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Forums Human Capital Management Lawson S3 HR/Payroll/Benefits

Hourly vs Salaried

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Mary Porter
Veteran Member
Posts: 337
Veteran Member
7/9/2015 12:33 AM
    We have all employees set up as hourly employees. If an exempt person doesn't work for a day and doesn't have PTO then they don't get paid for that day, or if an exempt employee terminates mid-week, they don't get paid for the rest of the week. The consultants that set up the system advised to make everyone hourly. Our new comp & benefits director wants to know why we don't have exempt employees classified as salaried. From what I can see from testing, if I am salaried I get paid 1/26th of my salary no matter if I work 1 hour or 80 hours per the time records. So I believe that in our situation, the only way to manage the pay practice is to have everyone as hourly, otherwise, payroll would have to manually calculate the salary if an exempt employee didn't work their full hours. Am I on track with this reasoning?
    thekboose
    Advanced Member
    Posts: 19
    Advanced Member
    7/9/2015 7:24 PM

      Review the use of pay code calculation types. When using "percentage rate" calculation type at 100%, the application will calculate a salaried employees wages based on the hours entered on the timerecord (as if they were hourly).

       

      To clarify - this is how the pay code calculation type affects how wages are calculated for hourly vs. salaried employees 

      Normal Rate—The rate on the time record (using pay rate defaulting logic) is used to calculate earnings.
      • Hourly: Hours * Rate = Gross Pay
      • Salaried: Annual Salary / the number of Pay Periods (as defined by the employee's Pay Frequency) = Gross Pay.

      Percentage Rate—A percentage is entered in the Rate field, the Premium field, or both on the pay code.
      • Hourly: Rate * Percentage * Hours = Gross Pay
      • Salaried: Annual Salary / (Annual Hours * FTE) = Hourly Rate; Hourly Rate * Percentage * Hours = Gross Pay