From Definitiv version 3.10, two new award rules are introduced;
IF rule: Number of Days Worked
THEN rule: Add Leave Policy
These rules can be leveraged for multiple purposes to automate the calculation of entitlements in the payroll process.
One way it can be utilised is by entitling an employee to an additional week of leave once they have worked a specified number of shifts on certain days of the week to meet the definition of a shift worker.
As per the National Employment Standards, an employee who meets the definition of a shift worker as per their award or agreement is entitled to five weeks of annual leave a year.
How it works
With Access Definitiv, employees have always been able to be granted five weeks of annual leave, instead of the standard four weeks, if it was not dependent on meeting certain criteria. This is because the leave policies within the software are highly flexible, allowing for different accrual rates to be set.
However, if you want to only grant an additional week of leave when an employee meets certain criteria, e.g., has worked a specified number of Sundays and public holidays, the two new rules mentioned above could help your organisation automate the calculation of this addition and the accompanying entitlements.
The new Number of Worked Days rule calculates the days worked over a static 12 month period which re-sets in line with an employee’s hire date.
Example Scenario
Scenario: A full-time employee becomes entitled to five weeks of annual leave once they have worked 34 Sundays and/or public holidays in a 12 month period. The 12 month period resets on the employee’s work anniversary date.
Molly, a full-time employee hired on 1 January 2019, is contracted to work 38 hours a week and has agreed to work work shifts on any day of the week, including weekends and public holidays. The company rosters on a fortnightly basis so it is not known upfront if Molly will end up working 34 Sundays and/or public holidays throughout the year.
While Molly may not yet meet the definition of a “shift worker”, she is always guaranteed a minimum of four weeks of annual leave and two weeks of personal leave with each year of service as per the National Employment Standards.
As Molly is guaranteed four weeks of annual leave and two weeks of personal leave, this is set up on Molly’s master record under the Leave Policies tab.
On 30 September 2023, Molly reached the 34-day count, which entitles her to an additional week of annual leave or five weeks of annual leave in total.
Utilising the new Number of Days Worked award rule, Access Definitiv can count the 34 shifts worked on the Sundays and public holidays.
Then, with the new Add Leave Policy, Molly can be granted an additional week of leave.
As per the four weeks of annual leave applied on Molly’s master record, the additional week of leave is accrued pro-rata over the nine months from 1 January to 30 September. As Molly officially became entitled to the additional week on 30 September, the pro-rated leave accruals for this additional week will be undertaken as backpay calculations in the next pay run processed.
The remaining portion of the week will be accrued over the final three months of the 12 month period.
Calculations
Dates | Item | Details | Rate | Weekly Worked Hours | Accrual Hours Calculated |
1 Jan - 30 Sep | 4 weeks annual leave | This is the standard four weeks applied on Molly’s master record | 4 weeks / 52 weeks = 7.6923% | 38 | Per week: 2.9231 Over 9 months (39 weeks): 114 |
30 Sep | 1 week annual leave | On 30 September, the additional leave will be calculated as backpay from 1 January up until the pay run where 30 September is included. | 1 week / 52 weeks = 1.9231% | 38 | Per week: 0.7310 Over 9 months (39 weeks): 28.5 |
1 Oct - 31 Dec | 5 weeks annual leave | From 30 September to 31 December, Molly will be accruing based on being entitled to five weeks of annual leave a year. | 5 weeks / 52 weeks = 9.6154% | 38 | Per week: 2.9231 Over 3 months (13 weeks): 47.5 |
1 Jan onwards (following year) | 4 weeks annual leave | From 1 January the following year, the count will reset and Molly will return to the standard four week rate. | 4 weeks / 52 weeks = 7.6923% | 38 | Per week: 2.9231
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Based on the above calculations, you can see that in the first 12 months, Molly accrued a total of 190 hours or five weeks of annual leave.
Configuration
To take advantage of these two new rules together, follow these simple steps;
1. Create a new leave policy
If you are planning on simply entitling an additional week of leave for your employees once they have reached the definition of a shift worker, you may need to add a new item to your library of leave policies.
Firstly, navigate to Admin, Policies, Leave Policies.
Select Add New Leave Policy.
Give the policy a name and description.
Click on the + symbol to add a leave type.
Fill in the following information;
Accrual Type = Fixed Percentage
Percentage Rate = 1.9231
Applicable Pay Items = Select the pay items annual leave is to accrue on (Note: We suggest referring to your standard leave policy to confirm which pay items you have annual leave accruing on)
Click Save
The above screenshot illustrates the policy setup (Note: The pay items in the Applicable Pay Items field will be based on your organisation’s configuration and requirements).
