How leave works in foundU
Getting how leave works on your platform is pretty important for setting it up in a way that works best for your business. It also makes life easier for your managers when they're adding, reviewing, or approving leave requests, and when they're running reports.
By understanding how leave works, you'll be able to gather a better understanding of:
- What hours will default on an employee's leave application
- How can an employee's future leave balance be estimated
- What loadings or penalties can affect an employee's leave
This article will cover:
- The high-level process of leave applications
- The settings & options that affect leave application hours
- The settings & options that affect how leave is paid
- Options around penalty rate leave
If you'd like to learn more about setting up a leave entitlement, you can refer to our guide here. Also, to manage your leave settings, you can visit this article.
There are several ways you can approach and handle leave on your platform. Each method is listed below and depends on your specific situation.
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- Employee submits a leave application via the Employee App - This is the preferred method, particularly for submitting upcoming leave, such as Annual Leave.
- An admin may submit leave on behalf of an employee - Useful for submitting leave applications when switching from another payroll software.
- Leave may be added to a shift in Approve Shifts - Beneficial for adding Personal Leave to a shift that was partially worked.
- Leave may be added directly to a payslip - This method can be used when cashing out leave (non-termination).
This process is an overview of applying and managing leave for current employees. If you are looking to manage leave for terminations, please refer to our article Terminate, offboard or reactivate an employee.
The standard leave workflow:
- The employee submits a leave application.
- A manager is notified of the leave application and will then approve or decline it.
- The employee is notified of the outcome of their leave application.
- Approved leave applications will be visible on the roster and will automatically flow through to the payslip.
Want to see how your managers will manage leave? Check out our helpful guide here!
The processes around leave are simple, but it's important to have a good understanding of how your leave is being paid, where the data is coming from, and what customisation you have available.
The following parts of the platform can or will affect leave.
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- Award setting
- Leave settings
- Leave entitlement configuration
- Work pattern
- Rostered shifts
- Manual edit to the leave application
- Manual edit to leave on a payslip
Firstly, let's look at the parts that will impact the leave application hours.
Leave application hours
Work Pattern
All permanent employees will have a work pattern added as a part of their primary position setup. The work pattern is where you specify the number of hours the employee works each day.
Some additional features of the work pattern you can use to further customise include:
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- Work patterns can be set for up to 8 weeks, and then they repeat automatically until you update them. You can also schedule changes in advance.
- Additionally, you have the option to set the shift times and an unpaid break in the work pattern.
The work pattern is used for leave in a couple of ways:
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- Applies a default number of hours that a leave application will default to for specific days
- Used to calculate the predicted balances for future leave applications and reporting
- With shift times entered, penalty rate loading calculations are performed
Rostered Shifts
When setting up positions for your permanent employees, there are 2 settings you can review that impact how leave can be applied. The setting we are looking at is the 'When calculating, leave, a rostered shift will overrule the work pattern'.
When this setting is enabled, if an employee has a rostered shift for a day that a leave application covers, the hours of the shift will be used as the default value for that day, rather than the work pattern.
This is especially useful when employees call in sick and submit their leave applications. This will also work in conjunction with penalty rate leave. The time of the shift will be used in the calculations for the correct loading to apply.
Please note: If an employee does not have a rostered shift when submitting leave (e.g., a future leave application), the work pattern's hours will be used as the default.
Manual Edit to Leave Applications
The work pattern and (optionally) rostered shifts will directly impact the default value for leave applications. However, if you provide your employees with the ability, the number of hours per day can be manually adjusted.
Admins may also adjust the hours per day of leave applications up until they have been paid.
SCENARIO
We'll use the following example to look at how the above options will work together.
Kara is a full-time employee but works irregular hours. She applies for annual leave for 4 days, spanning Thursday to Sunday. Let's factor in the following:
Work Pattern
- Kara's work pattern is set to 7.6 hours Monday - Friday.
- The setting to prioritise rostered shifts over the work pattern is enabled.
- Kara is rostered for 8 hours on Thursday but has no shift on Friday, Saturday, or Sunday.
Manual Edit of Leave Application
- During the leave application, Kara edits the hours for Saturday and selects 4 hours.
For Kara's situation, you will find that the hours per day on her leave application will come from multiple sources.
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Thursday - 8 hours were applied for due to the rostered shift on that day. As the setting in the work pattern is enabled, these hours (whether higher or lower) take precedence.
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Friday - 7.6 hours were applied for due to the work pattern. As there was no rostered shift, the work pattern is used to determine the leave hours.
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Saturday - 4 hours were applied due to a manual addition.
- Sunday - 0 hours were applied. With no rostered shift, no hours specified in the work pattern, and nothing added manually, 0 hours will pull through as standard.
Please note: The work pattern & rostered shift settings affect the default value on any particular day. With the settings enabled to do so, employees can override the hours of leave used per day during the application process.
Leave payment, accruals, and configuration
The sections below of the platform will affect leave in various ways.
Award Setting
There are two settings that can be configured on a per-award basis that will directly impact how leave is paid.
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- Leave loading percentage
- Pay penalty rates if higher than leave loading
Both of these settings relate to the loading that is paid to employees when they take leave. You can read more about these settings and enabling them in the Award Settings article.
Leave Settings
There are several platform-wide settings that affect the leave application process as well as the communications & visibility of leave. From within Leave Settings, you can adjust the following:
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- The ability for employees to edit the hours per day on their leave applications
- Whether an unpaid leave type is used to cover applications without enough hours
- The ability for leave to be visible on external calendars
You can read more about these settings and their use in the Leave Settings article.
