TSA Exit Acceleration
Move the time system without a payroll surprise.
Fixed-fee proposal in 48 hours. Senior team on day one. The first conversation is always free.
TSA time and attendance system separation moves the pay rules, accruals, and clock data that drive every hourly paycheck into a standalone system that feeds Newco's payroll cleanly. For shift and hourly workforces it is one of the higher risk people separations, because an error becomes wrong pay immediately, and it sits squarely in the operational scope of carve-out advisory.
A time and attendance system captures hours worked, applies the pay rules that turn raw punches into payable time, and feeds approved hours to payroll. It also tracks paid time off accruals and usage. For a salaried office it is a minor system. For a workforce of hourly, shift, or unionized employees it is the engine that determines what people are paid, and any error in it lands directly in a paycheck. In a carve-out the seller runs this system, and the buyer often underrates it until it realizes the pay rules are buried in years of configuration nobody fully documented.
The reason it matters is that hours are money. A misconfigured overtime threshold, a missing shift differential, or a wrong rounding rule does not produce a quiet accounting variance. It produces an employee paid less than they earned, or more, on the first run under Newco. For an hourly workforce that lives close to its pay, a wrong paycheck is a serious event, and a pattern of them in the first weeks of new ownership does lasting damage to trust and retention.
Because the system sits upstream of payroll, its separation has to be sequenced and tested with payroll, not as a standalone IT migration. The hours it produces are only useful if they flow correctly into pay, which is why the time system and payroll are tested together as part of the wider people readiness rather than signed off in isolation.
The hardest part of the separation is documenting and replicating the pay rules. Over years a time system accumulates rules for overtime, shift differentials, premiums, rounding, meal and rest breaks, on call pay, holiday rates, and any union or local law requirements. Much of this logic is configured in the seller's system and only partially written down. The buyer cannot simply copy a database; it has to understand each rule, confirm it is still correct, and rebuild it in the new system so the calculated pay is identical.
This is also a chance to clean up rather than carry forward complexity blindly. Some rules exist because of historical decisions that no longer apply, and some conflict with current law or policy. The buyer reviews the rule set with the people who run payroll and operations, keeps what is required, fixes what is wrong, and documents the result properly. A rebuilt rule set that is understood and documented is far more valuable than an exact clone of an undocumented configuration nobody can maintain.
Where the workforce is unionized, the collective agreements govern many of these rules, and getting them wrong is both a pay error and a labor relations problem. The buyer treats the relevant agreements as the source of truth for those rules, maps each requirement into the new configuration, and validates the result with someone who knows the agreements. This rigor connects to the broader people transition handled under the Day One HR and payroll readiness work.
Paid time off accruals are both an employee entitlement and a balance sheet liability, so they have to migrate accurately. Each employee's current balance of vacation, sick time, and any other accrued leave must come across to the new system exactly, and the accrual rules that build those balances must be replicated so they keep accumulating correctly after the cutover. An employee who logs in to find their hard earned vacation balance reset to zero will react immediately, and the buyer that has misstated the accrued leave liability has a finance problem on top of the people problem.
The accrual rules themselves can be intricate. Accrual rates often vary by tenure, employment category, and jurisdiction, and carryover caps, expiration, and payout rules differ by location and policy. The buyer maps each accrual policy, migrates the current balances, and tests that the new system grants the right accrual on the next cycle for a sample of employees across categories. Reconciling the migrated balances back to the seller's records and to the accrued liability in the accounts confirms nothing was dropped in the move.
Pending items also need a home. Approved future time off, requests in flight, and any banked overtime or comp time have to carry across so an employee's planned leave is not lost in the transition. The buyer captures the in flight items from the seller's system at the cutover and loads them into the new one, then confirms with managers that nothing approved has disappeared.
The physical and digital ways employees record time all have to keep working. Wall mounted clocks, badge readers, mobile apps, and scheduling tools may connect to the seller's system and need repointing or replacing for the new one. The buyer inventories every capture method at every site, confirms what transfers and what has to be rebuilt, and tests that a punch at a clock on a factory floor still arrives in the new system. A clock that goes dark on the first morning under Newco means employees cannot record their time, which becomes a pay dispute by the end of the week.
The integration to payroll is the critical link. The time system calculates approved hours and sends them to payroll, and that feed has to be rebuilt and mapped for the new entity. Employee identifiers, pay codes, cost centers, and the file format all have to line up on both sides, because a feed that drops records or maps a pay code wrong produces incorrect pay even when both systems are individually correct. The buyer rebuilds the integration deliberately and tests it with real data before relying on it.
Manager and approver workflows round out the picture. Supervisors approve timecards, handle exceptions, and manage schedules, and their access, hierarchy, and approval rules must be configured in the new system so the approval chain works from day one. An unapproved timecard does not pay, so the buyer confirms the workflow and trains the approvers before the first live cycle, alongside the wider system separation that the TSA Exit Acceleration service sequences.
The only reliable proof that the separation worked is a parallel run. The new system processes a real pay period in parallel with the seller's, calculating hours and pay for the same employees over the same days, and the buyer compares the results line by line. Any difference points to a pay rule, an accrual, or an integration that is not yet right, and it is investigated and fixed before a single live paycheck depends on it. A clean parallel run across a representative period, including overtime and shift premiums, is the gate for go live.
The buyer should test the hard cases deliberately, not just the average employee. A worker who crossed an overtime threshold, one who worked a holiday, one who took leave, and one covered by a union rule each exercise different logic, and they are where errors hide. Building the parallel run to cover these scenarios, rather than a handful of simple timecards, is what gives the buyer real confidence that the new configuration matches the old where it should and is fixed where it should not.
Time and attendance separation rewards the buyer that respects how much pay logic lives in an unglamorous system. Documenting the rules, migrating the balances, rebuilding the integration, and proving it all with a thorough parallel run turns a high risk migration into a quiet one where employees never notice the change. Skipping the parallel run to save time is how a carve-out ends up explaining a week of wrong paychecks to a workforce it was trying to win over.
It is the system that captures hours worked, applies pay rules, and feeds approved time to payroll. It also tracks paid time off accruals. In a carve-out the seller runs it, so Newco needs its own system before it can run independent payroll, because the hours and rules that drive pay come from here.
Employees paid the wrong amount because pay rules, shift differentials, or overtime calculations were not replicated correctly, and lost paid time off balances. Hours are money for hourly and shift workers, so an error here lands directly in their paychecks. Parallel running against the old system before go live is the control that catches it.
They should. Accrued paid time off is a liability and an employee entitlement, so the current balances must migrate accurately and the accrual rules must be replicated so balances keep building correctly. Dropping or resetting balances at the cutover is both an employee grievance and a misstatement of the liability.
The time system calculates approved hours and feeds them to payroll, which turns them into pay. The integration between the two must be rebuilt and tested for the new entity, because a broken or mismapped feed produces wrong pay even when both systems are otherwise correct. The two are tested together, not in isolation.
The benefits side of the people transition that shares the same Day One deadline.
Read the article →The downstream system the approved hours must ultimately flow into.
Read the article →How time, pay, and benefits fit one coordinated people readiness plan.
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Seven buyer-side moves to exit a Transition Services Agreement on time and below budget. The mark-up, the extension-fee curve, exit sequencing, and the 11-month calendar.
Work backwards from the first payroll cycle. Tax registrations and HRIS data have long lead times the TSA clock does not forgive.
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