Unable to define a labor schedule of type "payroll costing configuration"

I am trying to test the functionality introduced in 25A to distribution payroll costs based on payroll costing configuration, however the payroll cost segments are not available for me to pick when i choose this schedule type. Per the release notes there wasn't any additional set up needed, am I missing something.

I get the below error but I dont have any option to pick a payroll segment in the screen