ehp4_overpayment recovery_03312010 (2).pdf

SAP ERP Human Capital ManagementSalary Overpayment Recovery Solution

March 31, 2010

© SAP 2007 /

1. Solution Overview

2. Implementation Requirements

3. Business Scenario

4. Reporting / Utilities

5. Customizing

Agenda

© SAP 2007 /

Solution Overview

� Unable to collect back overtime and adjust taxable's at point of collection

� Claims are only generated when the salary overpayment exceeds the amount able to be recovered.

� Crossing tax year functionality is manual

� Clearing claims and recovery the claim is manual

Claims (generation of /561)

� A claim should never be generated because the system determines true salary overpayments and moves then to a salary overpayment table.

� Ability to collect back overtime and adjust taxable's at the point of collection

� Crossing tax year functionality is automated in the solution

� No need to clear claims and the recovery is based on business rules

Salary Overpayment

Claims vs. Salary Overpayment

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Solution Overview

Salary Overpayment Solution

�Customers will no longer need to create clearing wage types matching every possible taxability

to ensure accurate clearing of overpayments.

�Year end tax filing will no longer be complicated by claims situations.

�Solution is Concurrent Employment enabled.

� Configuration setting that turns on or off the automatic clearing of overpayments as well as

setting overpayment recovering threshold levels

�Ability to collect back over time and adjust taxable at the point of the collection is made.

�Ability to check minimum wage requirements before recovery of overpayment.

�Payroll Results Cluster table – Overpayment collection table which stores the details of the

overpayment and balance information.

�Payroll functions to calculate the overpayment and allow for the repayment of the debt based

on configuration

�Ability to override business rules through an overpayment recovery infotype. This infotype also

tracks Employee Consent , Employer Notification attempt, total forgiveness, partial forgiveness,

repayment amount.

© SAP 2007 /

Solution Overview

Payroll Process

With the activation of the US Overpayment Recovery Solution, there is an additional

processing step to create the master data relevant for the overpayments created in

payroll. There is a new transaction/utility updates the employee’s master data with

per pay period overpayments.

© SAP 2007 /

Solution Overview

Payroll Process

The Payroll Process with the activation of the US Overpayment Recovery Solution:

Release Payroll

Start Payroll

Corrections

Master Data Corrections Overpayment Utility (updates to infotype 0909)

Payroll Run Complete

(OK)?Yes

No

Check Completeness

Exit Payroll

Subsequent Activities

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Implementation Requirements

�ERP 6.0 Enhancement Package 4 SP02

�Prior to going live, all existing claims (/561) must be cleared in productive

environment.

� Once activated, it must not be deactivated.

� Configuration based on business requirements

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Business Scenario

Employee Scenario

� PP02/02 Employee paid $2083.33 in salary with wage type 1002

� After payroll has been exited the Payroll Audit process determines the employee should have been paid $1083.33 effective PP02.

� Before executing PP03, the employee’s master data is corrected causing a retroactive payroll run to PP02.

� Therefore, an overpayment of $1000.00 would be generated for PP02/03.

� Overpayment recovery solution has been activated and payroll will recover the overpayment according to the business rule framework.

© SAP 2007 /

Business Scenario (continued)

Business Rules

�Overpayment Recovery Solution Active (T77S0)

�Employer Operates in Colorado requiring an employee’s consent to recovery any salary overpayments

�Upon employee’s consent the employer may recover 10% of gross earnings or a greater amount authorized by the employee (override)

�Minimum wage check not invoked

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PP02/03 WT 1002 restated as paid since the money has not been recovered.

PP02/03 WT /584 is calculated with the gross overpayment for WT 1002.

PP03/03 WT /580 is generated in current period with the gross overpayment.

© SAP 2007 /


The Payroll CLM cluster table stores the relevant overpayment results for the employee.

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The Recovery Process….

� State requires employee consent therefore based on the configuration, payroll will not begin recovery until infotype 0909 has been updated with EE Consent.

The Overpayment Recovery utility is processed to update infotype 0909 with all employees in PP03 that generated an overpayment.