2. Add the new rules to an award
As mentioned in this article, these rules can be used for multiple scenarios. However, we will be listing out the steps to follow for the purpose of entitling an employee to an additional week of annual leave when they work a specific number of days.
Before implementing the following steps, please consider the following;
Updating awards and testing the changes in a test environment first before implementing them in your live environment. A test environment can be requested through a consulting ticket.
When you need these rules to apply from in your live environment. If you have already created multiple versions of an award and want these new rules to apply from the commencement date of a locked previous version, you will need to log a consulting ticket.
Steps to follow;
Navigate to Admin, Policies, Award Policies.
Open the award policy these rules are to be added.
Create a New Version.
Add the applicable Cease Date to the old version and Commencement Date to the new version.
In the new version, add an IF rule (the purple plus symbol also known as a Condition) in the Award Rules section.
In the first drop-down menu, select the rule Timesheet Type;
In the second drop-down menu, select the rule Timesheet Hours; and
Unless required, the remaining checkboxes in this rule can remain blank.
If this entitlement is to only apply to a specific group of people, add additional IF rules as children to the above rule to narrow down the selection, e.g. employment status of “Full Time” and “Part Time” or only those working in a specific department or project.
Add another IF rule and choose the Number of Days Worked option in the first drop-down selector.
Select the days of the week to be counted when an employee works on it;
In the second drop-down menu, select “Greater Than or Equal To”; and
In the last field, type the number of days to be reached. Using the above scenario, 34 would entered.
Finally, add a THEN rule (the orange plus symbol also known as an Action) and choose the “Add Leave Policy” option (not to be confused with the Apply Leave Policy option) in the first drop-down selector.
Select the policy created in Step 1.
Click Save.
See below for how it will display as a group of rules.
We have also added a Set Exception THEN rule as seen in the above screenshot to provide us with a warning in the pay run if an employee is currently accruing an additional week of leave.
Hint: We suggest giving a name to this group of rules so all administrative users can easily identify what this rule group relates to if updates are required in the future. This can be done by clicking on the speech bubble symbol on the top IF rule and typing in a description.
Impact on the Pay Run
When it comes to the pay run, this award rule group will have an impact once the employee reaches the required count of days.
As an employee will not likely reach the count in the first pay cycle of the 12 month, once they have met the criteria, there will be backpay calculations when allocating the additional leave entitlements.
If we use Molly as an example, we would expect the below to occur;
Up until 30 September, Molly would have been accruing annual leave at the four week rate of 7.6923% in each weekly pay run.
Molly then reaches the timesheet count on 30 September.
The 30 September falls in the weekly pay cycle that runs from 24 September to 30 September.
This weekly payroll is always done in arrears and the payroll officer will be running this specific pay run on 2 October.
From 24 September to 30 September, Molly’s accrual rate for annual leave will be 9.6154%.
Molly will also have backpay calculations dating back from 1 January to 23 September for each day worked at an annual leave accrual rate of 1.9231%.
Impact on Accrual Balances
The great news is that when an employee meets the criteria to be entitled to an additional week of annual leave, this will be reflected in their accrual balances.
If projecting accrual balances on an employee’s master record or via the Accrual Liability report, you will be able to see the following;
Once they reach their days, projections for annual leave will be based on the five week rate up until the anniversary of their hire date.
Projections for annual leave past their anniversary date will return back to the four week rate.
Projections do take into consideration work schedules and rosters so if you do project to a date when they are expected to reach the count, then it will project to the five week rate again.
Important Information and Considerations
When implementing the Number of Days worked rule, there are some considerations that your team needs to be aware of when using it in an award policy;
Static period: It can only calculate over a static and repeating 12-month period.
Anniversary date: The start of the 12-month period is always on the anniversary of an employee’s hire date. This should cater for the majority of employees. However, if you have had employees shift from a casual to a permanent role, this date may not line up with their hire date and the date on which annual leave starts to accrue.
Shift start day: To ensure a shift that surpasses midnight is never counted twice, currently a timesheet will only be added to the count if it starts on the specified day, e.g. using Molly as the example, if she had a timesheet that started on Saturday and ended on Sunday, it would not be counted. However, if she had a timesheet that started on a Sunday and ended on a Monday, it would be counted.
No minimum hours: In some modern awards and agreements, employees may be required to work a minimum number of hours for a shift to be counted. Currently, the Number of Worked Days rule cannot take into consideration these minimum hour requirements.
Award commencement date: Up to the first 12-months of this rule being in place, it can only calculate backpay back to the commencement date of the award policy or version it came into effect.
Time and attendance reports: If you need to reconcile the number of days worked counted against actual timesheets, you can easily do this through the Time and Attendance reports available in Access Definitiv.