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Administrator Guide
Last Updated: 2023-06-23
Example: Set Up Severance Allowances Based on the Legal Requirement (FRA)

Example: Set Up Severance Allowances Based on the Legal Requirement (FRA)

This example illustrates how to create the minimum legal severance indemnity for a worker with an unlimited contract.
You need to pay the legal severance amount to terminated workers with unlimited contracts.
  • Map local termination reasons and employee types to payroll calculations.
  • Define the worker's seniority start date, if different from the hire date.
  • If applicable, define the notice period for the worker's termination.
  • Define which absences freeze seniority accrual.
  1. Access the
    Edit Earning
     task to exclude earnings from the full-time equivalent (FTE) reference taxable wages used in the severance allowance calculation.
    On the
    Non-Effective Dated
     tab, from the
    Groups
     prompt, select the appropriate pay component group to exclude or include the earnings in the FTE reference taxable wages.
    Security:
    Set Up: Payroll (Calculations - Payroll Specific)
     domain in the Core Payroll functional area.
  2. Access the
    Create Value Comparison Calculation
     task.
    Enter these values:
    Option
    Value
    Name
    Severance Amount Not 0
    Category
    Payroll
    1st Operand
    Severance Legal Indemnity [FRA] - Considered Amount
    Operator
    not equal to
    2nd Operand
    0
    Security:
    • Set Up: Payroll (Calculations - Payroll Specific)
       domain in the Core Payroll functional area.
    • Set Up: Time Off (Calculations - Generic)
       domain in the Time Off and Leave functional area.
  3. Access the
    Create Earning
     task.
    Create an earning with these settings:
    Option
    Value
    Name
    Severance allowance
    Worker Eligibility
    Severance Amount Not 0
    Calculation
    Severance Legal Indemnity [FRA] - Considered Amount
    Groups
    On the
    Non-Effective Dated
     tab, select
    FRA Adds to Net [FRA]
    .
    Security:
    Set Up: Payroll (Calculations - Payroll Specific)
     domain in the Core Payroll functional area.
You have configured severance allowances based on the legal amount. When you calculate pay results, Workday includes severance allowances for eligible workers in the payroll period of their termination.