Leave Entitlement Configuration
Within the setup of each leave entitlement, you can control:
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- Whether leave loading is applied
- Whether the entitlement is used in calculations for workers' compensation, payroll tax, and public liability
- Who the entitlement can be applied to (permanent and/or casual employees)
- Whether employees can apply for the entitlement, and if so, whether they can view their balances
In addition to the above, there are several options available that can be customised on a per-employee basis. These include:
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- Overrides for accrual rates & leave loading
- Allowing negative accrual
- Override for pay rate (workers' compensation & paid parental leave only)
You can read more about setting up leave entitlements here.
Manual Edit to Leave on a Payslip
Once leave applications are approved, they will flow through to draft payslips. If needed, some details can be edited directly on the payslip (such as hours and loading rate), and leave can also be cashed out (non-termination) through editing. These changes will be updated on the Time Off page.
You can read more about editing payslips here and cashing out leave here.
Many awards will pay higher rates for weekends or for shift work. When leave applications fall on those days, the leave loading may be less than the shift or penalty rates for those days.
If your award or EBA calls for it, you can choose to pay the higher rate, penalty rate, or leave loading.
Several settings and options are available here to help you implement this in a way that suits your business needs.
Award Settings
There is a setting that must be enabled on a per-award basis to use this feature. You can choose to apply it to all leave types or only specific ones.
Work Pattern
All permanent employees will have a work pattern configured as a part of their primary position setup. The work pattern is where you specify the number of hours the employee works each day. You can also optionally set the shift times in the work pattern.
Rostered Shifts
Within the work pattern configuration of the primary position of permanent employees, there is an option to consider rostered shifts before the work pattern when calculating leave.
SCENARIO A - Award Settings
We'll use the following example to look at how the above elements will work for penalty rate leave.
Kara is a full-time employee and has applied for 3 days of annual leave. From Friday to Sunday.
Please note the following configurations.
Award Settings
- Penalty rate leave is enabled
- Shift start time is left at the default value of 9:00 am
Work Pattern
- The work pattern is set for 7.6 hours, Tuesday - Saturday
- No shift times have been added
- The rostered shift overrule setting is disabled
Rostered Shifts
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There are rostered shifts for:
- Friday - 10 am - 6:30 pm
- Saturday - no shift
- Sunday - 3 pm - 11:30 pm
In the above situation, you will find that the leave application will come through having used the work pattern for all days.
The leave application will be paid as follows.
- Friday - Leave loading. Based on the work pattern day & 9:00 am as the default time in the award settings.
- Saturday - Saturday loading. Based on the work pattern day & 9:00 am as the default time in the award settings.
- Sunday - No leave. Based on the work pattern day.
SCENARIO B - Award Settings & Work Pattern Shift Times
We'll use the following example to look at how the above elements will work for penalty rate leave.
Kara is a full-time employee and has applied for 3 days of annual leave. From Friday to Sunday.
Please note the following configurations. The differences to the above scenario will be highlighted in Bold.
Award Settings
- Penalty rate leave is enabled
- Shift start time is left at the default value of 9:00 am
Work Pattern
- The work pattern is set for 7.6 hours, Tuesday - Saturday
- Shift times have been set to 3:00 pm for all work pattern days
- The rostered shift overrule setting is disabled
Rostered Shifts
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There are rostered shifts for:
- Friday - 10 am - 6:30 pm
- Saturday - no shift
- Sunday - 3 pm - 11:30 pm
In the above situation, you will find that the leave application will come through having used the work pattern for all days.
The leave application will be paid as follows.
- Friday - Penalty loading. Based on the work pattern day & shift time commencing at 3:00 pm. The difference in time from the previous example has pushed the shift into a Night Shift. In this instance, the night shift is at a higher rate than the leave loading.
- Saturday - Saturday loading. Based on the work pattern day & shift time commencing at 3:00 pm.
- Sunday - No leave. Based on the work pattern day.
SCENARIO C - Award Settings, Work Pattern Shift Times, & Rostered Shifts
We'll use the following example to look at how the above elements will work for penalty rate leave.
Kara is a full-time employee and has applied for 3 days of annual leave. From Friday to Sunday.
Please note the following configurations. The differences between the above scenarios will be highlighted in Bold.
Award Settings
- Penalty rate leave is enabled
- Shift start time is left at the default value of 9:00 am
Work Pattern
- The work pattern is set for 7.6 hours, Tuesday - Saturday.
- Shift times have been set to 3:00 pm for all work pattern days.
- The rostered shift overrule setting is enabled.
Rostered Shifts
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There are rostered shifts for:
- Friday - 10 am - 6:30 pm
- Saturday - no shift.
- Sunday - 3 pm - 11:30 pm
In the above situation, you will find that the leave application will come through having used the rostered shifts for Friday & Sunday, and the work pattern for Saturday.
The leave application will be paid as follows.
- Friday - Leave loading. Based on the rostered shift & its time. The difference in time from the previous example means that the shift is an afternoon shift, which has a penalty rate lower than the leave loading.
- Saturday - Saturday loading. Based on the work pattern day & shift time commencing at 3:00 pm. Even though there is no rostered shift, the work pattern will pull hours for this day.
- Sunday - Sunday loading. Based on the rostered shift & its time.