Datatech’s support department has received many calls over the last couple days regarding the Rest & Recovery Rates for the pay period of 12/30/19 – 01/05/2020. The issue is that R&R calculations are pay period based, while Minimum Pay Rates apply by work date. This is causing some customers to see the R&R rates below the minimum wage of $13 (California) for work dates in 2020. This article will discuss two options you can consider using to bring the 2020 R&R rates up to the $13 minimum wage.
The following is an example of a piecework employee, where based on the piecework entries, the regular rate of pay or the work week is 12.92. Note the warning message customers receive that the break rate is below the minimum wage of $13.00:
Option 1
1.Use the Rest & Recovery Pay Rate Report to calculate the rates for the years separately.
2.After creating your breaks, from the Breaks menu, select the Rest & Recovery Rate Report.
3.Run the report first for Starting & Ending Dates 12/30/2019 – 12/31/2019 (Note: If your pay period is Monday – Sunday, change your dates respectively)
4.Select Daily Basis for the Minimum Wage Basis and Regular Rate of Pay for the Rate of Calculation method (CA users).
5.Select Update Hourly Rates on Rest & Recovery Time.
6.Repeat for the remaining Pay Period of 01/01/2020 – 01/05/2020.
The result is that the regular rate of pay for each year will be calculated & updated to the lines separately. The employee will see different rates for the breaks. If an employee doesn’t earn the minimum rate for 2020, the program will update the R&R rate at minimum wage.
The following is the result of the same employee example above, but with the Rest & Recovery Rates applied by year:
NOTE: If you use this method, when using the Daily Payroll Batch Report to Create Checks, you MUST un-check the Calculate Rest & Recovery Rates, so the software does’t re-calculate them using the default method.
In addition, depending on the employees’ production in the respective years, this method could cause a lower overall gross pay than the calculation using the Regular Rate of Pay. Notice in the first calculation the employees’ gross was 361.84 and in this method it is 361.66. If there was higher production on the 2020 work days, then this method could produce a higher gross calculation.
Therefore, you may consider option 2 for adjusting only the 2020 R&R rates…
Option 2
Calculate the break rates using the Regular Rate of Pay and update 2020 Rest & Recovery entries below minimum wage to $13.00. At this time, this is a manual process. Using the same Rest & Recovery Pay Rate report, reviewed above, you would calculate the break rates for the entire pay period.
Then, modify any R&R rates below minimum wage to 13.00.
To aid in filtering the Daily Payroll window to easily view and edit only R&R entries, click in the Wage Code field of an R&R entry. Then press [Ctrl+=]. This will apply a filter to the view, now displaying only R&R entries.
Only rates below $13.00 would need to be edited.
Once you have finished your modifications, press [Ctrl+=] again to un apply the filter.
The following is the result of the employees gross wage calculations using this method:
Notice the final gross after adjusting the 2020 rates is 361.92, the highest of the examples.
Note: As mentioned, the rates are being calculated before the Create Check process. So when you get to that point, un-check the Calculate Rest & Recovery Rates before clicking Preview or Print.
Washington Employers
While these examples are using California figures, the same issues and options apply to Washington. The 2020 Minimum Wage for Washington is 13.50, so the same adjustments would be made, using that rate. Also, in the Rest & Recovery Pay Rate Report you will select Average Piecework Rate instead of the Regular Rate of Pay.
As always, Datatech recommends you also seek professional legal counsel if you have any questions regarding the legal application of these calculations.
Due to the large volume of support calls we are receiving, we are unable to walk customers through these processes individually. If you have any issues or questions relating to completing software functions, please email the support department: support@datatechag.com.