Backpay occurs when historical calculations are affected by changes to employee settings, pay policies, or profiles. It happens when previous data has been overridden with new data, such as positive and negative adjustments, often due to retroactive changes that prompt the system to recalculate historical payments.
The way you identify the cause of backpay is that within the backpay tab, I recommend filtering first on the date column, and you would filter from oldest to newest date, which will give you the dates that the change was made for that is causing the backpay.
In this case, it's for the period from ____ to ____
Once you have the period the backpay is for, you will filter the pay items column to only include all payment pay items to identify the issue.
Pay items such as: Ordinary time, Overtime, Public Holidays, etc
Once you have Filtered on pay items, you will navigate back to the date column and filter again from oldest to newest.
In this case, the oldest date is ____, so this will be the first line
Once you have done this, you will see a common change that occurs, it negates and enters a positive back in. This means something was overridden for a prior period, the date identified in step 1.
You then check and identify the difference between the negative and the positive. You will check the costing, Award sources, Award types, Pay policies, etc
In this case, the difference is that it's negating from ____ and applying a positive to ____
This investigation tells you that the employee has had a change for a prior period.
Note: Backpay only ever occurs when something has been updated and changed incorrectly it is rarely a system issue so, please ensure that you do all of the filtering that is advised above and when you get backpay next time and you need assistance please ensure you list all of the above and advise what you have noticed.
How to Correct Back Pay Issues
Correcting Allowance Changes:
Revert the existing Addition/Deduction record to its original values.
Cease-date (end-date) the original record instead of editing it directly.
Create a new Addition/Deduction record with the updated details and set the appropriate commencement date.
Adjusting Overtime Rates:
Navigate to the Pay Policies section in the Admin settings.
Search for and open the relevant pay policy.
Update the overtime rate to the intended value and ensure the effective date is accurate.
Save the changes and recalculate the affected pay runs as needed.
Reviewing Profile Updates:
Verify the effective date of any role or profile changes.
Ensure that changes are applied correctly to avoid unintended back pay or accrual adjustments.
Best Practices to Avoid Back Pay Errors
Always double-check the effective date when making changes to pay policies, allowances, or employee profiles.
Avoid editing existing records directly; instead, cease-date old records and create new ones with updated details.
Regularly review pay runs to identify and address discrepancies early.