This article explains how back pay batches change pay rates when you apply a backdated rate increase. It uses worked examples to show how the system adjusts existing validity periods for both pay agreements and individual payees.
Understand How Back Pay Batches Affect Pay Rates
A back pay batch applies a new pay rate from a past (backdated) effective date. When you process the batch, the system updates existing rate records by:
Shortening any current rate that overlaps with the backdated start date.
Creating or updating rate entries so the new rate applies from the backdated date onwards.
There are two common types of back pay batch:
Agreement back pay batch – updates the pay rate rules in a pay agreement.
Payee back pay batch – updates the pay rates stored on an individual payee’s record.
Agreement Back Pay Batches
An Agreement back pay batch updates the pay rate rules defined in a pay agreement. The system adjusts the validity periods so that the new rate applies from the backdated date for all affected periods.
Example: Agreement Back Pay Batch Before Processing
A pay agreement has the following pay rate rules:
Pay Rate Rule | Rate Type | Rate | Validity Period |
1 | Flat Rate | $10.00 | 01/01/2011 - 03/01/2011 |
2 | Flat Rate | $12.00 | 04/01/2011 – 05/01/2011 |
3 | Flat Rate | $14.00 | 06/01/2011 - ongoing |
You process a back pay batch that updates the pay agreement with a new pay rate of $16.00, backdated to 02/01/2011.
Example: Agreement Back Pay Batch After Processing
After the back pay batch is processed, the pay rate rules are updated as follows:
Pay Rate Rule | Rate Type | Rate | Validity Period |
1 | Flat Rate | $10.00 | 01/01/2011 - 01/01/2011 |
2 | Flat Rate | $16.00 | 02/01/2011 – 03/01/2011 |
3 | Flat Rate | $16.00 | 04/01/2011 - 05/01/2011 |
4 | Flat Rate | $16.00 | 06/01/2011 - ongoing |
From this example you can see:
The original $10.00 rate is shortened so it only applies to 01/01/2011.
The new $16.00 rate applies from 02/01/2011 onwards.
All later periods are updated to use $16.00 for the entire remaining validity.
Payee Back Pay Batches
A Payee back pay batch updates the hourly pay rates stored on a specific payee’s record. The system adjusts the payee’s rate history so the new rate applies from the backdated date for all future periods.
Example: Payee Back Pay Batch Before Processing
A payee has the following hourly rates defined:
Rate Type | Rate | Validity Period |
Hourly Rate | $17.00 | 01/06/2011 - 03/06/2011 |
Hourly Rate | $18.50 | 04/06/2011 – 10/06/2011 |
Hourly Rate | $19.00 | 11/06/2011 - ongoing |
You process a back pay batch that updates the payee’s hourly rate to $19.50, backdated to 02/06/2011.
Example: Payee Back Pay Batch After Processing
After the back pay batch is processed, the payee’s hourly rates are updated as follows:
Rate Type | Rate | Validity Period |
Hourly Rate | $17.00 | 01/06/2011 - 01/06/2011 |
Hourly Rate | $19.50 | 02/06/2011 – 03/06/2011 |
Hourly Rate | $19.50 | 04/06/2011 - 10/06/2011 |
Hourly Rate | $19.50 | 11/06/2011 - ongoing |
From this example you can see:
The original $17.00 rate is shortened so it only applies to 01/06/2011.
The new $19.50 rate applies from 02/06/2011 onwards.
All subsequent periods on the payee’s record are updated to use $19.50.