Concept: FLSA and Retro Differences from Current Tax Authority Change

When Workday calculates FLSA overtime premium adjustments in the regular on-cycle pay result, the overtime premium is based on the source gross to net. However, the taxation for the adjustment occurs where the worker receives the adjustment using the current tax authorities (unless you specify a worktag override on the source result).

Depending on your business requirements, you'd need to make manual tax adjustments on the pay result where the adjustment occurs.

You process retro for a worker who moved from California to New York with an overtime premium that doesn't cross states.

In Period 1, you pay the California worker overtime and an FLSA bonus with coverage dates for the current period only. Effective for Period 2, the worker moves to New York.

When you add retroactive overtime back to Period 1, which is a supported retro event, Workday:

Calculates retro differences.
Pays overtime and premium in an on-demand payment for California (tax authority of the source period).

You process retro for a worker who moved from California to New York with an overtime adjustment that crosses states.

In Period 1, you pay the California worker overtime. Effective Period 2, the worker moves to New York. You pay an FLSA bonus with coverage dates back to Period 1. Workday calculates premium adjustments for the overtime in Period 1 and pays in the current state of New York.

When you add retroactive overtime back to Period 1, Workday:

Calculates retro differences.
Pays Overtime in an on-demand payment for California (tax authority of the source period).
Pays FLSA premium adjustments in Period 3 in an on-cycle payment for New York (tax authority of the current period).