How to Change Shift Premium Amounts in Workday

Workday, a leading Human Capital Management (HCM) system, offers robust tools for managing employee compensation, including shift premiums. If you need to update shift premium amounts, such as changing the hourly rate from $1.50 to $2.00, it’s a straightforward process—but one that requires careful attention to ensure accurate payroll processing and compliance.

In this article, we’ll walk you through the process of updating shift premium amounts in Workday. Whether you’re an HR manager or payroll administrator, these steps will help you make the changes smoothly.

Understanding Shift Premiums in Workday

Shift premiums are additional earnings provided to employees working specific shifts, such as night or weekend hours. These are configured within Time Calculation Groups and tied to Earning Codes in Workday. To update a shift premium amount, you need to adjust the earnings calculation within the system.

Steps to Change Shift Premium Amounts in Workday

1. Navigate to the Earning Code Configuration
   • In Workday, go to the Earnings section.
   • Locate the earning tied to the shift premium you want to adjust.
2. Review the Current Configuration
   • Examine the existing calculation settings. Confirm the earning code and the linked time calculation rules.
   • Ensure the time calculation group and rules are already set up and correctly linked to the earning code.
3. Create a New Calculation Value (If Required)
   • If the new premium amount is not an existing value (e.g., moving from $1.50/hour to $2.00/hour), you’ll need to create it.
     • Add the new value in the Calculation Values section of the earnings configuration.
     • Assign a unique identifier for the new amount to distinguish it from previous values.
4. Update the Calculation Rule
   • Edit the calculation rule for the earning to incorporate the new premium amount.
   • Set an effective date for the change to ensure retroactive payments are not processed unless desired.Pro Tip: Effective dating allows you to apply the new rate from a specific date, ensuring previous payrolls remain unaffected.
5. Validate the Configuration
   • Review the updated earning and calculation rule to confirm accuracy.
   • Verify that the new rate is correctly applied to the relevant time calculation group.
6. Test the Changes
   • Before finalizing, run a test payroll for an employee eligible for the shift premium.
   • Confirm that the correct premium rate is applied to their hours worked.
7. Deploy the Changes
   • Once validated, save the changes and notify relevant teams (e.g., payroll, HR) of the update.
   • Monitor the first few payroll cycles to ensure the new shift premium amount is applied correctly.

Key Considerations When Updating Shift Premiums

• Effective Dates Are Critical: Setting an appropriate effective date prevents retroactive adjustments that could disrupt payroll accuracy.
• Audit and Approval: Always review changes with your payroll or HR team to ensure compliance with organizational policies and labor laws.
• Documentation: Maintain records of the updated configuration, including the previous and new shift premium amounts, for future reference.

FAQs About Changing Shift Premiums in Workday

1. Do I need to create a new earning code for every shift premium change?
No, you only need to create a new calculation value if the new premium amount doesn’t already exist.

2. Will the change apply retroactively?
Changes will only apply retroactively if you don’t set an effective date. Always configure an effective date to avoid unintended backdated adjustments.

3. How can I verify if the update is successful?
Run a test payroll or check the calculated time entries for employees eligible for the shift premium. Ensure the new rate is applied correctly.

4. Can I update multiple shift premiums at once?
Yes, Workday allows bulk updates, but you’ll need to adjust each earning code and calculation rule individually.

Conclusion

Updating shift premium amounts in Workday is a straightforward process when done carefully. By following the steps outlined above, you can ensure accurate payroll adjustments without disrupting operations. Whether you’re increasing premium rates to reward employees or making adjustments for compliance, Workday provides the flexibility to implement these changes effectively.

If you’re managing shift premiums regularly, consider documenting your organization’s specific steps and configurations to streamline future updates. For more Workday tips and best practices, stay tuned to our blog!