What is the Retro Rate Feature?
The Retro Rate Adjustments feature in Empeon Workforce automatically recalculates past earnings when an employee’s base rate is updated after one or more payrolls have already been processed. When activated, the system reviews all applicable historical payrolls, determines the difference between what was paid and what should have been paid at the new rate, and adds the retroactive adjustment to the employee’s next paycheck. This feature helps streamline retroactive payments without the need to make manual pay adjustments or process additional payrolls.
Additional Considerations regarding this feature:
- Currently, this feature only works for hourly employees who are not set up as auto-paid.
- This feature only works when making a date-driven "change" to a rate and not when "editing" the rate.
- Only Workforce Users with access to Payroll will have access to "Calculate Retro".
How Retro Rate Adjustments work
When updating an individual employee’s rate, if the effective date of the new rate is earlier than the employee’s most recent processed paycheck, a Calculate Retro Rate button will appear on the new rate entry.
Clicking this button prompts the system to generate a retroactive adjustment check that reflects the difference between the old and new rates. The check will display both negative and positive amounts as needed to reconcile prior pay, and it will be placed in a separate payroll batch labeled "RetroRate".
Retro Rate Adjustments can also be processed in bulk when multiple employee rates are changed at once. This is especially useful when rate changes are imported for several employees. Rather than calculating adjustments individually, the system allows all applicable retro adjustments to be processed at once.
To do this, navigate to the Payroll section within the Actions tab and if the system detects any employees with rate changes requiring retro calculations, a Calculate Retro Rate button will appear. Clicking this button will generate retro rate checks for all employees identified.
All that is needed from here is to process the "RetroRate" batch along with all other scheduled batches.
Retro Rate Settings
When this feature is activated, settings for Retro Rate adjustments can be found in the Payroll section of the Company tab, within the Earnings & Rates Card.
Activation of this feature is typically in conjunction with Empeon and includes two components: activating the feature itself and assigning a Code Group.
The assigned Code Group defines which earnings should be applied toward retroactive pay calculations. Typically, the Code Group includes all earnings that apply toward the employee’s base rate by default and excludes any earnings with predefined rates, such as shift differentials or on-call hours.
Once the feature is active, and the appropriate Code Group is assigned, the only ongoing maintenance typically required is ensuring the Code Group remains up to date. If new Earnings Codes are added to the system and should be included in retro rate calculations, they should be added to the assigned Code Group accordingly.
For any questions relating to activating or maintaining these settings, please contact Empeon Customer Support.