If your enterprise assigns employees to different jobs, roles, or tasks according to a variable schedule, you can now calculate their pay from different rates for each role they perform in a time period. You can vary pay by other criteria too, such as location or length of service. You create a rate matrix to define rates against diverse criteria. For example, you could define base salary, overtime, and night duty allowance against combinations of job, location, and age. A person is eligible for a rate if their HR record, or overriding information they supply on their timecard, matches the rate's eligibility criteria.
You can use the supplied rate retrieval API to obtain the appropriate rates for a person or set of criteria. If you use Oracle Payroll, your payroll formulas can call a supplied function to retrieve the appropriate rate for each employee.
For each rate you can define up to seven eligibility criteria, including your own criteria or standard, predefined criteria such as length of service, position, and bargaining unit. For example, the criteria might be assignment to a specified organization or position hierarchy, or to a range of grades. You can define a criteria with two sub-criteria, if necessary, such as grades and locations.
When you define the criteria, you specify how the rate retrieval API should identify the criteria values for a person. There are three choices:
Specify a table and column that stores the personal or assignment information
Specify a formula rule that returns the criteria value
Specify one of the above and enable overrides from timecards
For each rate, you create a criteria rate definition such as base rate, hazard allowance, or pension. The criteria rate definition specifies the rate calculation method; you can:
Enter the rates on the rate matrix
Calculate a rate based on another rate (such as a percentage of the base rate)
Specify a formula rule to calculate the rate
If you define your eligibility criteria in such a way that an employee may be eligible for more than one rate value, you must specify the preferred rate, which can be the lowest, highest, average, or the rate returned by a formula rule.
You specify which elements derive their values from this rate definition. For example, if you are defining a salary rate, you might select a Regular Salary element, which is for people who have a criteria-based salary each month, and an Exception Salary element for people who have a criteria-based salary on an exceptional basis.
Note: The rate retrieval API does not update the element with the criteria-based rates. If you want the element entries to show the rates for reporting, you must update them manually. Oracle Payroll users can report on values in the element run results.
After you define the criteria and the rate definitions, you select them to build your rate matrix, which includes both eligibility criteria and rate columns from the rate definition. You select up to seven criteria and sequence them. For example, if you select Job then Location, the rate retrieval API checks a person's job first, then their location to find the appropriate rate. The following table shows an example of a rate matrix.
| Criteria 1: Union | Criteria 2: Job | Criteria 3: Grade | Base Rate: Default | Base Rate: Minimum | Overtime Rate (% of base rate) |
|---|---|---|---|---|---|
| Allied Shipbuilders | Welder | 1.A | 23.5 | 22 | 150 |
| Allied Shipbuilders | Welder | 1.B | 25 | 23.5 | 150 |
| Allied Shipbuilders | Equipment operator | 1.A | 21 | 20 | 150 |
| Allied Shipbuilders | Equipment operator | 1.B | 22 | 20 | 150 |
You can define rates for a single criteria value (such as organization = Sales East), or a range of values (such as age 18 to 21), or a group of values (such as grade = Senior or Principal).
To use criteria-based rates in Oracle Payroll, you include the Rate by Criteria function in the payroll formula for the element that you want to calculate from the matrix. This function calls the rate retrieval API to retrieve the appropriate rate for the person, based on their personal and assignment details or overriding information on their timecard.
For the setup steps to create a rate matrix and use it in Oracle Payroll, see: Setting Up a Rate Matrix