12.0 - Termination Processing Procedures for Staff Employees

Subject: Termination Processing Procedures for Staff Employees

Source: Financial Management Services

Original Date of Issue: April 2012

Date of Last Revision: December 2020

Rationale: How to process staff leave plan and benefit payouts at time of termination, retirement, or transfer to a different paygroup.


Procedure

Monthly (S10, S12) and biweekly (BW1, BWP) appointed staff enrolled in leave plans are entitled to receive payout of benefit accrual hours at time of termination, retirement or transferring to another paygroup, subject to policy restrictions. When processing payout of benefit accrual hours, keep the following points in mind:

  • Biweekly staff (BW1) must have at least 6 months of service to receive termination payout for vacation hours. Contact IUHR for service date assistance.
  • All terminal payout for accruals should be processed with the last regular on-cycle payroll.
  • If terminal payout is not included in last regular on-cycle payment, it should be processed in the next available off-cycle payroll. There is no off-cycle fee for terminal pay.
  • Monthly (S10, S12) and biweekly (BW1, BWP) employees who transfer to Academic positions are entitled to payout of accrued benefit hours. If possible, include the terminal payment with the last monthly/biweekly payment. Contact University Human Resources or University Payroll for assistance.


Step 1: The department determines the employee's last day of work and initiates the termination eDoc

Refer to the Voluntary and Involuntary Separation policy and/or contact IUHR (askhr@iu.edu) if you need assistance determining the last day of work, retiree status, and termination action reason codes. In general the termination effective date is the first calendar day not working or using time off benefits, except in special circumstances. Example: Staff whose last day working is on a Friday, use Saturday for the eDoc term date.

Note that when the termination eDoc reaches final approval, the employee will be removed from the payroll voucher. The payroll system will create a Final Check (FC Batch) payline. UCO Payroll will use the FC payline to process the final payment including terminal pay.


Step 2: IUHR prepares the Adjustment Voucher for termination payout

Use the electronic Adjustment Voucher for entry. Keep the following points in mind:

  • Be sure to indicate the correct job record number.
  • Include all regular pay.
    • For BW1/BWP this includes time in pay status and time off used for the last pay period
    • For S10/S12 this ONLY includes time in pay status and any ABE or IJM time listed on ePTO. All other time off benefits used is only recorded in ePTO but not on the AV.
  • Include active additional pays. Indicate correct sequence number and be sure to prorate, if appropriate.
  • Include all terminal payout using the appropriate earn code.
  • Indicate the exact funding account split(s) for each earn code. Include the percentage split for each account used in the “Org Ref ID” field for reference.
  • If funding differs from the job record, by special request of the department, note that in the comment section of the AV. Example: “Different funding for term pay”


Biweekly (BW1) Staff Adjustment Voucher

  • Review timesheet for accuracy to determine hours worked and any time off hours used during the last pay period of employment. Work with the department if the timesheet is missing hours.
    • The Approver and Payroll Processor should approve the timesheet to Final. These hours and approvals will be there for record keeping as the timesheet will be used as a reference to create the final AV but technically the timesheet extract will be overridden by the final adjustment voucher entry.
  • Review Leave balances via IUIE or Timekeeping to determine payout based on years of service and policy.
  • Calculate prorated vacation accrual for the last pay period to include in termination payout.
    • Refer to the Vacation/PTO Accrual Chart published on the UCO Payroll website or refer to IUHR policy links below to determine the accrual rate and maximum vacation pay outs.
    • Divide the accrual rate by 80 to determine the hourly accrual rate (also listed on the Vacation/PTO Accrual Chart). Then multiply the hourly accrual rate by the total hours in pay status in the final pay period. Example: 4.31/80 x 56 = 3.017 = 3.02 prorated vacation accrual.
  • Prepare the AV for the final pay period, additional pay, and all terminal payout.
    • Separate work/benefit hours by FLSA pay period end date (week 1/week 2).
    • RGN hours must equal total hours in pay status for the week even if the employee used time off codes.
      • For example, an employee’s last day of work is on Friday, the adjustment voucher must reflect 40 hours RGN during the last week. If they took two sick days in the final week, the adjustment voucher would also reflect SCK = 16. The employee will receive pay for 16 hours SCK and 24 hours RGN.
    • Indicate time off hours by earn code (SCK, VAC, etc.) in the appropriate week(s).
    • Include any additional pay earn codes (FYS, Temp Pay, etc.) in appropriate week(s) by sequence number. Calculate a prorated amount for partial.
    • Combine Accrued Vacation hours balance with the calculated vacation accrual for last pay period to determine termination vacation payout per policy restrictions.
    • Include payout hours in final pay period end date using the terminal earn codes.
      • BW1: TVC – Terminal Vacation-Biweekly (max 872)
      • BW1: THL –Terminal Holiday-Biweekly
      • BW1: CMP – Comp Hours Payout
    • If the employee qualifies for the sick pay out (retirement), calculate and include any Sick hours using the terminal earn code.
      • BW1: TSK – Terminal Sick – Biweekly


