This article explains what the Rate Differential is in HCM TradeSeal and how it affects Prevailing Wage (PW)–based Cash Fringe calculations. It’s meant to help users understand why the Cash Fringe value may change when an employee’s pay rate differs from the established PW Rate.
Location in System
You can view the Rate Differential in the Cash Fringe Calculation popup on the Rate Validation screen.
This is shown in the same popup that lists Total Prevailing Wage, Fringe Credit, Cash in Lieu, and other PW benefit components.
What the Rate Differential Does
The Rate Differential represents the difference between an employee’s actual rate of pay and the Prevailing Wage Rate for their classification and job.
In essence:
| Scenario | Result |
|---|---|
| Employee’s Rate of Pay is higher than the PW Rate | The difference becomes a credit applied toward the total fringe obligation. |
| Employee’s Rate of Pay is equal to or less than the PW Rate | No differential is applied (value = 0). |
This amount (if positive) is displayed in the popup as the “Pay rate above Prevailing Wage Rate” and contributes to the Cash Fringe calculation.
Example
PW Rate = 39.85
Rate of Pay = 60.77
Rate Differential = 60.77 − 39.85 = 20.92
That $20.92/hour difference is credited toward fringe requirements, reducing the Cash in Lieu owed.
If the PW Rate were set to $0 or missing, the system cannot calculate the differential correctly, resulting in inaccurate Cash Fringe values.
Common Setup Issues
If you notice a 0.00 PW Rate or incorrect Cash Fringe values:
Verify that the PW Rate is configured correctly for the employee’s classification.
Ensure that the Matched Rate in Rate Validation is a true PW Rate, not just a copied or unrelated rate.
Once the PW Rate is fixed, the Rate Differential and Cash Fringe will recalculate correctly.
Summary
The Rate Differential ensures compliance by offsetting PW fringe obligations when an employee’s pay exceeds the required wage rate.
If your Cash Fringe values look unexpectedly low or high, double-check the PW Rate setup and review the Rate Differential amount in the popup to confirm accuracy.