PAYROLL SERVICES STANDARD

PRACTICE GUIDE

MICHIGAN TECHNOLOGICAL UNIVERSITY – HUMAN RESOURCES - 2017

 PAYROLL SERVICES STANDARD PRACTICE GUIDE

Table of Contents

Objective................................................................................................................................................................................. 2

Overview of Payroll Procedures ............................................................................................................................................ 2

Department Roles and Segregation of Duties for Payroll Processing .................................................................................. 2

Payroll Guidelines................................................................................................................................................................... 2

Payroll Processing................................................................................................................................................................... 3

Payroll Time Entry – Individual Time Sheets ..................................................................................................................... 3

Payroll Time Entry - Organizational Time Sheets .............................................................................................................. 4
Department Time Entry...................................................................................................................................................... 4
Web Time Entry .................................................................................................................................................................. 5
TimeClock Plus Entry .......................................................................................................................................................... 5
Reporting Prior Pay Periods ............................................................................................................................................... 6
Revising Prior Pay Periods.................................................................................................................................................. 6
Verifying and Monitoring Payroll Transactions..................................................................................................................... 6

Record Retention.................................................................................................................................................................... 7
Endnotes ................................................................................................................................................................................. 7

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 PAYROLL SERVICES STANDARD PRACTICE GUIDE

Objective

This guide outlines standard payroll procedures and internal controls that should be applied by all
University departments for paying employees.

Overview of Payroll Procedures

Departments are responsible for maintaining effective systems of monitoring the accuracy of its payroll
expenses, the largest expense to the University. Each step needs to be evaluated for proper controls
based on the reporting method that is used by the department. The reporting methods are payroll
time entry, department time entry, and web time entry.

Department Roles and Segregation of Duties for Payroll Processing

Regardless of the reporting method, the department is responsible for maintaining internal controls for
the payroll process. Segregation of duties needs to be established to ensure one individual is not
recording, approving and reviewing the payroll. The following are the primary roles that need to be
maintained to establish strong internal controls.

1. Timekeeper: Responsible for ensuring that time and attendance is submitted by the reporting
deadline. The employee acts as the timekeeper in the case of web time entry
2. Approver: Responsible for ensuring that time and attendance is approved and submitted by the
reporting deadline.
3. Proxy: Authorized designee for the approver in the approver’s absence.
4. Department Administrator: Departmental designee who is responsible for certifying that the
process for gathering and maintaining the data needed, along with completing and reviewing the
payroll report, has followed the University’s recommended guidelines.
5. Financial Manager/Budget Unit Administrator: Responsible for monitoring the accuracy of the
payroll by verifying the labor distribution reports.

Payroll Guidelines

All time must be approved prior to being submitted to Payroll Services for processing. The approver
needs to have knowledge that the hours reported by the employee are accurate. Time and attendance
is reported based upon the Fair Labor Standards Act (FLSA) i classification of the employee.

1. Non-Exempt (Overtime Eligible): Non-exempt employees do not meet the exemption standards of
the FLSA. All hours need to be reported on a daily basis for each non-exempt staff member using
the appropriate earn codes.
2. Exempt: Exempt employees meet the exemption standards of the FLSA. Exempt employees report
their exception time, not hours worked ii. Absences from normal work schedules are to be reported
in half day increments only. Half-day increments are converted to hours for time reporting
purposes only. Absence of a majority of a day (based on the employees work schedule) is

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considered a half-day absence for reporting purposes. Actual hours absent are not to be
consolidated for reporting at a later date.

Recommended Conversion Table

FTE Workday * Hours Absent Hours Reported

1.00 8 hours Less than 4 hours 0 hours

1.00 8 hours 4 hours or more 4 hours
1.00 8 hours All day 8 hours

0.75 6 hours Less than 3 hours 0 hours

0.75 6 hours 3 hours or more 3 hours
0.75 6 hours All day 6 hours

* 40 hours multiplied by the employee’s full time equivalent (FTE) divided by 5 days
(standard work week) equals the number of hours to be used as a standard workday.

