This article provides detailed instructions on how to update your existing business and employee leave settings to convert leave from hourly units to the equivalent day or week units. This relates specifically to changing a leave category's accrual method from 'hours per hour worked' or 'hours per pay run' to 'standard days per year' or 'standard weeks per year' .
N.B. There may be businesses that still have the 'days per year' and 'weeks per year' accrual method in their leave category settings. These accrual methods are completely different to the recent 'standard days per year' and 'standard weeks per year' methods so please ensure you're applying the correct option. This article does not support the 'days per year' and 'weeks per year' accrual method.
We have broken down the instructions into the following components:
- Configuring employee daily hours;
- Converting leave balances from hours to days/weeks;
- Updating default business leave settings.
Please ensure all pay runs are in a finalised state before completing any of the instructions below.
Configuring employee daily hours
In order to correctly determine the number of hours to pay an employee when a day based leave category is being processed in the pay run, a new employee setting in the employee's Pay Run Defaults screen has been added - "hours per day". Employees who do not have advanced work hours set up or whose daily hours vary from that of the business daily hours should take advantage of configuring this field.
To extrapolate how many hours an employee works per day (or an average per day) from the platform, you can:
- divide the number of weekly hours worked by the number of days worked; and/or
- where employees do not have a regular work pattern and so their work hours are not accurately reflected in their Pay Run Defaults screen, generate a timesheet report over a reasonable period of time to determine an average number of daily hours. The average will be calculated by dividing the total duration over that period by the number of days worked in that period.
You can bulk update employee daily hours by exporting the employee extract, entering the value in column 'BF' HoursPerDay and then importing back in the platform. As stated above, only enter a field in this column for an employee who does not have advanced work hours configured or whose daily hours vary from the business' standard hours per day set up in the business' Details screen.
Converting leave balances from hours to days/weeks
Step 1: Determine current leave balances for existing employees
This is required in order to complete step 2. To obtain the leave balances, generate a Leave Balances Report as at the last finalised pay period end date. The report will show the employees' leave balances in hours:
Depending on what leave category you want to convert, the formula to work out the days and weeks conversion is as follows:
For Days:
Total leave hours divided by the employee's hours per day. For eg, an employee works 7.6 hours per day. Leave balance for Family & Domestic Violence Leave is 30.4 hours. The hours to days conversion will be calculated as 30.4 / 7.6 = 4 days.
Special note for Family & Domestic Violence Leave: The maximum leave entitlement per year, as per the NES, for this leave category is 5 days. Additionally, any unused leave balance does not carry over to the next year. As such, when applying the above formula, if your result is higher than 5 ensure to cap the balance at 5 days anyway.
For Weeks:
Total hours divided by the employee's hours per week. For eg, an employee works 38 hours per week. Leave balance for Annual Leave shows as 120 hours. The hours to weeks conversion will be calculated as 120 / 38 = 3.158 weeks.
Step 2: Process pay run to zero out existing leave balances
The purpose of this step is to remove all leave balances currently stated in hours that rather need to be stated in days or week. Don’t worry, another pay run will be completed to add the employees' leave balances back in the equivalent days/week units.
To complete this step, create a new adhoc pay run for each pay schedule. Do not use the normal pay schedule which you use to pay your employees as this will impact the future leave liability and leave calculations. Set the pay period ending date to be 1 day after your last pay period ending date, for eg if your last pay run had a period end date of 2/1/20, the period end date for this adhoc pay run should be 3/1/20. Ensure the "Create pay run with empty pays" checkbox is ticked.
For each employee, reverse the leave balances by completing the following steps:
- Click on Actions > Adjust Leave;
- Select the relevant leave category;
- Enter a comment to explain the reason for the adjustment (optional);
- Untick the "Apply Earnings Rules" checkbox;
- Refer to the Leave Balances Report, enter the leave balance hours as shown in the report as an opposite amount i.e. if negative, enter in as a positive amount, if positive, enter in as a negative amount;
- Repeat the above for each leave category that needs to be reversed.
Prior to finalising the pay run, you can check the employee leave balances are now set at 0 by clicking on the "Leave Balances" button (to the left of the “Actions” button) within the employee’s expanded view. Alternatively, once the pay run has been finalised, you can generate a leave balances report to check the updated leave balances. If further adjustments are required, simply unlock the pay run and adjust the negative leave balance to the correct amount.
Once all leave adjustments have been entered, finalise the pay run. Ensure the pay slips for this pay run are not published as this is merely an adjustment to leave.
Step 3: Update existing leave allowance template (LAT) settings
The purpose of this step is to ensure, moving forward, that employee balances are stated in the correct unit types. This step must also be completed before step 4 to ensure the leave category units are configured correctly before adding the converted leave units to employee balances.
