Effective Labor Rate (ELR)

ELR means Effective Labor Rate.

Consider an example below to understand the concept.

Employee Hourly Rate - GBP 100
Work Week - 5 days (Mon-Fri)
Daily Hours - 8 hours
Weekly Hours - 40 hours

Employee Rate (Without ELR)

A
Employee works for 8 hours, 5 days a week.

Employee Hourly Rate is = GBP 100

This equates to employee cost of = 8*5*100 = GBP 4000

B
Employee works for 8 hours, 3 days a week.

Employee Hourly Rate is = GBP 100

This equates to employee cost of = 8*3*100 = GBP 2400

Rate remains CONSTANT, Employee total cost VARIES based on number of hours worked.



Employee Rate (With ELR)

A
Employee works for 8 hours, 5 days a week.

Employee Hourly Rate / ELR is = GBP 100 (4000 / 40)

This equates to employee cost of = 8*5*100 = GBP 4000


B
Employee works for 8 hours, 3 days a week.

Employee Hourly Rate / ELR is = GBP 166.67 (4000 / 24)

This equates to employee cost of = 8*3*166.67 = GBP 4000

Rate VARIES, Employee total cost remains CONSTANT based on number of hours worked.

Hence the conclusion is, if the ELR is turned on, the Total Cost per week for the employee does not change, no matter whether the employee works one day or one hour in a week. Its the rate of the employee, that changes.

MOST IMPORTANT

>> ELR is looking at the calendar setup at the employee record on the 'Employment tab' and not at any other calendar setup on the employee.

>> ELR check-box on the 'Cost price' table is read-only and can only be checked when it is checked initially on the employee under 'Project setup'. Chronology of events is like this: You first setup ELR for the employee on the employee record under 'Project setup' and then define the rate for that employee in the 'Cost price' table. The moment you create a record in the cost price table and you select the employee for which the ELR is setup, the ELR check-box in the 'Cost price' table for that line is checked automatically.

>> While setting up the 'Working times' for Working time calendar (the ones which is selected on the worker record 'Employment' tab for ELR to work), user should always select the 'Working time template' or else the working times will be created with status 'Closed'.


Thanks
Sarang