Minimum Wage and Makeup Pay

Makeup pay is used within EBMS to ensure that an employee has been paid minimum wage. This is normally not necessary for hourly or salaried employees. This feature is used when an employee paid via piecework or tip pay has not earned minimum wage.

Makeup Pay is used in industries such as restaurants, where the worker's base salary is below the mandatory minimum wage. Makeup Pay is added to the sum of the employee's base wage, piecework pay, tips, and commission to match the Minimum Wage rate. Makeup pay is added if the total wage divided by the total hours is less than minimum wage (Wage / Hours < Minimum Wage).

The total work hours for non-hourly pay types are calculated using the Daily Hours totals within the Daily Hours window. Review the Daily Hours and Memos section for more details on Daily Hours.

The Minimum Wage value must be set per employee before Makeup Pay can be calculated. A minimum wage rate is commonly set for all employees. Complete the following steps to set the Minimum Wage rate for a group of employees:

Open the employee list by selecting Labor > Workers from the main EBMS menu.
Right-click on the top-level Workers category folder to open a context menu as shown below:
Click on the Edit Defaults option and click on the Pay tab of the Workers category default as shown below.

Note: To know what a default change will affect, look at the header of the page. It will show the affected category or subcategory. In the example below, it says Workers\, so default changes can be filtered down to all worker records. If the header said Workers\Clerical\, any default changes made would affect only workers within the Clerical category folder.
Enable the Is Subject to Minimum Wage option for all employees within the category folder group and set the Minimum Wage rate.
Select the Advanced tab to set the default Makeup Pay General Ledger account, as shown below. The total makeup pay expense is posted to the G/L account identified within the Makeup Pay window.
Right-click on the Makeup Pay field and select Filter Down on the context menu to apply this G/L account to all employees. For more details on filtering down defaults to individual records, review the Change Defaults, Filter Down Data and Globally Change Data section. After filtering down, this General Ledger account will be associated with all worker timecards. Click OK to save changes.
Makeup pay is automatically calculated within the employee timecard whenever the worker's rate is below the set Minimum Wage hourly rate. The Makeup Pay is displayed as a summary total in the lower part of the employee’s timecard, as shown below:

This expense is added to the employee’s gross pay and is paid and taxed like all other pay. The total makeup pay expense is posted to the General Ledger account identified within the Advanced tab of the employee record. Review the Entering Timecards section for more details on the timecard screen.
If you do not wish to process Makeup Pay for a specific employee, open the worker record, select the Pay tab and disable the Is Subject to Minimum Wage option.