Automate your Payroll Time in Lieu Calculations

This article will walk you through several scenarios where you can automate the calculation of accruing and taking time in lieu.

 Common scenarios for this Rule Set include:

• The employee can accrue time in lieu of overtime at a rate of 1 hour for every hour of overtime worked.
• The employee can accrue time in lieu of overtime. The hours accrued will equate to the penalty rate for the overtime that would have been received.
• A salary employee will submit timesheets for different locations but still need to just be paid their standard hours per week.

NB. Pay condition rules only work if the rule set is applied to the employee's Pay Run Defaults page.

Configuring the pay category

You'll need to go to the Payroll settings > Pay categories page and add a new pay category which will be used when creating the rule set. The pay category in this scenario will be a new (not linked) pay category called 'Time in Lieu', and this will accrue leave and super:

Configuring the leave category

You'll need to go to the Management > Payroll > Payroll settings > Leave categories page and add a new leave category which will be used when creating the rule set. The leave category in this scenario will be called 'Time in Lieu' with the following settings:

• Leave loading: Nil
• Leave category type: Standard
• Employee leave balance: Tracked
• Do not tick any of the following 2 boxes:
  • Automatically Accrues
  • Exclude from termination payout
• The next 3 boxes are a personal preference and relate to whether or not you want the leave showing in the portal and the leave calendar
• Payment setup: Report the earnings for the leave taken against another pay category, and select the 'Time in Lieu' pay category. Also, tick the box that says 'Use pay rate of Employee's primary pay category for transferred earnings line'.

The leave category settings should look like this:

 

Configuring the work type

The next part of the process is setting up the required work type. You'll need to:

1. Create a work type which can be used by the employee to indicate that they are taking time in lieu
2. Call it 'TIL leave taken' (this will only be applicable for full-time and part-time employees in this scenario but you are free to alter this)
3. Link it to the 'Time in Lieu' leave category that you created earlier. 
4. Click 'Save'
   
   

Configuring Tags

You can apply tags to specific employees, and then use them in rule sets as a way of specifying individual or groups of employee in which a specific rule should apply. For example, in the case of time in lieu, we can use a tag to decide whether a time in lieu rule is triggered according to whether or not the employee has the tag. This is especially handy when not all employees accrue time in lieu.

You'll need to go to Management > Payroll > Payroll settings > 'Tags' page and add a tag that says something like "TIL". Once you add the tag you'll be able to apply it to the required employees by ticking the box alongside their name

 

Configuring the rule sets

If your employees are already attached to a rule set, you will need to add the rules in addition to the existing rule set so that they are still linked to the other existing rules. To do this, go to the Management > Payroll > Payroll Settings >Pay Condition Rule Sets page and click on the existing rule set. If they are attached to an award, you'll need to select the award first from the drop down box. 

If your employee is not already attached to a rule set, and you don't want these rules to be part of any existing rule set, you can create a new one for this purpose. To do that, go to the Management > Payroll Payroll Settings > Pay Condition Rule Sets, and click the 'Add' button to the right of the page. 

One thing to note about rule sets before going further is that rule sets work in order of evaluation from top to bottom, meaning the processing of the rules at the bottom happens last. In most cases, you want something that pays the employees more to happen at the bottom.

The employee can accrue time in lieu of overtime at a rate of 1 hour for every hour of overtime worked (scenario 1)

Once you have your rule set in order, you'll need to create the following rule (called 'TIL 1 hour to 1 hour of OT') using the below instructions:

1. WHEN time worked in a shift period (you can change this to weekly, day etc to suit your needs)
2. WHERE (you'll need to click the cog icon on the right to see this option) TAGS - employee has the following tags 'TIL'
3.  IS greater than employee standard hours (be aware with this rule, the employee standard hours are those hours on the Employee file > Pay run defaults page.) 
4. THEN select 'multiple actions' first before you then apply pay category NONE
5. AND add leave accrual of 1 unit of 'time in lieu' per hour worked. 
6. Click Save

The employee can accrue time in lieu of overtime. The hours accrued will equate to the penalty rate for the overtime that would have been received.

Add another rule called 'TIL at penalty rates'....

1. WHEN time worked in shift period 
2. WHERE (you'll need to click the cog icon on the right to see this option) pay category is Overtime + 50% (for example)
3. is greater than 0 hours (i.e. all hours that fit that criteria)
4. THEN multiple actions 
5. apply pay category NONE
6. AND (to do this, click the 'Add rule' button on the right hand side) add leave accrual of 1.5 units of time in lieu per hour worked

Like the previous rule, you can look at adding the criteria of a tag in order to have this rule trigger for specific employees as opposed to all of them. 

The important thing to note in this rule is that it will only trigger if the 'overtime +50%' pay category has been used. If you would like to automate overtime pay conditions, this article will show you how: How to Automate Overtime using Rule Sets

A salary employee will submit timesheets for different locations but still need to just be paid their standard hours per week.

Quite often, salaried employees are going to be paid the same hours every week, so, a common example might be that they are paid for 38 hours each week at their particular hourly rate. However, if you would like their wages to be divided up into different locations, you might want to use timesheets. The following rule set will pay the employee their standard hours, but will accrue time in lieu for any hours above this. Additionally, time in lieu will be taken if they do not work their standard hours. 

Create a rule called 'Salaried TIL'. This will be very similar to the first scenario rule....

1. WHEN time worked in a week (you can change this to shift period, day etc to suit your needs)
2. WHERE (you'll need to click the cog icon on the right to see this option) TAGS - employee has the following tags 'TIL'
3. WHERE employment type is full-time
4.  IS greater than employee standard hours (be aware with this rule, the employee standard hours are those hours on the Employee file > Pay run defaults page.) 
5. THEN select 'multiple actions' first before you then apply pay category NONE
6. AND add leave accrual of 1 unit of 'time in lieu' per hour worked. 
7. Click Save

Now, you can also automate the scenario where they work under their standard hours. 

Create a rule called 'under time' and:

1. WHEN time worked in a week
2. WHERE (you'll need to click the cog icon on the right to see this option) TAGS - employee has the following tags 'TIL'
3. IS less than employee standard hours (be aware with this rule, the employee standard hours are those hours on the Employee file > Pay run defaults page.) 
4. THEN add remaining time
5. AND apply pay category NONE
6. AND (to do this, click the 'Add rule' button on the right hand side) add leave accrual of -1 units of time in lieu per hour worked
7. Click Save

What this will do is reduce the employees TIL balance by the number of 'under worked' hours and will pay them their standard hours. 

Testing the rules

You can check what's happening for each shift by using the rules tester...

• go to the Rule Sets page (under Payroll Settings > Pay Condition Rule Sets)
• select the Award from the drop down menu at the top of the page (if nec)
• select the rule set you want to check
• hit the Test Rules button
• check the current period dates (the pay run period dates should match exactly to the current period or a previous period)
• click on the Import button
• select the employee whose shifts you want to test
• scroll down and hit Run Test

Once each day's earnings are displayed you can expand the day you want to check and click on the question mark to show you the list of rules that have been triggered by that shift, eg...
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Then you can go check each rule that was triggered and see how/why it has been applied to that shift - keep in mind that rules are applied in order from top to bottom so a rule that's triggered may be overridden by another rule further down the list.

If you have any questions or feedback please let us know via support@roubler.com