Issue/Symptom/Question

Administering Prevailing Wage Payroll- Self-Adjusting Hourly Fringe Benefit

Applies To

Penta for Windows

Payroll

Reference Manual

Resolution/Fix/Answer

After completing this Business Process, you will have configured and processed payroll for Prevailing Wage / Davis – Bacon jobs using the Self-Adjusting Hourly Fringe Benefit method.

This Business Process is intended for Payroll personnel and prevailing wage administrators.

Prerequisites

• Set up Job Information
• Defined Payroll Classes
• Employee Payroll Information is set up for all employees affected by prevailing wage
• In the Options window, query and review System Options affecting prevailing wage payroll:
  • Option # 185 (Spec Pay Rt vs Prevailing Wage): Review the Alphabetic /Boolean Value. Change if needed:
    • Y = Special Pay Rate Overrides Prevailing Wage
    • N = Special Rate is only used if greater than Prevailing Rate
  • Option # 199 (Edit Job Fringe Override): Review the Alphabetic / Boolean Value. Change if needed.
    • Y = Provide warning when job specific fringe not set up
    • N = Do not provide warning
• In the Define Users window, query each appropriate user and review user security affecting prevailing wage payroll:
  1. Query a User Id.
  2. In the Module Security tab, under Module PRTE, review the setting of the “Can access override certified code” Action and change it if needed.

1. Define Payroll Classes for Prevailing Wage Payroll Processing Using the Self-adjusting Hourly Fringe Benefit Method

A. Create a Fringe Benefit to govern prevailing wage processing using a Self-Adjusting Hourly Fringe Benefit.

Payroll > Setup > Pay Groups, Payroll Classes and Workers Compensation >Union Fringe Benefit Information

1. Create a unique identifier in the Fringe Number field.
2. Create a Description for the Fringe Number.
   Note: PENTA prints this Description on check stubs and advise notices when payroll processing results in payment of this fringe benefit.
3. Close the window.

B. Assign the fringe benefit and Self-adjusting Hourly Fringe calculation base to Payroll Classes requiring prevailing wage payroll processing using the Self-Adjusting Hourly Fringe method.

Fringe Calculation Base #14 tells PENTA that the Self-Adjusting Hourly Fringe method of prevailing wage processing applies to the Payroll Class.

Notes:

• You cannot assign the prevailing wage Self-Adjusting Fringe Benefit calculation base to payroll classes assigned the prevailing wage Cash Fringe (Calculation Base #19).
• If an employee’s master record (Employee Payroll Information window) has a Prevailing Wage Comparison Benefit Value and is paid in a Payroll Class that has a Self-Adjusting fringe assigned, PENTA uses the Prevailing Wage Comparison Benefit Value, not the Self-Adjusting fringe.

Payroll > Setup > Pay Groups, Payroll Classes and Workers Compensation > Payroll Classes

1. Query a Payroll Class.
2. Click on the Fringe Benefits tab.
3. In the Fringe Benefit # field, enter the number of the fringe you defined to govern self-adjusting hourly fringe benefit prevailing wage payroll processing.
4. Enter Y in the Taxable field.
5. Enter Y in the Add to Gross field.
6. Enter N in the Deduct From Check/Employee Paid field.
7. Enter an Effective Date in the Calculation Information block.
8. In the Calc Base # field, enter 14.
9. If you are not using job-specific fringe records (see Step 3.B), enter a generic fringe rate in the Amount field. This amount is typically the per hour benefit portion of a prevailing wage determination.
10. If you are not using job-specific fringe records (see Step 3.B), use the Max Fringe Per Hour field to enter a generic total per hour value. This is typically a job’s full wage determination ( hourly pay rate plus fringe benefit rate) for the class of workers represented by the Payroll Class. PENTA uses this value to control the self-adjusting behavior of fringe Calculation Base 14. (See Step 6).
11. If you are not using job-specific fringe records (see Step 3.B) and you require different generic rates for different Pay Rate #s click the Pay Rate Ovr button and establish those rates in the pop-up.
12. If certain Pay Rate #s apply to employees who are exempt from prevailing wage requirements, click on the Inelig Rates button and list those rate numbers in the pop-up.
    Note: Prevailing wage processing affects hourly pay rates. Salaried Pay Rate #s not entered as ineligible cause salaried employees to receive the fringe at the stated amount per hour (not self-adjusted).
13. Repeat steps 1.B. 1 to 1.B.12 for each prevailing wage Payroll Class.
14. Close the window.

2. Identify Jobs Subject to Prevailing Wage Regulations

A. Mark appropriate jobs as being subject to prevailing wage rates.

Project Management > Jobs > Job Information

1. Query a Job that is subject to prevailing wage regulations.
2. In the Other tab’s Payroll sub-tab, place a checkmark in the Prevailing Wage/Davis Bacon box.
3. In the Other tab’s Reporting sub-tab, place a checkmark in the Certified Report Required box.
4. Repeat steps 2.A.1 – 2.A.3 for each job subject to prevailing wage regulations.
5. Close the window.

3. Establish Prevailing Wage Determination Rates

Refer to published prevailing wage determinations to obtain hourly wage and benefit rates to establish for your prevailing wage jobs.

A. Establish job pay rates per prevailing wage determination publications.

Project Management > Jobs > Job Standard Charge Schedules > Job Pay Rate/Standard Charge Schedule

Typically, you use the Job Pay Rate / Standard Charge Schedule to establish the hourly pay rate portion of a prevailing wage determination. If appropriate for your organization and jobs, you may may also use other schedules in the standard pay rate selection hierarchy.

