Employee Leave

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FlexiTime provides standard Pay Codes for recording employee Leave. This section describes how FlexiTime manages Leave.

To record leave taken, use the appropriate pay code either on the timesheet or on the Add Pay screen. The impact of Leave as it is accumulated and taken is shown on the Employee Leave Details screen, the Add Pay screen and on the employee’s pay details.

For more information about New Zealand leave entitlements and regulations, please see the MBIE website.

To see an employee's leave history, use the Leave History Report (Payroll > Reports > Leave Reports).

 

Annual Leave

Under the Holidays Act 2003 all employees are entitled to a minimum of four weeks annual holidays.

On each anniversary of the date of commencing employment on or after 1 April 2007, the employee is entitled to four weeks paid annual holidays. The leave can be taken at any time agreed between the employer and the employee. Employees must be given the opportunity to take at least two of the four weeks leave in a continuous period, if they wish to do so.

Payment for annual holidays is at the greater of the ordinary weekly pay at the time the holiday is taken or the employee's average weekly earnings over the 12-month period before the annual holiday is taken.

During the first year of employment, three circumstances can arise that require the calculation of the payment due for annual holidays:

  • The employee may seek, and the employer may approve, the taking of annual holidays in advance.
  • The employer may have a regular annual closedown of the workplace.
  • The employee may resign or the employer may terminate the employment.

 

The Employee Leave Details screen defines and maintains the leave entitlement for an employee.

For new employees, FlexiTime will populate most of these fields with default values. If you are migrating existing employees to FlexiTime, you will need to enter this information from your previous payroll system.

 

Next Holiday Anniversary

For new employees, FlexiTime will set this to 12 months after the Employment Start Date.

If migrating existing employees to FlexiTime, this must be the next 12 month anniversary of the start of employment.

FlexiTime will automatically update this to the next 12 month anniversary, when the current anniversary date is reached.

Holiday Pay %

Enter 8% to define the equivalent of 8% of the employee’s annual pay to be holiday pay. For a fulltime employee, this equates to four weeks annual leave.

Normal Hours per Week

Enter the normal working hours per week for the employee. This is used to determine leave accruals and average / ordinary rates. For more details about how this is used see this article.

Hours Worked

Select if the employee does not work a regular number of hours per week.  Leave will be accrued based on the actual hours worked. 

Holiday Pay Accrued since <previous anniversary>

This will be calculated automatically based the gross earnings and Holiday Pay %.

Holidays Paid (Pay As You Go)

If the employee is paid holiday pay (pay code HP) in each pay, the amount paid to date is shown here.

Annual Leave due as at <previous anniversary>

This shows outstanding Annual Leave due in Hours as at the last 12 month anniversary of start of employment.

Annual Leave taken since <previous anniversary>

This shows Annual Leave taken in Hours by the employee since the last 12 month anniversary of start of employment.

Current Annual Leave Due

Annual Leave Due as at last anniversary less Annual Leave Taken since last anniversary

Annual Leave Accrued in Advance

Annual Leave accrued since the last anniversary. At the next employment anniversary this will add to the Annual Leave Due. If the employee finishes employment they will not receive payment for Annual Leave Accrued in Advance, this will be paid as Holiday Pay Accrued.

The Accrual of leave is based on the Holiday Pay % and the Normal Hours per Week or if the Normal Hours per Week is zero then from actual hours entered for the employee for pay codes with a unit of hours.

Annual Leave Available

Current Annual Leave Due plus Annual Leave Accrued in Advance. This is an indication of how much leave the employee can take if the employer allows leave to be taken in advance.

 

 

Pay-as-you-go Holiday Pay

The Holidays Act allows “pay-as-you-go” holiday pay arrangements in two circumstances only. These are:

  • Employees on genuine fixed-term agreements of less than 12 months - this reflects the fact that these employees are not expected to reach the date on which they would normally qualify for annual holidays; and
  • Employees with a work pattern that is intermittent or irregular (genuine casual work) – this reflects the fact that the employee's employment pattern may mean it is not meaningful or practicable to attempt to provide them with four weeks paid annual holidays.

 

Employees paid on a pay-as-you-go basis do not later become entitled to annual holidays.

Add the Holiday Pay (HP) pay code to an employee’s default pay codes on Setup | Maintain Employee | Edit Employee | Default Pay Codes to include their Holiday Pay in their regular pay.

 

Sick Leave

For most employees there is a minimum provision of five days' paid sick leave a year after the first six months of continuous employment and an additional five days' paid sick leave after each subsequent 12 month period.

For more information about Sick Leave,  please see the MBIE website.

Unused sick leave is automatically carried over. For example, if someone uses only one day's sick leave from the five-day entitlement in a 12-month period, he or she may carry over the other four days, so in the next 12-month period the total entitlement is nine days' sick leave. The maximum accumulation under the Holidays Act 2003 is 20 days' leave, although employment agreements can provide either or both more generous sick leave and accumulation.

Accumulated sick leave cannot normally be exchanged for cash nor form part of any final payment to the employee on resignation or termination, unless the employment agreement requires this.

Payment for sick leave should be at the rate the employee would ordinarily be paid on the day leave is taken (relevant daily pay) or their average daily pay where applicable. 

Please refer to this article for examples of sick leave payment. 

 

The Sick and Alternate Leave fields are held in hours and days. Days are the most important balance and hours are held here for information only.

