Making Vacation Pay Taxable for Union Employees

If you employ union workers and need to deduct taxes for their vacation pay, complete the following steps.

  1. On the Site Map screen, click Payroll > Maintenance > Union.
  2. In the Union code field, enter the union code, or press F4 or double-click on this field to select from a list of valid union codes.
  3. In the Name field, enter the union's name or description.
  4. In the Craft field, enter the union's craft or trade.
  5. In the first Deduction code field, enter the vacation deduction code (for example, VC) and then press Enter.
  6. In the Descriptions field, enter a short description for the deduction code (for example, VACATION).
  7. In the Method field, use the drop-down list to select the deduction method.
    Note: This typically defaults from Deduction / Add-on Code Maintenance.
  8. In the Rate field, enter the union assigned deduction rate.
  9. Select the Gross pay checkbox and then save the information.
  10. The Union Rates Maintenance screen automatically displays. In the Union code field, enter the union code.
  11. In the Title / description field, enter the job title and then press the down arrow. Enter all job titles related to this union.
  12. Place the cursor in the Level 1, Regular field, and then press F4 or double-click on this field to open the Base Rates window.
  13. In the Base field, enter the union required pay rate (not including the vacation rate) for all union levels and then click OK to return to the Unioncode field. Spectrum will automatically calculate all amounts in the Regular, Overtime, and Double time fields and will save the changes.
  14. On the Union Rates Maintenance screen, click OK to update the pay rates for all job titles and then click OK until you return to the Site Map screen.
  15. If wage codes are associated with the union code and the wage codes have vacation pay rates, complete the following steps. On the Site Map screen, click Payroll > Maintenance > Wage > code.
  16. In the Wage code field, enter a new wage code in Add mode.
  17. In the Union code field, enter the corresponding union code.
  18. Complete the fields in the Properties section of the screen and then press Enter until the cursor is in the Level1, Regular field, and then press F4 or double-click on this field.
  19. In the Rates window, place the cursor in the Level 1, Base field and then enter the wage code rate (not including vacation). Repeat this step for all pay levels within this wage code.
  20. Click OK until the cursor returns to the Wagecode field. Spectrum automatically calculates and updates the new rates (that include the vacation fringe).
  21. Repeat steps 15-20 for all remaining wage codes associated with this union code.
  22. When all wage codes rates are in the software, click OK until you return to the Site Map screen.
  23. On the Site Map screen, click Admin > Installation > Payroll > Defaults.
  24. If the Higher of the two rates option is selected and the employee's rate in the Payroll > Maintenance > Employee > Financials > Hourly rate field is higher than the wage code / union code rate, increase the employee's rate (in the Payroll > Maintenance > Employee > Financials > Hourly rate field) by the amount appropriate for the pay rate.
    Note: For example, if the union vacation amount that the employee is to be taxed on is $1.00 per hour, increase the employee rate by $1.00. If the union vacation amount is defined as 5% and the employee's rate is $24.00 per hour, increase the employee's rate to $25.20.
  25. If the Higher of the two rates option is not selected, click OK until you return to the Site Map screen.