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Title:  How can I process the recovery of a negative PTO balance when an employee terminates?

Brief description: 

When an employee terminates with a negative PTO balance (the employee was allowed to use more then they had accrued), you may have a need to withhold the amount from the employee's final paycheck.  

What’s covered in this document:


Option 1

Reflect the adjustment without affecting the timesheet hours:

  1. Manually key in the negative hours in the import to payroll to withhold the amount from the employee's final check.
  2. Add/adjust the hours in Accruals > Adjust via the Person's Profile.
  3. Post a Journal Entry to debit (reduce) Accrued Wages and credit accrued PTO.

Option 2

If you send hours to your payroll system and would like to reflect the adjustment within the timesheet, you can:

  1. Set up a Pay Code (Admin > Setup > Time > Pay Codes) with a negative Cost Rate Factor, with a Salaried Usage of Additional Pay (Undiluted). Note that the hours on the timesheet would still be positive, but the cost would be negative.

  2. Update the Pay Code Mapping (Admin > Export) to "Negate Values" so that they flow as negative on the export. This would likely also require some tweaks to the export logic.

  3. Set up a Recovery Project and associate the new "Recovery" Pay code with that project.  Map this Project to Post Labor to the PTO accrual account.

  4. Via an admin adjustment, add a line to the user's last timesheet with the number of hours that you are recovering from the final paycheck (this will look like additional hours worked on the timesheet).
  5. When you post Labor, the result of the transaction will be a debit to (reduce) Accrued Wages and credit to accrued PTO.
  6. Within the Person Profile > Accruals in the left menu, enter the end date of the accruals and then "Adjust" the balance you recovered from their accrual balance manually (add a note that you "recovered this in xx/xx timesheet").
  7. If exporting hours to a payroll provider, you can add logic to deduct the hours reported to recovery (check with your payroll provider on how they need to see these hours).

Note: If you want to know the amount of negative hours that exist prior to running the Time/Payroll export, you can run either a Schedule Details report or an Assignment export. 

Additional Information

Help Docs - Pay Code Mapping

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