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Administrator Guide
Last Updated: 2023-06-23
Set Arrears Limits

Set Arrears Limits

  • Define a priority for the deduction and select
    Recoup Arrears
     on the
    Maintain Deduction Priorities
     task.
  • Security:
    Set Up: Payroll (Calculations - Payroll Specific)
     domain in Core Payroll functional area.
You can set limits on the amount of an arrears balance to recover in a payroll run. You can define:
  • Default limits that apply to all workers.
  • Limit overrides based on the pay group, run category, or other criteria.
During off-cycle processing, Workday recoups arrears from on-demand replacement payments, but not from on-demand additional payments or manual payments.
  1. Access the
    Net Pay Validation and Arrears Rules (filter by priority)
     report.
  2. Select the
    Has Priority
     check box.
  3. From the related actions menu of a deduction, select
    Deduction
    Edit Net Pay Validation/Arrears
    .
  4. Review or modify the arrears settings.
    Workday populates settings from the
    Maintain Deduction Priorities
     task.
    As you complete the task, consider:
  5. In the
    Default Recoup Arrears Limit
     section, set default limits on the amount of arrears to recover for a payroll period.
    Net pay limits take precedence over arrears limits. Workday reduces the amount of arrears recovered when it results in an employee's net pay falling below the minimum net pay. Example: Sam's net pay is 100, with a minimum net pay of zero. He is in arrears of 150 for a deduction with an unlimited arrears deduction. Workday recovers only 100 of the arrears balance. Recovering the full amount would result in a negative net pay.
    As you complete the section, consider:
    Option Description
    Unlimited for Current Deduction
    Select to recoup the total arrears amount in the current period.
    Example: Jane has a current deduction of 100 and total arrears of 400. Workday attempts to recover the 400 in addition to the 100.
    Percent of Current Deduction
    Select to limit the amount of arrears recouped based on an amount equal to a percentage of the current deduction. When a worker has arrears amounts from payroll results from different run categories, Workday calculates the limit based on the amount from the current pay result. Example: Workday won't recoup a percentage of arrears from other run category results.
    Example: Allison has a current deduction of 100 and total arrears of 200. When you enter 50, Workday attempts to recover an amount of arrears equal to 50% of the current deduction (50). Workday processes the current deduction of 100 in full.
    Flat Amount for Current Deduction
    Select to recover a specified flat amount. When a worker has arrears from payroll results from different run categories, Workday only recovers the specified flat amount when the deduction is included in the current payroll results.
    Example: Peter has a current deduction of 100 and total arrears of 100. When the flat amount is 25, Workday deducts 25 of the arrears balance in addition to the 100.
    None of the Above
    Select to use an override to arrears.
    When you select this option, Workday recommends that you also enter a value in the
    Flat Amount Limit (When No Current Deduction)
     field to ensure arrears recouping.
    Flat Amount Limit (When No Current Deduction)
    Enter a flat limit amount on the arrears recovery when Workday can't process the deduction for a period. Example: Dean loses eligibility for medical coverage after changing pay groups. As a result, he receives no medical deduction in the current period. When the arrears amount is 100 and the
    Flat Amount Limit
     is 50, Workday deducts 50 in the current period to cover arrears.
    When Workday doesn't process the deduction in the payroll run, Workday applies both this limit and any scheduling criteria you define for the deduction. Example: You schedule the deduction to apply in the first weekly pay period of each month. Workday recoups arrears for the deduction only in that pay period. To override the scheduling, define custom arrears rules instead of using the default limit.
    By default, Workday recoups arrears in the next pay period when workers have both:
    • Midperiod events resulting in gross-to-net subperiods.
    • No earnings in the first subperiod.
    To recoup arrears in subsequent subperiods where workers have earnings rather than wait for their next pay period, enter a very high flat amount in this field. Example: Jane goes on leave without pay and returns in the same pay period. To recoup arrears on the subperiod where she's active and has earnings, you can enter 9999 in this field.
    Except for specific scenarios where you don't want to recoup any arrears, Workday recommends that you always enter a value in this field. Example: You don't want to recoup arrears for another run category.
  6. In the
    Default Recoup Arrears Limit
     grid, define overrides for default limits based on a worker's pay group, run category, or other criteria.
    Workday ignores any worker eligibility and scheduling criteria defined for the deduction when applying the override rules.
    Example: You have a deduction configured to resolve only on the first and second pay periods of a monthly payroll. Define criteria in the grid to recoup arrears from other pay periods.
    As you complete the grid, consider:
    Option Description
    Evaluation Order
    When you have multiple sets of limits, Workday evaluates a deduction against each row starting from the first. Workday uses the limits associated with the first row that returns a match. When it can't find a match, Workday applies the default limit.
    Recoup Arrears Criteria
    Specifies the criteria workers must meet to be subject to the override limits, such as run category or pay group.
    Example: You can recoup 50% in regular runs and 100% in bonus runs.
Workday applies the override limits to workers who meet the criteria in the grid. It applies the default limits to all other workers with an arrears balance.
You want to prevent Workday from recouping arrears for employees hired before 2015. For all other employees, you want to set a recouping limit of 100.
In the
Default Recoup Arrears Limit
 section, select
Flat Amount for Current Deduction
, and enter
100
. Then add a row with these settings:
Option
Settings
Recoup Arrears Criteria
Select
Create
 from the
Additional Criteria
 field. Define a value comparison calculation that returns true for employees hired after January 1, 2015.
Recoup Arrears Limit
Select
None of the Above
.