In Release 12.2 there are some key enhancements done in the Projects costing module in Labor Costing.

  1. Total Time Costing
  2. Costing Using HR Rates
  3. Costing Using Payroll Actuals

 

Total Time Costing:

This enhancement is useful for exempt employee costing. Exempt employees are not paid extra for the extra hours worked. But they might enter the total hours worked in OTL or any other time tracking system. The hourly rate for them is setup in the cost rate schedules or in custom forms. But the rate * number of hours entered is not what the employee is paid for.

If Total time costing is enabled, then costing calculates the effective labor rate using the formula below:

Effective Labor rate = (Base Hours / charged hours ) * Rate

For example, if the weekly base hours is 40 and the employee entered 60 hours and the hourly rate is $150. Then the effective labor rate is = (40/60)* 150 = 100 /hr.

And the total cost = 100 * 60 = $6000

Costing Using HR Rates:

This enhancement enables costing using the labor rates entered in HRMS. I think this is the best because the actual rates are maintained in the HR and that is what paid to the employees.

A new timecard layout has been introduced in OTL to have “Job”, “Location” and “Work Type” attributes. These attributes along with the rates are entered in the HR Rates matrix. This will comply with the Labor department rules to pay the minimum wage for employees in certain locations.

 

Costing Using Payroll actuals:

This is another good enhancement for companies wanting to use the payroll cost. Project costing allocates the payroll cost using a new mapping rule which maps the pay element in payroll to the expenditure type in costing and the Distribution method.

We will dig more into this in the next article.

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