Changing Work Patterns

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The Holidays Act specifies that employees are entitled to a minimum of 4 weeks leave each year, based on their current work patterns. If their work pattern changes their situation must be reviewed and their annual holidays entitlement must be worked out based on the new work pattern.

There's more information on MBIE's website:
https://www.employment.govt.nz/leave-and-holidays/annual-holidays/annual-holidays-entitlements/

PayHero will handle this automatically,  but FlexiTime requires a manual recalculation.

FlexiTime accrues annual leave each time an employee is paid, based on their work pattern at the time. That means that the employee will have accrued annual leave hours based on their old work pattern and when they pass their next anniversary they might not have the correct entitlement.

To correct that, you should recalculate the employee's Annual Leave balances to match their new work pattern.

If their old work pattern has been consistent throughout their employment you can just divide their Annual Leave Due, Annual Leave Accrued and Annual Leave Taken balances by their old hours per week, to get a weekly balance,  then multiply that weekly balance by their new hours per week to get their new balances in hours.

For example if their current Annual Leave Due is 73 hours and they are changing their work pattern from 35 hours per week to 40 hours per week,  then their new Annual Leave Due should be 73 hours / 35 hours per week = 2.0857 weeks * 40 hours per week = 83.43 hours.

Change the employee's Accrue Leave Based On setting to match their new work pattern so that they'll accrue correctly going forward.

Edit the employee's Pay Records tab and update the Average Rate Hours for each pay from their old work pattern to their new work pattern,  (e.g. in the example above it would change from 35 hours per week to 40).  This adjustment will recalculate their 12 month average pay rate the next time they are paid. 

 

Varying work patterns

If the employee's work pattern has varied over their employment,  the recalculation method above might not be appropriate.  In some cases you may need to recalculate their entitlements manually. 

First,  work out how many full years you have employed this person.  Their total leave entitlement is four weeks per year,  so their entitlement will be 4 weeks multiplied by the number of full years. 

Then work out how many weeks of annual leave they have taken up to the date that they passed their last anniversary. 

Their leave entitlement as at their last anniversary is 4 weeks per year multiplied by the number of years of employment less the total weeks that they have taken.   Multiply this total by their new hours per week to get their Annual Leave Due as at last anniversary. 

Calculate the total number of weeks annual leave that they've taken since they passed their most recent anniversary.   Multiply this by their new hours per week to get their Annual Leave Taken since their last anniversary. 

Calculate their accrual for the current year by counting the number of weeks that they have been paid since they passed their last anniversary.  Multiply this total number of weeks by their new hours per week then multiply this total by four and divide by 52.

For example if they've been paid for 12 weeks since their last anniversary and their new work pattern is 40 hours per week,  then their Annual Leave Accrued since last anniversary should be 12 weeks * 40 hours per week *4/52 = 36.92 hours. 


Change the employee's Accrue Leave Based On setting to match their new work pattern so that they'll accrue correctly going forward.

Edit the employee's Pay Records tab and update the Average Rate Hours for each pay from their old work pattern to their new work pattern,  (e.g. in the example above it would change from 35 hours per week to 40).  This adjustment will recalculate their 12 month average pay rate the next time they are paid. 

 

If you need help with this,  please contact FlexiTime Support

 

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