Business Requirement

Terminated employees can have payments (Payroll run) in the future. While such a payroll is executed after the termination date, a payment that was applicable prior to his/her termination should not get picked. In the current system, one must manually remove all the regular payments to not be applicable after termination.

Technical Requirement

Delimit all the pay components except severance pay when an employee is terminated.

Configuration

• The below Business Rule “Termination_Pay component” was created. This rule creates a new record as of the “Termination” event date and deletes all non-Severance pay components in it.

Screenshot of the Rule

This rule is attached as an onsave rule in employment details in manage business configuration. Essentially, the rule gets triggered while an employee action is carried out.

Screenshot of Manage business configuration

When an event Termination is chosen, the rule will delimit all the pay components in the compensation portlet except the severance pay for that event date.

Important NOTE:

If the employee has comp records with an effective date after the termination date, this solution will not work. In such cases, the future dated comp records will not be automatically updated on termination, and any regular pay in those records will remain. Such ad-hoc cases, if any, will have to be manually corrected.

Example:

Comp records prior to carrying out the termination action

Comp record1: effective 01/01/2021 with Base Salary and Severance pay

Comp record2 (Future dated salary hike): effective 01/01/2022 with Base Salary and severance pay

Termination action as of 11/01/2021

Comp records after the termination action were executed.

Comp record1: effective 01/01/2020 with Base Salary and severance pay —-Unchanged

Comp record2: effective 11/01/2021 with severance pay —-New record with Base Salary removed

Comp record3 (Future dated salary hike): effective 01/01/2022 with Base Salary and severance pay ——–Unchanged

Observe that in comp record3, the base salary remains. This will have to be removed manually.

System Process steps

• Go to the employee profile and carry out the termination action.
• Fill in the required details and save.
• Check the data in the compensation portlet.
• Confirm that there are no pay components apart from severance pay

Sample Test Scenarios

Scenario1: Future dated termination with existing severance pay.

Before termination employee had a base salary, mobile stipend, and severance pay.

Screenshot of comp info after termination action:

• Note that all pay components except Severance pay are deleted from the termination date.
• Also, note that the old Base Salary, Mobile stipend, and Severance existing before the termination date remain unchanged.

Scenario2: Future dated termination without any existing severance pay.

Before termination employee had only a base salary.

Screenshot of comp info after termination action:

• Note that the base salary is deleted, and there are no other pay components with effect from the termination date.

Scenario 3: Termination as of today with existing severance pay

Before termination employee had a base salary, mobile stipend, and severance pay.

Screenshot of comp info after termination action:

• Note that all pay components except Severance pay are deleted from the termination date.
• Also, note that the old Base Salary, Mobile stipend, and Severance existing before the termination date remain unchanged.

Conclusion 

Once this solution was implemented, the customer could automatically delimit all the pay components from the employee’s compensation portlet except severance pay from the date of his termination.

This was successfully replicated from EC to EC payroll system

References

1. https://launchpad.support.sap.com/#/notes/0002591881
2. https://launchpad.support.sap.com/#/notes/2790499