1. Enter the Job Id.
2. PENTA populates the Currency field with currency of the Job’s OU.
3. Enter the Effective Date.
4. Either use the ‘Copy from another Schedule’ button to open the ‘copy from’ pop-up to specify parameters and execute the copy, or manually define the job pay rate information by:
   1. Entering a Payroll Class # associated with a Self-Adjusting Hourly Fringe Benefit (Calculation Base 14).
      PENTA populates the Currency field with the currency assigned to the Payroll Class.
   2. Entering a Pay Rate # that exists for the Payroll Class.
   3. Using the Hourly Pay Rates fields to enter the Job’s pay rates per the prevailing wage determination.
   4. For each affected Pay Rate # in the Payroll Class, adding a new Payroll Class/Pay Rate Markups record and repeating steps 3.A.3.a – 3.A.3.c.
5. For each affected Payroll Class, add a new Job Pay Rate/Standard Charge Schedule and repeat steps 3.A.1 – 3.A. 3.
6. Repeat steps 3.A.1 – 3.A.4 for each prevailing wage job and rate effective date.
7. Close the window.

B. Establish job benefit rates per prevailing wage determination publications.

Project Management > Jobs > Job Standard Charge Schedules > Job Fringe Overrides

1. Either use the ‘Copy Fringe Overrides’ button to open the Copy Fringe Overrides pop-up to specify parameters and execute the copy, or manually define the job fringe information by:
   1. Entering the Job ID.
   2. Entering the Payroll Class # of a class associated with a Calculation Base 14 fringe benefit.
   3. Entering the Calculation Base 14 Fringe Benefit #.
   4. Entering Effective Date.
   5. Setting the Override Status to “A.”
      PENTA populates the Calc Base # field with 14 (i.e., the calculation base of the assigned Fringe Benefit #).
   6. Entering the per hour value of the benefit portion of the applicable prevailing wage determination in the Amount field.
   7. Entering the maximum hourly amount for the job in the Maximum Fringe/Hour field.
      This is typically the job’s full wage determination ( hourly pay rate plus fringe benefit rate) for the class of workers represented by the Payroll Class. PENTA uses this value to control the self-adjusting behavior of fringe Calculation Base 14. (See Step 6)
   8. Clicking the Pay Rate Overrides button and establishing appropriate amounts in the pop-up—if the wage determination varies for different Pay Rate #s.
2. Repeat step 3.B.1 for each of your prevailing wage job/payroll class combinations.
3. Close the window.

4. Identify Employees in Prevailing Wage Work Classifications Who Must be Reported on Certified Payroll Reports

A. Identify employees in prevailing wage work classifications who must be reported on Certified Payroll reports.

Payroll > Employees > Employee Payroll Information

1. Query the employee.
2. Click on the Reporting tab.
3. Enter Y in the Incl. On Cert. PR Rpts field.
   This flag provides the default value for the Include on Cert PR Rpts field on timecards, which in turn controls inclusion of the timecard hours on Certified Payroll Reports.
4. Repeat 4.A.1 – 4.A.3 for each employee in prevailing wage work classifications who must be reported on Certified Payroll reports.
5. Close the window.

5. Process Payroll for Certified Payroll Jobs

A. Process payroll so PENTA can determine pay rates and fringe benefit payment.

1. Complete the suite of Processing Payroll Business Processes.
   Notes:
   • When the Job Information window’s Prevailing Wage/Davis-Bacon box contains a checkmark, payroll processing uses PENTA’s standard pay rate selection hierarchy to select a pay rate for hours charged to the job. The source of the selected pay rate determines PENTA’s actions. When the rate is selected from:
     • A pay rate schedule – PENTA compares the selected hourly rate to the employee’s normal hourly rate (found on the Employee Payroll Information window Pay Rate tab) and uses the higher of the two rates to pay the employee for hours charged to that job.
     • A Pay Rate # keyed on a timecard as an override of the Pay Rate # defaulted on the timecard – PENTA uses the rate associated with the timecard override rate number to pay the employee for hours charged to that job.
     • The Special Pay Rate field on the timecard – PENTA uses the rate per the setting of System Option 185 ((Spec Pay Rt vs Prevailing Wage)):
       • Y = special pay rate used regardless of whether it is greater than or less than the employe’s normal rate and job schedule rates.
       • N = special pay rate is used only if it is greater than the higher of the employee’s normal rate and job schedule rates.
   • When the job or the associated payroll class has a Calculation Base 14 fringe assigned, PENTA does the following during labor distribution:
     • Adds Shift Premiums, Hazard Duty, and Add To rates to the selected pay rate to determine the total hourly pay rate.
     • If the total hourly pay rate exceeds the fringe’s Maximum Fringe Per Hour value, PENTA does not pay the fringe.
     • If the total hourly pay rate is less than the fringe’s Maximum Fringe Per Hour value, PENTA determines the rate at which to pay the fringe by adding the total hourly pay rate to the fringe per hour rate (Amount). If the result is:
       • less than or equal to the fringe’s Maximum Fringe Per Hour value, PENTA pays the fringe at the assigned hourly rate.
       • greater than the fringe’s Maximum Fringe Per Hour value, PENTA reduces the fringe’s assigned hourly rate to the rate that brings the employee’s pay (total hourly pay rate plus adjusted fringe rate) up to the Maximum Fringe Per Hour value.

     Example:

     Selected hourly pay rate = $20.00

     Job Fringe Override Amount = $10.00

     Job Fringe Override Maximum Fringe /Hour = $28.00

     Adjusted fringe rate = $8.00

6. Prepare and Submit Certified Payroll Reports

A. Prepare and submit Certified Payroll Reports

1. Refer to and perform the Certified Payroll Reporting Business Process.