Sample Semi-Monthly Calculations When Set Dilution Business Hours in Period from Dilution Hours Property is Turned On (legacy functionality)
When the Set Dilution Business Hours in Period from Dilution Hours property is set to True (selected), legacy dilution behavior will apply. (Admin > Properties > Time > General > Dilution Settings)
Typically, this property is only used with systems that are set up for semi-monthly or monthly timesheets in order for proration of cost to apply when charging Leave Without Pay.
The example below details how the system will calculate using the legacy functionality, which would likely require a workaround and is not the recommended approach.
The legacy functionality without a workaround would result in an employee being overpaid or underpaid.
It is likely that you do not want the calculations to perform as outlined below, and should turn the property Off in order to activate the current functionality.
See Dilution and Partial Periods - Leave Without Pay (LWOP) - Percentage of Period Pay for more details, including the section on Legacy Behavior in Migrated Systems.
Underpaid Example in Legacy Calculation (long period with more than 86.6667 hours)
Dilution functionality On = Set Dilution Business Hours in Period from Dilution Hours property is set to True (Admin > Properties).
- Timesheet period is 88 hours (11 days) total. (9/16/19 - 9/30/19)
- Timesheet has 3 days (24 hours) charged to project, 8 days (64 hours) to LWOP.
- Cost Rate is adjusted down to $56.75752 as opposed to $60.09611.
- With dilution property selected and Dilution calculated on People Profile,
- Per Project Time Details report, pay is 24 hours * $56.75752 = $1,362.18 (Underpaid)
- Pay for 24 hours * $60.09611 = $1,442.31 (what pay should be).
The formula from the Help still stands, but in this example case the Business Hours Factor is simply 1:
Dilution Hours - (Business Hours Factor * (Hours Charged to (Undiluted) & LWOP pay codes) )
Hours Charge to (Diluted) pay codes
Dilution Factor: (86.6667 - (1 *64))/24 = 0.9444458333333333
Effective Cost Rate: 0.9444458333333333 * 60.09611 = 56.75752068904167
Pay for the Period: 56.75752068904167 * 24 = $1,362.180496537
The amount of $1,362.18 is not the desired pay for the period (underpaid). This illustrates why you likely do not want to leave the Set Dilution Business Hours in Period from Dilution Hours property turned on (legacy behavior) unless you have already employed legacy workarounds to address.
Overpaid Example in Legacy Calculation (short period with less than 86.6667 hours)
- An annual salary of $124,999.92.
- A semi-monthly salary of $5,208.33.
- A derived hourly Cost Rate of $60.09611.
Dilution functionality Off = Set Dilution Business Hours in Period from Dilution Hours property is set to False (not selected) (Admin > Properties).
- Timesheet period is 80 hours (10 days) total. (12/1/19 - 12/15/19)
- Timesheet has 9 days (72 hours) are charged to project, 1 day (8 hours) to LWOP.
- With no dilution selected,
- Per Project Time Details Report, Cost Rate is $65.10414 as opposed to $60.09611.
- Pay is 72 hours * $65.10414 = $4,687.50. (Overpaid)
- Pay for 72 hours * $60.09611 (regular rate) = $4,326.92 (what pay should be).