 

Enter the following information on the Employee Leave Details screen:

 

 

Annual Sick Leave Entitlement

The annual allocation of sick leave. The statutory requirement is 5 days. If the employee’s employment agreement has more than 5 days of sick leave per year, enter the number of sick days agreed. 

Maximum Sick Leave

Entitlement

Unused sick leave can be accrued up to a maximum. The maximum accumulation under the Holidays Act is 20 days.

Next Sick Leave Anniversary

FlexiTime will automatically derive this date from the Employment Start Date, and the current date. You can override this date if required.

If the employee has been employed for less than six months, the next anniversary will be six months from the Employment Start Date.

If the employee has been employed for more than six months, the next sick leave anniversary will be the next twelve month anniversary of the initial six month anniversary of employment.

When the Sick Leave Anniversary Date is reached, FlexiTime will add 12 months to calculate the next Sick Leave Anniversary Date.

Sick Leave Due

Remaining sick leave allocation due. FlexiTime will update this amount when a Pay which includes the Sick Leave pay code is finalised for an employee.

If adding an existing employee to FlexiTime enter their current outstanding leave entitlement.

 

When an employee takes Sick Leave, they can either enter the Sick Leave pay code on their timesheet, or the Payroll Administrator can manually add the Sick Leave pay code to the employee’s Pay. The Add Pay screen for each employee will show the updated Sick Leave Due.

 

Bereavement Leave

 After six months' employment an employee is entitled to three days' paid bereavement leave on the death of certain immediate family members. The employee is also entitled to a day of bereavement leave on the death of any other person, where the employer accepts that bereavement has occurred.

Use the FlexiTime BER pay code to record time as Bereavement Leave.

 

Public Holidays

All employees (including casual employees, part-timers and employees on fixed-term agreements) are entitled to 11 paid public holidays if they fall on days the employee would normally work. The employment agreement can provide for alternative days, but not for less than 11 paid public holidays where these would otherwise be working days.

Where an employee works on a public holiday, they must be paid at least time and a half for the time they work. If it is a day when they would normally have worked, they must also receive a whole day’s Alternative Leave at a later date.

If an employee does not work on a public holiday, use the STAT (Public Holiday) pay code to record their normal hours per day for the holiday. FlexiTime will pay the employee their normal daily pay.

If an employee does work on a public holiday, use the ORD1.5 pay code to pay them time and a half for the hours worked that day. If you have an arrangement with the employee to pay more than time and a half for working on a public holiday, use an appropriate pay code.

Refer to the MBIE website for more information about public holiday entitlements.

If the employee pay is derived from time sheets two work categories have been created to make paying employees on public holidays easier.  The category under Standard Work called Public Holidays Worked will automatically create pay for hours worked at time and a half. Additionally it will credit the employee’s Alternate Leave balance with the Normal Hours per Day for the employee, or if Normal Hours per Day is zero then with the number of hours worked on the public holiday.

The other work category used for public holidays is under the Employee Leave work and is called Public Holiday. This work category creates a STAT pay code in the pay for the employee and is paid at the normal rate.

New Zealand Public Holiday dates.

 

Alternative Leave

An Employee can accumulate Alternative Leave by working on a Public Holiday.

Alternate Leave can be automatically generated by FlexiTime by recording time worked on a public holiday in the employee time sheet against a work category which has the Create Time in Lieu flag checked (Maintain Work | Category). In FlexiTime we have created a default work item called Standard Work which has a category for Public Holidays Worked, when entering time against this work category FlexiTime will automatically pay the employee time and a half for the time worked on the public holiday and also credit the employee with an alternate leave day for each day worked.

To manually accumulate Alternative Leave, use the Alternative Holiday Accrued pay code to increment the employee’s Alternative Leave Due in the employee pay. When adding the pay code to an employee pay you will be asked for the number of days to accrue and the number of hours. The number of days is the most important accrual amount, it is a regulatory requirement to keep a record of the number of days of alternative leave accrued for an employee. The number of hours accrued can be used in reporting to provide a dollar value for the accrued alternative leave.

When an employee takes Alternative Leave, use the Alternative Holiday Taken pay code to record the number of days and pay the hours of Alternative Leave taken. You should pay the employee the relevant daily pay for the day of alternative leave taken, that is the number of hours the employee would have worked if they had worked on the day that leave is taken. If the employee works different hours each day and it is difficult to determine the number of hours they would have worked on a given day you can use the Use Average Daily Pay button. This will calculate the average number of hours the employee has worked per day over the previous year, based on the total hours worked and the number of days worked. It also calculates the average hourly pay rate over the previous 12 months. The average hours multiplied by the average hourly rate gives the average daily rate.

If the alternative holiday is not taken within 12 months of it accruing, the employer can direct the employee to take the alternative holiday. Alternatively at that time the employee may ask the employer to make a payment instead of having the holiday off. If the employer agrees to make a payment the level of payment is a matter of agreement between the employer and employee. To record the payment in FlexiTime, use the LIEU pay code and enter the number of hours of leave to be paid and the appropriate hourly rate to be paid.

If any alternative holidays are outstanding at the time of resignation or termination, these are paid out at the rate of pay for the employee's last day of work, i.e. their relevant daily pay.

 

Unpaid Leave

Please see the following articles for more information on Unpaid Leave or Parental Leave.

 

Final Pay

Please see the Final Pay article for more information on leave calculations when doing a final pay for an employee.

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