Leave in Recruitment Companies

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NZ has one of the most complex legislative frameworks for handling employee leave. This article has some ideas for how to handle employee leave taken by recruitment company candidates as opposed to internal staff. There is no definitive set-up - different companies have varying approaches to handling leave. 

 

Contractors have no leave - how do I disable leave?

If you have temps and contractors we generally suggest using two FlexiTime accounts to separate them out since they have a few differences in their processing.

Of course contractors are very simple from a leave point of view - they have none. Your FlexiTime account will have been set up so that the Employee Leave work is closed and no leave balances will print on the pay slips / remittance advices.

When adding a contractor, set their Holiday Pay % and Annual Sick Leave Entitlement to 0.

 

Holiday Pay As You Go?

One way of avoiding the complexities of holiday pay and annual leave is to pay the 8% holiday pay as you go. This article explains how to set this up. However there are legal implications. MBIE have good information on paying out 8% holiday pay, and more information on what constitutes a fixed term contract. You should also consider consulting an employment law specialist if taking this approach.

 

Who is going to record leave in FlexiTime?

Is leave going to be entered by the candidates, or do you want all leave to be checked and approved by back office admin staff first? By default any user recording their time can enter time entries for leave using the Employee leave work. If you want to make sure only admin staff can add leave then edit the Employee Leave work and tick Admin Only.

If there are some leave types that you are happy for employees to enter then you can create a separate Employee Leave work item that is not set as admin only and only has categories for those leave types you want the candidates to access.

If the candidate is trying to take more leave than they are entitled to, a pay warning will be generated when you create the pay. You will then need to revoke the approval, remove or change the leave entry, then re-approve. You can also get an overview of leave being requested by looking at the Timesheets -> Summary tab before running the pay.

 

What rate will leave be paid out at?

For regular employees leave rates are relatively simple - they have their own static normal rate recorded on the employee details. For temps however the rate can vary from job to job. To pick rates up from jobs there are two changes to your set-up:

The leave pay codes will have been set to be based on the Job Pay Rate.

 

The Employee Leave work will have been set up as follows:

This set-up means that when leave is entered you also need to select the current job from which the standard leave rates will be picked up from.

 

Who will approve the leave?

Because the leave time entry is attached to a job, it will be included in the approval email sent to the job approver. Generally this leave will not be on-charged to the client - you might consider changing the name of the Employee Leave work to make this more obvious, e.g. 'Leave (non-charged)'.

If you are restricting recording leave to admin users then it's best to get the leave entered into FlexiTime as early as possible. If the week has already been approved before the leave has been entered you will need to revoke the approval and either re-request approval from the client or approve the time as the admin user.

 

How do we handle Public Holidays?

FlexiTime has the ability to automate public holiday processing. While this can greatly simplify public holidays, in some situations it may be better to use a more manual approach.

This support centre article describes how FlexiTime determines if a public holiday is an Otherwise Working Day (OWD) for an employee - should they be paid if they don't work and should they accrue and alternative day if they do work.

Employees not working on a public holiday

If FlexiTime detects an OWD for an employee on a public holiday a line for the holiday will be automatically added into their pay. This line will pay them the average daily pay - their average earnings for the last 12 months.

Some companies prefer not to user the average daily rate for the employee, but instead want to pay them a fixed number of hours at their current rate - their relevant daily pay. FlexiTime cannot determine this without being provided extra information. There are two options:

1) Under the employee on the Employment tab enter a number of Hours Per Day and a Normal Rate.

Where these have been entered they will be used rather than the average daily rate. The downside of this is that as the candidate changes assignment these extra fields need to be maintained.

2) Alternatively put in timesheet entries for the public holiday. You can use Employee Leave with the Public Holiday category. In this case the hours paid out will be the duration of the time entry, and it will get paid out at the rate of the job chosen. As mentioned above, we recommend getting these leave entries put in well ahead of time.

Employees working on a public holiday

Occasionally your candidates may be required to work on a public holiday. FlexiTime can be set up to automatically pay time and a half for this (see this article). 

Using this approach, however, will only on-charge the client at the standard rate. More often than not the the time and a half payment needs to be on-charged to the client.

To charge the higher rate you first need to set up a charge type with a rate multiplier. See this article.

You then need to link this new charge type to the work using a work category. Create work categories against the work for 'Standard Work' and 'Working on a Public Holiday'. On the second category you can select the time and a half pay code and the new x1.5 charge type. Additionally tick Accrue Alternate Leave.

You can then use this category on timesheets to pay the employee x1.5, accrue the alternative day and charge the client x1.5, all from the single time entry.

 

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