Payroll Processing

Payroll Time Entry – Individual (Paper) Time Sheets

Collecting Time and Attendance

Employees submit their daily hours worked and exception time used during the pay period.

Approving Time and Attendance

1. The employee and supervisor (or proxy) sign off on the time reporting document.
2. The supervisor (or proxy) delivers the time to the department timekeeper. Employees
should not deliver their approved time to the timekeeper.

Submitting Time and Attendance

1. If an internal time reporting document is used by the department, the time must be
transcribed from the internal time reporting document to the pre-printed time sheet
distributed by Payroll Services prior to submitting for processing.
2. The certification page needs to be signed by the timekeeper and department administrator
(or proxy). Submit the paper time sheets and signed certification page(s) to Payroll Services
for processing in a timely manner iii.
3. The department must retain all internal reporting documents and time sheets. Please refer
to the Record Retention section of this document.

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Payroll Time Entry - Organizational Time Sheets (Rosters)

Collecting Time and Attendance

Faculty and stipend employees and additional compensation are included on the organizational
time sheets. Primarily, these employees do not have any exception time to report. Only submit
exception time used, not hours workedii.

Approving Time and Attendance

1. The employee and supervisor (or proxy) sign the time reporting document.
2. The supervisor (or proxy) delivers the time to the department timekeeper. Employees
should not deliver their approved time to the timekeeper.

Submitting Time and Attendance

1. If an internal time reporting document is used by the department, the time must be
transcribed from the internal time reporting document to the pre-printed organizational
time sheet distributed by Payroll Services prior to submitting for processing.
2. The certification page needs to be signed by the timekeeper and department administrator
(or proxy). Submit the organizational time sheet and signed certification page(s) to Payroll
Services for processing in a timely manneriii.
3. The department must retain all internal reporting documents and time sheets. Please refer
to the Record Retention section of this document.

Department Time Entry

Collecting Time and Attendance

1. Non-exempt employees submit their daily hours worked and exception time used during
the pay period.
2. Exempt employees submit exception time used only, not hours workedii.

Approving Time and Attendance (2 options)

1. Time approved prior to data entry

A. The employee and supervisor (or proxy) sign the time reporting document.
B. The supervisor (or proxy) delivers the time to the department timekeeper. Employees
should not deliver their approved time to the timekeeper.
2. Time approved after data entry
A. The employee signs the time reporting document and submits to the department
timekeeper.
B. The supervisor (or proxy) approves the time reported electronically on BANWEB after
data is entered directly into Banner by the department timekeeper.

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Submitting Time and Attendance

1. Time is entered by the department timekeeper directly into the Banner system
(PHATIME) iv. The department timekeeper is responsible for entering all time reporting
documents in a timely manneriii.
2. The department must retain all internal reporting documents and time sheets. Please refer
to the Record Retention section of this document.

Web Time Entry

Collecting Time and Attendance

1. Non-exempt employees submit their daily hours worked and exception time used during
the pay period directly onto the electronic time sheet via BANWEB v.
2. Exempt employees submit exception time used only, not hours workedii, directly onto the
electronic time sheet via BANWEB.

Submitting Time and Attendance

Employee submits time and attendance when finished entering their electronic time sheet via
BANWEB. The employee is responsible for submitting their time sheet in a timely manneriii.
This time sheet is then routed electronically to the approver.

Approving time and attendance

Approver (or proxy) will approve time via BANWEB. The approver (or proxy) is responsible for
approving time sheets in a timely manneriii.

TimeClock Plus Entry

Collecting Time and Attendance

1. Non-exempt employees submit their daily hours worked by clocking in and out of TimeClock
Plus for each shift. Exception time used during the pay period is entered directly into
TimeClock Plus by the employee’s supervisor or through the application’s Request Manager
feature.

