To: PAAT Basic and Advanced Users, ePar Complex Originators, Finance Campus Unit Leads, Business Managers
From: Walter Miller, Director of Payroll Services
We are excited to announce a new retroactive payroll distribution program launching for payrolls beginning with the B16 payroll (pay day February 12, 2021). This program distributes retro pay, primarily retroactive salary changes, to the latest funding sources on record for that previous cycle and is intended to reduce the number of PAATs campus users need to submit.
Please find more details below. This info will be posted to CCINFO in the coming weeks. If you have questions, please contact the Business Systems Help Desk at 919-962-HELP.
Retroactive Pay Distribution Process
Currently when an employee receives retroactive pay in a payroll, the pay is distributed to the employee’s current funding sources. Due to this functionality department users need to submit PAAT actions after payroll distribution is complete to move the retro pay to the correct funding sources that were in place during the retroactive work period.
We are implementing a custom program to be used during payroll distribution that will identify most retroactive payments and distribute the pay to the funding sources in place during the retroactive work period.
The intent of this program is to:
- Reduce the number of PAAT actions needed when employees receive retroactive pay, like during the Annual Raise Process / Legislative Increase. This program is not a replacement for PAAT but should significantly reduce the number of actions needed for retro pay increases/decreases.
- Determine the funding combo codes and distribution percentages for the retro pay based on how the employee’s pay during the retroactive period is currently funded.
- If the pay during the retro work period has been adjusted via PAAT, the program will use the funding sources from the most recent distributed PAAT action.
- If the funding sources during the retroactive work period have expired** or are no longer valid the retro pay will be charged to the home department’s suspense. (**Reporting/Closed projects, combo edit errors etc.)
- The retro must have earnings in order to be distributed to the retro funding sources. Retroactive deductions and taxes (without associated retro earnings) is out of scope for this program.
The program uses earn code configuration pages to identify 1) retroactive pay on the current payroll and 2) valid funding sources that can be used from the retro work period. This means if the retro pay doesn’t have the correct earn code, it won’t be picked up by this program. In addition, if the earn codes used during the retroactive work period are not on the funding configuration table, the retro pay will be charged to suspense.
Here is the list of retro earn codes that the program will distribute. Retros on any other earn code will NOT be adjusted (like lump sum payments for older work period or mobile stipend funding changes):
|RLO||Retro Annual Longevity|
|RRF||Retro Regular (No FICA)|
Known exceptions for the new retro pay distribution program:
- Retroactive deductions and taxes, without associated retro earnings, will not be adjusted.
- Retro pay that crosses between company and/or paygroup will not be adjusted.
- Transfers between temp and perm
- Transfers between SHRA and EHRA
- NIH salary caps and effort percentages will not be accounted for by the program.
- If a paycheck during the retroactive work period doesn’t exist, the retro will remain on current funding.
- If the funding sources during the retroactive work period have expired and/or are no longer valid, the retro pay will be charged to the home department’s suspense.
- Projects in closed, hold or reporting status
- Combo edit errors
- Chartfield values that have be inactivated
Frequently Asked Questions
- When will retro pay distribution be ran each month?
- The new program will run with each biweekly and monthly payroll, during the distribution process. This program should not impact monthly closing deadlines.
- What if an employee has both regular and supplemental earnings on the same job record/employee record? Will this program ignore the supplemental funding?
- When retroactive pay is distributed, it will receive the same funding sources on the employee’s job record/ employee record during the retroactive work period. For example, if an employee receives retro pay on employee record 0, which has regular earnings on state funding and supplemental earnings on trust funding during the retro work period, the retro will also be split between state and trust.
- What happens if a PAAT action to change the retroactive work period funding is in process (pending approval) during payroll distribution? Will the pending PAAT be taken into consideration by this new program?
- No, PAAT actions need to be fully approved and distributed prior to the payroll confirm deadline in order for those funding sources to be used by this new program. Another PAAT action to adjust the retro pay funding will need to be processed.
- How will the retro pay be distributed if it’s effective for several pay cycles but the funding was different on each cycle? For example, a $1,000/mo retro pay increase in September effective back to July 1, but the employee was funded by Project A on July 1-15 and then changed to Project B effective July 16?
- The retro pay distribution will calculate the portion of retro that applies to each pay period, and then distribute to the final regular funding sources for that employee record. In this example, the $2,000 net retro pay for 7/1-8/31 would be distributed as $439 RRG to Project A** (48% of July’s paycheck) and $1,516 RRG to Project B (52% of July’s paycheck and 100% of August’s paycheck). **Note – if Project A is now in Reporting or Closed status, then that $439 RRG portion would be distributed to the home department’s suspense.
- Can we specify to only post a retro pay increase to select funding sources (such as only to the employee’s state funding, but not to their trust funding)?
- Not at this time. If the department needs to change the retro pay distribution to be different from how the retro work period’s pay was distributed for their employee record then you will need to submit a PAAT action once the RRG has been paid and distributed. You may also need to submit a fund swap ePAR for their future paychecks if the retro pay increase was a result of the ARP process (which also applies across all of their funding sources for that job record.)
The retro pay also cannot be designated to only distribute to a project as cost sharing if the employee is subject to a sponsor’s salary cap, and that cap was already met on the retro work period. The retro pay will be systematically distributed to all of their regular funding for the retro work period. The department would then need to submit a PAAT action to move the RRG from the direct charges on the grant to increase the cost sharing instead, to ensure the project is not overcharged for the employee’s percent of effort based on the salary cap. And probably also submit a fund swap ePAR to correct the distribution for future paychecks if the retro pay increase was related to ARP.
- My 9-month faculty is funded by state funds, but was also paid for summer research on a grant via Lump Sum ePAR. Will the ARP retro pay also include an adjustment for that summer pay? Will that retro pay be distributed to both the state funds AND the grant if both were paid in July’s paycheck?
- The ARPs only increase the regular earnings, and the new retro pay distribution process will only distribute that associated RRG with their regular 9-month appointment/position funding sources (the REG and like earn codes only). Any retroactive increases to their Summer lump sums (which would have been based on their base salary in place at the time) would continue to require a new lump sum ePAR to be submitted as appropriate. And just like any other lump sum would have the funding source designated by the ePAR submitter on the ePAR’s funding grid.
- My employee was overpaid and the recovery is being docked from their future checks in several installments. Will those retroactive overpayment recovery credits be automatically distributed to the original overpaid funding sources?
- The dock-in-pay transactions (such as earn code DOC) are not included in the new retro pay distribution process, so those credits will continue to be distributed to the employee’s *current* funding sources. Departments must continue monitoring the overpayment recoveries and contacting their School/MOU Advanced PAAT User to submit the appropriate PAAT actions to move the credits as needed.
Reminder for PAAT Advanced Users: after completing the Earnings PAAT to move the negative earnings, you will need to review the PAAT’s distribution and then submit a Deductions and Taxes Only PAAT to also redistribute the fringe as needed. Unlike basic earnings PAAT actions, the fringe doesn’t always get automatically re-distributed via PAAT for negative earnings adjustments.
And a general suggestion for overpayments: If the overpayment resulted in a sponsored project being overcharged, you may want to move that excess to departmental funds instead and then move the recovery credit installments accordingly. Otherwise you might risk the overcharge getting billed to the sponsor “as is” and the project closed before all of the recovery credits can be applied to the same grant.