Firstly, you will need to review all existing LATs set up in your business to check which leave category settings will need updating. As an example, I will use the default LAT applied in each business called "Permanent Leave - With Loading" and update these settings:
Changing leave categories where the leave balance is not tracked
An example of this leave category would be Compassionate Leave. As there is no automatic leave accrual against this category, I will just change the leave units from hours to days. To do this, navigate to the Compassionate Leave leave category. You will notice that the "Unit Type" setting is set to 'Hours'. Click on the dropdown and select 'Days'. The following message will display:
This is an advisory message explaining the consequences of changing the units of an existing leave category. If you understand and accept them, click on 'Save'. You will be asked to confirm that saving this change will update the leave unit:
Click on 'Yes' to confirm the update.
If there are employees assigned to the LAT you will now be asked whether you want to update the employees' leave settings as well to match that of the updated LAT:
Clicking on 'OK' will update the existing employees' leave settings to match the LAT. Clicking on 'Cancel' will NOT update the existing employees' leave settings.
Changing leave categories where the leave balance is tracked
An example of this leave category would be Family & Domestic Violence Leave. The existing automatic leave accrual for this category is in hours, as follows:
I want the leave entitlement to reflect what is stated in the NES, which is 5 days per year. To do this, firstly change the 'Units' and 'Unit Type' to 5 standard days per year, as follows:
This will then update the capping and carry over fields from hours to days, where you can make the following changes:
N.B.: All other settings, ie accruing based on a leave year and accruing in advance are not affected by this unit change and should not be adjusted.
Click on 'Save'. You will be asked to confirm that saving this change will update the leave unit:
Click on 'Yes' to confirm the update.
If there are employees assigned to the LAT you will now be asked whether you want to update the employees' leave settings as well to match that of the updated LAT:
Clicking on 'OK' will update the existing employees' leave settings to match the LAT. Clicking on 'Cancel' will NOT update the existing employees' leave settings.
How do I update existing employee leave settings if LATs are not assigned to employees?
Firstly, we strongly recommend you change this immediately and start using LATs. The primary reason being it is a much easier method of managing leave entitlements for each employee. The business may have a number of leave categories set up in the business that do not apply to all employees or there may be different entitlements applying to the same leave category for a group of employees. If you do not use LATs you would have to manage this on a per employee basis, which is fraught with errors and unnecessary time wastage.
For the purposes of addressing the question here you can either:
- Create the relevant LATs for the business and assign to the employees. You can do this in bulk via an employee import or on an individual basis via the employee's Pay Run Defaults screen; or
- If you still choose to not use LATs, you will need to update each employees' leave settings via the employee's Leave Allowances screen. This includes change the Unit Type of a leave category and/or changing the accrual method.
Step 4: Process pay run to add converted employee leave balances
The purpose of this step is to add the employees' leave balances back in but in the converted days/weeks format. Refer to the Leave Balances excel report you generated during step 1 that also includes the days and weeks conversion calculation.
As per step 2, create an adhoc pay run (same one used in step 2) for each pay schedule (REMEMBER, DO NOT use your normal pay schedule that you use to pay your employees as per the reason stated in step 2). Set the pay period end date as your recent pay period date, for eg if your pay schedule was weekly and using the example in step 2, the period end date will be 9/1/20. Ensure the "Create pay run with empty pays" checkbox is ticked.
For each employee, add the leave balances by completing the following steps:
- Click on Actions > Accrue Leave;
- Select the relevant leave category;
- Enter a comment to explain the reason for the adjustment (optional);
- Enter the converted leave balance amount;
- Repeat the above for each leave category that needs to be reversed.
Once all leave balances have been entered, finalise the pay run. Ensure the pay slips for this pay run are not published as this is merely an adjustment to leave.
Updating default business leave settings
Once completing the above processes to update the settings for existing employees, a few more adjustments may be needed so that leave settings for new employees are working correctly. This relates to updating the business leave category settings by converting to the correct unit type and/or updating the accrual method (ie, standard allowance setting).
Leave categories
Updating existing leave categories is significant if you do not have LATs assigned to employees. Once updated, this will mean new employees added to the business thereafter will have the new updates applied to them. Existing employees though will not - the settings for each employee will still need to be updated on an individual basis. Refer to the section "How do I update existing employee leave settings if LATs are not assigned to employees?" on how to make the changes.
If employees are assigned to LATs, refer to the section below.
Leave allowance templates (LATs)
Updating leave categories does not automatically update existing LAT settings. As such, if there are LATs you have not yet updated because they didn't apply to any existing employees (as part of completing the steps above) you will still need to manually update them. Follow the instructions provided in step 3 above on how to update these components.
Please note that any new LATs created after updating any leave categories will automatically apply the new changes.
If you have any feedback or questions, please send an email to support@roubler.com.
Comments
0 comments
Article is closed for comments.