The employer has selected employee consent obtained and employer notification provided.

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The master data….US Overpayment Recovery Infotype (IT 0909)

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The business rule framework…..

� Auto-clearing at the state level is OFF

� State minimum wage check not active

� Recovery threshold set to 10% of /101

� Work tax area defined by the work tax area infotype ( IT0208)

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Recovery through payroll…

© SAP 2007 /

Reporting / Utility

US Overpayment Recovery Utility

� As part of the payroll process, the utility will be

executed to update all relevant overpayments

and necessary master data according to

business configuration.

US Overpayment Recovery Report

� Reporting tool to review the details of an

overpayment for an employee or for a group of

employees during a specific payroll period.

© SAP 2007 /

Customizing

Technical Wage Type to Support this process:

� /580 - Overpayment Balance

� /581 - Amount Recovered

� /582 - Prior year Overpayments

� /583 - Amount forgiven

� /584 - Total Amount Overpaid

� /585 - Previous Period Overpaid Balance

Additional Wage Type Configuration:

� Assign Overpayment Recovery Processing Class for earning wage types (PCL 77)

Processing class 77 should be configured for all earnings that may cause an overpayment. Within the payroll function USCLM, payroll will evaluate the configuration of PCL 77 for each wage type to determine whether it should be included in the overpayment calculation process.

� Check wage type permissibility for infotype 0909 (table V_T512Z)

Wage types which have a PCL 77 configured with a value of a ‘1’ should also be configured as a permissible wage type for the US Overpayment Recovery Infotype (IT 0909).

© SAP 2007 /

Customizing

The overpayment recovery solution must be activated at a system level.

� Activation of Overpayment Recovery (T77S0 – CCURE / NWCLM )

This setting activates the Overpayment Recovery Process in Payroll. It must be activated with the subsequent configuration in payroll.

Return Value: ‘X’ = Active and ‘ ‘ Inactive (blank)

Once activated, there are additional configuration settings to address customer specific business requirements through standard configuration.

� Activation of auto-clearing functionality (V_T511k – AUTCL)

At an organization level, this provides auto-clearing functionality.

When the AUTCL is activated payroll will begin to recover overpayments using the rule framework (threshold rules). To activate this functionality, a value of a ‘1.00’ should be entered with appropriate effective dates.

When the AUTCL is inactive, payroll will not recover overpayments without the Overpayment Recovery Master Data defining the employee consent and applicable master data.

� Activation of auto-forgiveness for terminated employees (V_T511k - FGVTR)

This setting will automatically forgive overpayments during a termination. To activate this functionality, a value of a ‘1.00’ should be entered with the appropriate effective dates. When this functionality is inactive, the system will not automatically forgive overpayments in a termination.

� Activation of prior year balances (V_T511k – REPYR)

This setting determines whether payroll should move prior year repayments as a post-tax deduction and recovery accordingly. To activate this functionality, a value of a ‘1.00’ should be entered with the appropriate effective dates. If this is not active, then the recovery process will continue adjusting taxable's as the recovery is made from the employee’s pay. This setting should not be turned off once it is turned on. It can result in inconsistent payroll results.

© SAP 2007 /

Customizing

Business Rule Framework

� Minimum wage check

This table stores the value for the state minimum wages. This will be evaluated when it is required to check that the employee will earn at least minimum wage after recovery of an overpayment in a pay period.

� Wage type priority

This setting defines the priority of a wage type in the recovery process.

� Define threshold rules & forgiveness

This setting defines a rule, the effective dates and whether the rule allows for automatic forgiveness of an overpayment in a retroactive termination.

� Define conditions for Rules

This setting links the threshold rule to a condition for rule. This specifically defines the criteria, amount/percent, wage type and operation of the rule. In condition for rules, you should not enter net wage types for calculation of recovery

� Define Rule criteria, search help and priority

This setting defines the criteria to be used in the recovery and a priority when multiple criteria's are defined.

� Assign Threshold Rules to Criteria

This setting links the criteria key to the threshold rule, defines whether minimum wage check is required at the state level and whether employee consent is required.

