc Max. Carry-over based on Remaining Balance” checkbox.
The Calc. Base tab determines the “Hours Worked” portion of the calculation method. Include all earnings codes in this list. If you have salaried employees, make sure to specify the default hours on the Pay tab of the employee record as the basis for the hours worked in the pay period.
If you want to use a new accrual code and start employees with a balance for 2018 (i.e. carry-over from 2017), create a Transaction History entry for each employee to “accrue” the number of beginning hours.
I believe the out-of-the-box check forms are close to providing what is required to report to employees but may require modification. They show hours paid this pay period, hours accrued this pay period, hours accrued this year, and balance remaining. They do not show total hours paid this year but this can be calculated and added to the form. Also, we have a custom Crystal Report to show accrual balances with total accrued and paid with each employee on their own page. Let us know if you would like a copy of the report.
Calculate Maximum Carry-over Option
Sage HRMS Payroll is directly based on Sage 300 Payroll. The text below is from Sage HRMS Payroll Getting Started Guide (April 2017), © 2017 The Sage Group plc or its licensors.
Calc Max. Carry-over based on Remaining Balance: For the accrual, this check box lets you specify how Sage HRMS Payroll calculates an employee’s carry-over amount (or hours) for a new year. It tells Sage HRMS Payroll which component to compare with the Maximum Carry-Over field. The calculated carry-over amount (or hours) will vary, depending on the method chosen.
- Select this check box, if you do not want the employee’s carry over amount (or hours) to exceed the value specified in the Maximum Carry-Over field of the Earning/Deduction Codes setup window.
In this method, Sage HRMS Payroll compares the employee’s remaining balance at accrual year-end (that is, the entire unused amount or hours) with the Maximum Carry-Over field. This means that the employee’s starting balance for a new accrual year cannot exceed the Maximum Carry Over field (unless a number is specified in the Beginning column of the Earning/Deduction Codes setup window).
- Do not select this check box, if you allow employees to carry over the unused portion of the amount (or hours) accrued during the year, up to the specified maximum carry-over, PLUS any unused
amounts (or hours) carried over from the previous year.
In this method, Sage HRMS Payroll compares only the employee’s unused portion of the amount (or hours) accrued during the year with the Maximum Carry-Over field, and also carries over any unused
amounts carried over from the previous year, up to the maximum accrual.
This means that the employee’s starting balance for a new year can exceed the amount specified in the Maximum Carry-Over field.