New Employee Group CPP Calculations

New Employee Group CPP Calculations

GOAL: To provide a wholistic overview of the issues that can arise when creating a brand new Employee Group for the start of the SCHOOL YEAR, and how this can impact CPP calculations with a bit of additional setup. 

ISSUE: If a New Employee Group is set up for the beginning of the school year, and starting around the End of August or Start of September – what you might find is that CPP will calculate rather high on the first Pay Run. 

ROOT CAUSE: The source of the issue with an inflated CPP in this case is the exeYTDDays under the CPP section of the PayRunLog file. This is the exemption days in the CPP calculation which is a calculated variable in the Pay Engine and simply counts the days, however CPP works on a January to December scope. 

The result of this is no exemption days from January to End of August, and a value of 14 when it should be closer to 200. 

A lower exeYtdDays = Lower proportion of CPPAnnualExemption = Higher CPP Deduction

PayRunLog File

FIX: The Pay Period Start Date and EI Start Date, of the very first Pay Period for a new Employee Group starting in September, should be backdated to the natural Start Date of the first Pay Period with a CHEQUE DATE in JANUARY of the Pay Calendar for the employee group this new one was based off. 

Note: If the first pay period of the new group is not the first pay that is paid in January (usually starts end of December or Jan. 1), then for CPP purposes (CPP's YTD exemption calculation), you need to set the start date of the first pay period back to the first day of the first pay period that would have been paid in January.

Example: New group ‘EMP_GROUP’ is based off ‘TEMP’ Employee Group Calendar. 

select * from EC_PAY_PERIOD_CALENDAR

where EMP_GROUP_CODE = 'TEMP'

**202401 has first Cheque Date in JAN, Start Date = 2023-12-17**

IMPORTANT NOTE: All of the below can bey keyed into the FRONT END UI if done correctly the first time and ahead of time. If this is a realization after the fact, the value would need to be updated in back end. 

STEP 1: Make very first pay period backdated to the natural Start Date of the first Pay Period with a CHEQUE DATE in JANUARY of the Pay Calendar for the model employee group.

START DATE = the natural start date of first Pay Period with a Cheque Date in JANUARY 

END DATE = Remains the actual End Date of First Pay Period

UPDATE EC_PAY_PERIOD_CALENDAR

set PAY_PERIOD_START_DATE = '2023-12-17', UI_START_DATE = '2023-12-17'

where EMP_GROUP_CODE = 'EMP_GROUP'

and PAY_NUMBER = '202501'

**Run Successfully**

select PAY_PERIOD_START_DATE, UI_START_DATE, * from EC_PAY_PERIOD_CALENDAR

where EMP_GROUP_CODE = 'EMP_GROUP'

and PAY_NUMBER = '202501'

**Pay Period and EI Start Date successfully updated**

PAYROLL > GROUP DATA > PAY PERIOD CALENDAR > EMP_GROUP

**Verified the data change in front end UI**

STEP 2: Re-run Pay in Debug Mode to verify changes in CPP Calculations

PayRunLog File

**Earlier Calendar Start > Higher exeYtdDays > Higher proportion of CPPAnnual Exemption subtracted in CPP calculation > Lower CPP Deduction** 

IMPORTANT NOTE: In certain cases, such as the above, the CPP calculation can result in negative (which will print 0.00 on Pay Register) as the CPP is being “trued-up” due to the difference in earnings from one group to another. 

Additional Considerations:

1: Still start all new positions, salaries, benefits, pension records, etc. in this new Group effective the actual start date of the new positions in the new Group (ex. Sep. 1, 2024).

2: Employee Group Maintenance screen: the effective date of the Group also needs to be backdated to Dec. 24, 2023 to allow a pay period to start this early.

3: If the Group uses the same Group Exception Calendar as other groups, then assign a new Group Exception Calendar for the starting year. 

Copy the Group Exception Calendar that is being used, modify it and assign to the group before running Entitlements + Pay to level out the Number of Working days in the first pay period.