Approving time and attendance

Approver (or proxy) will approve time via TimeClock Plus. If an approver enters an employee’s
shift manually, a proxy must approve the manually entered shift via TimeClock Plus. The
approver (or proxy) is responsible for approving time in a timely manneriii.

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Reporting Prior Pay Periods

Regardless of the payroll processing method, submissions of previous pay periods will be done
via the fillable time sheet located on the Payroll Services website vi. To complete the time sheet,
follow these guidelines:

1. Employees submit their daily hours worked and exception time used during the pay period.
2. The employee and supervisor (or proxy) signs the completed time sheet.
3. The timekeeper, approver, or proxy will deliver the completed form to Payroll Services.
Employees should not deliver their approved time to Payroll Services.
4. The department must retain all internal reporting documents and time sheets. Please refer
to the Record Retention section of this document.

Revising Prior Pay Periods

Regardless of the payroll processing method, revisions of previous pay periods will be done
either by completing the fillable manual time sheet located on the Payroll Services websitevii or
by revising a copy of the original paper time sheet or web time sheet submitted to Payroll
Services, ensuring all fields are legible. To complete the time sheet, follow these guidelines:

1. Employees submit their daily hours worked and exception time used during the pay period.
2. The employee and supervisor (or proxy) sign the completed time sheet. For copies of the
original or web time entry time sheet, write REVISED across the top of the time sheet. Check
the box next to Revised at the top of the fillable manual time sheet.
3. The timekeeper, approver, or proxy will deliver the completed form to Payroll Services.
Employees should not deliver their approved time to Payroll Services.
4. The department must retain all internal reporting documents and time sheets. Please refer
to the Record Retention section of this document.

Verifying and Monitoring Payroll Transactions

Departments are responsible for verifying that payroll transactions are accurate. Departments should
verify the accuracy of the payroll reports by comparing the payroll transactions to the employee’s
current position information. All additional pay, summer salary, bonuses, etc. should be verified
against the department’s records. Any unauthorized or inaccurate transactions are to be investigated
and resolved immediately. Verifying tools include:

1. HYOPAYG002B – Employee List: report is distributed to each time sheet organization on

Wednesday afternoon of off payroll week. Title, annual salary/hourly rate, index distribution, and
additional compensation are a few of the items available for verification.

2. HYOPAYE001 – Gross Earnings: report can be run in Banner (GZAORPT) biweekly after payroll is
complete. Earn codes used per employee, account code(s) charged, total hours charged, and gross
amount charged are a few of the items available for verification.

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3. HYOEMP004 – Leave Balance Report: report is sent after each pay period is complete. This report
should be used to verify exception hours available.

Record Retention

Record retention periods for specific documents that are not retained by Payroll Services are provided
below:

Payroll Time Sheets - Departments that submit hardcopy time sheets to the University Payroll Office
must retain photocopies of these time sheets for one year plus the current year. Copies of the time
sheets are typically used to reconcile against the Gross Earnings report and the Leave Balance report.
The copies can also be used to provide support for payroll transactions. The University Payroll Office
retains the hardcopy time sheets for seven years plus the current year.

Time Reporting Documents - Departments using internal time reporting documents signed by the
employee must retain these documents for either seven years plus the current year, or, if an employee
works on a sponsored project, for three years and three months after the end date of the project,
whichever is longer.

Endnotes
i
Fair Labor Standards Act - http://www.dol.gov/WHD/flsa/index.htm
ii
Under certain circumstances, hours are used for the purpose of labor distribution and are not a representation of hours worked.
iii
Payroll Processing Calendar - https://www.mtu.edu/hr/supervisors-admins/payroll/calendars/
iv
Department Time Entry Handbook - http://www.admin.mtu.edu/hro/payroll/ete/DTE_Handbook.pdf
v
Web Time Entry Handbook - http://www.admin.mtu.edu/hro/payroll/ete/WTE_Handbook.pdf
vi
Manual Time Sheet - http://www.mtu.edu/hr/supervisors-admins/payroll/docs/timesheet.pdf

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