Accruing and Taking Annual Leave
In this section we will look at the annual leave entitlements and their respective take elements. New Zealand annual leave contains rules for two customary data absence types:
Hours Per Year - Entitlement Only.
Days Per Year - Pro rata and Entitlement.
The customary data entitlement elements use formulas that enable the system to determine the accrual hours/days per employee per year. The customary data take elements utilize different day formulas to return hours and days where required.
This is absence entitlement ANN LVE HRS. It has to determine the accrual rate per frequency and is based on a standard annual accrual of 152 hours and 38 standard weekly work hours (38 x 4 weeks leave per year = 152).
The absence element's entitlement value on the Calculation page is formula LVE FM ENTHPY. This formula pro rates the annual hours accrual for each employee because their standard hours (on JOB) may not be your organization's standard weekly work hours set in variable LVE VR ENT STD HRS on the Supporting Elements Override page of the absence entitlement. The standard annual entitlement — 152 — is set in variable LVE VR ENTHRS.
The LVE FM ENTHPY formula resolves as follows:
LVE FM ENTHPY = LVE FM WK STD HRS (Standard weekly hours for employee) / LVE VR ENT STD HRS (Entitlement standard weekly hours) × LVE VR ENTHRS (Annual entitlement)
35 ÷ 38 × 152 = 140
Note: The rounding rules take care of the fractions. Standard weekly hours for the employee are calculated by formula LVE FM WK STD HRS, which annualizes and deannualizes the employee's standard hours because the work period (on JOB) may not be weekly and the pro ration of the annual accrual is based on weekly hours.
The annualized accrual is deannualized by the absence calendar frequency when the calendar is run. The deannualized accrual adds to the absence entitlement's _ENT and _BAL accumulators.
Accumulators are stored by EMPL ID/EMPL_RCD. When a new accumulator instance is automatically created (for a new year to date period), the previous value of the _BAL accumulator is rounded and rolled over into the new year to date accumulator instance. The other accumulators are reset to zero.
The related absence take, ANN LVE H, decrements the absence units from the _BAL accumulator and stores them in the _TKE accumulator.
The units (hours) to decrement are resolved by the take's hours-based day formula, LVE FM HRS ABS PH which determines the number of hours to be subtracted from the leave entitlement, through the following process:
Checks to see if the day is a public holiday (public holidays are bypassed).
If the day is a public holiday, the formula does not resolve because there are no entitlement hours used or annual leave paid for that day.
Checks for scheduled (SCHED HRS) and partial hours (PARTIAL HOURS) and returns partial hours if there are any.
If there are no partial hours, the formula checks for a value in the User Defined 1 field on the Absence Event Input Detail page.
If there is a value (any value) it halves the scheduled hours.
If the day isn't a public holiday, and there are no partial hours and no halving, and there are scheduled hours, the formula returns the scheduled hours.
The units returned become the paid units (DAY COUNT PD) and unpaid units (DAY COUNT UNP) depending on available absence entitlement.
These units are mapped to the appropriate earnings elements, ANN and LWOP respectively, which the system processes as positive input when the payroll calendar is run.
Note: Any value in the User Defined 1 field will halve the hours taken. You can use this to take twice as long a leave period at half hours per day, which is effectively half pay per day.
The day formula includes a check to see if you have overridden forecasted leave duration (in hours) in the User Defined 3 field on the take's Calculation page. If you have, that duration represents the whole leave period so the system stops using the day count formula to determine the leave duration in hours.
The delivered customary annual leave rules for entitlement and take are responsible for determining the correct annual leave accrual, and rules for payment.
There are two delivered entitlement rules: ANN PRO DAYS and ANN ENT DAYS. The prorata entitlement (ANN PRO DAYS) determines the accrual rate (20 days), and the accrual frequency (Annual). The prorata value of 20, is deannualized according to the calendar frequency for each employee (for example, 52–weekly). The entitlement (ANN ENT DAYS) is responsible for storing the accrual once it has been rolled over from prorata on the anniversary date, using formula, LVE FM ENT ANN.
Formula LVE FM ENT ANN looks for an entitlement anniversary date in the period. Once it verifies that the anniversary date falls in the current period, the prorata value stored in ANN PRO DAYS will be moved to ANN ENT DAYS. The formula will then calculate which portion of the current accrual is entitlement and which portion is prorata. (In the case where the anniversary falls midway through the pay period, and the accrual needs to be split between prorata and entitlement). This portion is calculated by looking at the number of days from the period begin date to the employees anniversary date. The formula will then subtract any prorata value for the current month from entitlement and place it into pro rata.
Note: When an employee works less than 5 days per week and, therefore, accrues less than 20 days per year, you can enter an employee level override on the Entitlement/Take Assignment page to change the entitlement unit value, from 20 to 12 for example for an employee working a 4 day week.
There is one delivered absence take; ANN LVE. This absence take is linked to both the ANN PRO DAYS and ANN ENT DAYS entitlement elements. When the absence process is run, the system will retrieve the absence event, and reference the absence take to start the resolution of the day formula.
The units (days) to decrement is resolved by day formula LVE FM DYS ABS PH, which:
Checks to see if the day is a public holiday. If it is, in does nothing further because there will be no entitlement hours used or annual leave paid for that day.
Checks for scheduled and partial hours, and if there are partial hours, the system returns the fraction of the day the hour represents and then rounds them. Partial Hours / Scheduled Hours = Fraction of day absent 2hrs / 8hrs =.25
The formula includes variable LVE VR DYS ABSENT, which holds the cumulative value of the results of the day formula as it resolves for each day in the leave period. It starts as 0, so in our example, its value after the resolution for Day 1 would be 0 + 0.25 = 0.25.
If there are no partial hours, it checks for a decimal value in the User Defined 1 field on the Absence Event Input Detail page. If there is a value—any value—it adds 0.5 to LVE VR DYS ABSENT. Assuming this is the case, in our example Day 1 + Day 2 = 0.75.
If it isn't public holiday, there are no partial hours or halving, but there are scheduled hours, then the formula adds 1 to LVE VR DYS ABSENT.
Note: The day formula LVE FM DYS UNP determines the part paid days (if applicable) for the take. If the absence date is the same as the partially paid leave date (LVE VR PRT PD DT) and the part paid days for a take (LVE VR PD PRT DYS) are greater than 0, variable LVE VR PD PRT DYS is subtracted from the result of formula LVE FM DYS ABS PH.
The units returned become the paid units (DAY COUNT PD) and unpaid units (DAY COUNT UNP) depending on available absence entitlement days and pro rata days.
This absence take generates the positive input for earnings ANN LVE and LWOP. The units for these earnings are formulas LVE FM DY DCP HRS and LVE FM DY DCUP HRS respectively. The formulas multiply the DAY COUNT PD and DAY COUNT UNP by the scheduled hours, so the system can pay the leave in hours.
Note: Any value in the decimal field will halve the hours taken. You can use this to take twice as long a leave period at half hours per day which is effectively half pay per day.
Anything but a partial day returns either 0.5 or 1, because a day can only be a partial hours fraction or a half day or a full day.