Biweekly Professional (BWP) Staff Adjustment Voucher

  • Review timesheet for accuracy to determine hours worked and any time off hours used during the last pay period of employment. Work with the department if the timesheet is missing hours.
    • The Approver and Payroll Processor should approve the timesheet to Final. These hours and approvals will be there for record keeping as the timesheet will be used as a reference to create the final AV but technically the timesheet extract will be overridden by the final adjustment voucher entry.
  • Review Leave balances via IUIE or Timekeeping to determine payout based on years of service and policy.
  • Calculate prorated PTO accrual for last pay period to include in termination payout.
    • Refer to the Vacation and PTO Accrual Chart published on the UCO Payroll website or refer to IUHR policy links below to determine the accrual rate.
    • Divide the accrual rate by 80 to determine the hourly accrual rate (also listed on the Vacation/PTO Accrual Chart). Then multiply the hourly accrual rate by the total hours in pay status in the final pay period. Example: Example: 9.24/80 x 56 = 6.468 = 6.47 prorated PTO accrual
  • Prepare AV for final pay period, additional pay, and all terminal payout.
    • Separate work/benefit hours by FLSA pay period end date (week 1/week 2).
    • RBP hours must equal total hours in pay status for the week even if the employee used time off codes.
      • Example: Employee’s last day of work was on Friday so they were in pay status 40 hours in the last week of work. They took 2 days off during the week. RBP hours = 40.00, PTO = 16.00 (the 16 PTO hours will subtract from the 40 RBP hours and the employee will receive 16 hrs PTO, 24 hrs RBP).
    • Indicate time off hours by earn code (SCK, PTO, etc.) in appropriate week(s).
    • Include any additional pay earn codes (AOV, Temp Pay, etc.) in appropriate week(s) by sequence number. Calculate a prorated amount for partial weeks.
    • Combine Accrued PTO hours balance with the calculated PTO accrual for last pay period to determine termination PTO payout per policy restrictions.
    • Include all payout hours in final pay period end date using the terminal earn codes.
      • BWP: TMP – Terminal PTO
      • BWP: TMO – Terminal Holiday
      • BWP: CMP – Comp Hours Payout
      • BWP: TMH – Terminal Honorary Vacation
    • If the employee qualifies for the sick pay out (retirement), calculate and include any Sick hours using the terminal earn code.
      • BWP: TMS – Terminal Sick Monthly (S10, S12) Staff Adjustment Voucher


Monthly (S10,S12) Staff Adjustment Voucher

  • Review the Termination eDoc and ePTO for accuracy to determine that ePTO is up to date. Work with the department if the ePTO appears incomplete.
    • Prior to submitting the Termination eDoc, the ePTO Administrator should work with the employee to make sure that the employee’s ePTO is up to date. This means prior months have been approved and all time off in the current terminating month has been recorded in ePTO. Once ePTO is verified a statement, the termination eDoc can be routed with a eDoc note stating that the ePTO calendar is up to date.
  • ePTO will automatically calculate and add the PTO accrual for the current terminating month to the final balance once the Termination eDoc has been finalized. The final balances found on the ePTO Time Off Detail tab is used to for termination payout.
  • Review leave balances in ePTO to determine payout based on years of service and policy.
  • Prepare the AV for the final pay period, additional pay and all terminal payout:
    • Monthly REG pay prorated by workdays in the month (this would include all days in active status in the month they terminated. The REG pay amount would include any accruals used, absent hours and/or holidays in the month they terminated.).
      • Calculate a prorated monthly pay for mid month terminations =Monthly rate / number of total available work hours in the term month = per hour rate x hours in pay status = prorated total monthly rate Example based on a 11/26/20 term date: =$4,335 / 168 hrs= per hour rate x 144 hours = $3715.714 prorated monthly rate
      • If ABE is listed in ePTO in the final month, this must be listed on the AV to subtract from the REG pay.
    • Additional Pay earn codes and/or amounts (ALW, Temp Pay) by sequence number prorated by workdays in the month.
    • Any termination payout due based by hours in accordance with policy restrictions.
      • TMP – Terminal PTO hours
      • TMO – Terminal Holiday hours
      • TMH – Terminal Honorary Vacation
      • TMV – Terminal Vacation (PB Plan only)
      • TMB – Terminal Bonus (PB Plan only)
    • If the employee qualifies for the sick pay out (retirement), calculate and include any Sick hours using the terminal earn code.
      • TMS – Terminal Sick hours How to figure Sick payout for those that meet the sick payout eligibility. If accrued Sick hours are 152 or less, the Sick hours do not pay out. If accrued Sick hours are more than 152, but less than 312: (Accrual hrs – 152) x 25% = Balance To Be Paid Example: 300 – 152 = 149 x 25% = 37.25 hrs If accrued Sick hours exceed 312: ((Accrual hrs – 312) x 50%) + 40 = Balance To Be Paid Example: 900 – 312 = 588 x 50% = 294 + 40 = 334 hrs

CROSS REFERENCE

Voluntary and Involuntary Separation: HR-10-40

Quick guide to Terminal Payout eligibility: Separation Pay for Unused Time Off Accruals

Income Protection Time (Sick Time): HR-05-40

Vacation for BW1: HR-05-120

Paid Time Off (PTO) for PAE/PAO/PAU: HR-05-70

Paid Time Off (PTO) for PB: HR-05-80


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