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Customizing

Overpayment Recovery in Off-Cycle Processing (Transaction SM30 / Table: HRCCE_V_OCR)

� Defines which off cycle reasons are valid for overpayment recovery

Schema Settings (payroll function: USCLM)

� Activate in sub-schema (or copy of sub-schema) UAL0

� Location: Immediately after X023

� Parameters within Non-CE payroll:

Parameter 1 = CUST

Calls form routine with the name

OVERPAID_DEDUCTION_PROCESSING.

Create the form routine in RPCALCU0 within

customer include for any custom processing

for recovery or overpayments.

© SAP 2007 /

Customizing

Schema Settings (payroll function: USCLM) for Manual Checks

� Activate in sub-schema (or copy of sub-schema) UMC0

� Location: Immediately after X024

� Parameters within Non-CE payroll:

Parameter 1 = CUST

Calls form routine with the name OVERPAID_DEDUCTION_PROCESSING.

Create the form routine in RPCALCU0 within customer include for any custom processing

for recovery or overpayments.

© SAP 2007 /

Customizing

Enhancement Spots:

� HRCCE_GET_CRITERIA_RULES - Customer defined threshold calculations

� HRCCE_WORKTAX_AREA - Customer defined work tax area

User-Exits:

� PCBURZUS0 / Form: OVERPAID_DEDUCTION_PROCESSING

Provided to allow for customizing in pre-tax deduction overpayment scenarios

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Concurrent Employment Specific

CE Configuration:� Activation for recovery from all assignments (V_T511k - RECAL)

� T511k RECAL = 1.00 (ON)

Then when rule framework is invoked it will take all earnings within the same tax company for active assignments based on the percentage and wage type defined in configuration.

For example: Overpayment balance of 3000.00

Assignment 1 earns M003 = 1000.00


Total gross earnings towards /101 = 3000.00

Rule frameworks state recover 10 percent of /101.Then recovery will be 300 dollar.

The recovery will be distributed based on the gross earnings.

� T511k RECAL = 0 or blank (OFF)

Then when rule framework is invoked it will take earnings within same tax company for the assignment where the overpayment has been created, based on the threshold configuration.

For example: Overpayment balance of 3000.00 created on Assignment 1



Total gross earnings towards /101 = 3000.00

Rule frameworks state recover 10 percent of /101.

Then recovery will be 100 dollars based on /101 of assignment 1.

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Schema Settings (payroll function: USCLM)

� Activate in schema (or copy of sub-schema) U00C

� Location: Immediately after UAL0

� Parameters within CE payroll:

Par1 Function

CUST Calls form routine with the name OVERPAID_DEDUCTION_PROCESSING

Create the form routine in RPCALCU0_CE within customer include for any custom processing for recovery or overpayments.

COLL Process Overpayments (called for each personnel assignment)

RECO Process Recovery from the Person

CUML Move Wage Type /580 from RT to RT_PERSON and cumulate.

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Schema Settings (payroll function: USCLM) for Manual Checks

� Activate in schema (or copy of sub-schema) UM0C

� Location (s):

� First call: Immediately after X023 within subschema UM0C

� Second call: Immediately prior to UTAC within subschema UM0C

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CE Configuration:

� Grouping Reason / Rule XXNT

� In a CE Scenario, the functionality has been developed where the overpayments of the personnel assignments are grouped together in accordance with the tax company. The grouping of the tax company is done through grouping reason XXNT.

� Override infotype – Exempt from Personnel Assignment (infotype 0941)

� This infotype will only be relevant when RECAL is active in T511k. This infotype then allows for the complete exemption of an assignment from the overpayment recovery process. The current limitation within this design is it isn’t overpayment specific therefore the exemption for the assignment is all or nothing.

� Infotype 941 allows exemption from recovery for an assignment who does not have an overpayment. If the personnel assignment has an overpayment, recovery will occur from this assignment irrespective of the exempt flag set in Infotype 941 for this assignment.

© SAP 2007 /

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ehp4_overpayment recovery_03312010 (2).pdf

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