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How to set up Time Off Accruals and Policies

 

Summary

The Time Off Accruals and Policies feature provides the following capabilities:

  1. Accrue time off balance hours to workers.
  2. Apply rollover rules ("Use it or lose it").
  3. Enforce zero or maximum negative balance.
  4. Set hire date or duration conditions, alleviating the need to monitor worker hire date anniversaries every pay period.

These capabilities will be explained in detail in this article below.

Prerequisites

Before you can use this feature fully, you will need to first set up some other features:

  • Time Off - Time Off Accrual is an add-on to our more basic Time Off feature, which allows you to enter Time Off for workers, as well as optionally allow workers to submit Time Off requests. For more information on setting up basic Time Off, see this Help Article: https://support.fareclock.com/hc/en-us/articles/360021659594-Time-Off
  • Pay Runs - If you just want to manually set each worker's accrual hours and enforce a zero or maximum negative, then you don't need to set up Pay Runs. But if you want to enable auto-accrual and rollover policies, then you'll need to create and finalize a Pay Run each pay period which will apply those policies. Check out the following Help Article for how to use our Pay Run feature: https://support.fareclock.com/hc/en-us/articles/360056736914-How-to-generate-Pay-Runs

Set up

To enable Time Off Accrual, go in the Console to Settings => Time Off, and check the box "Track accruals".

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Next, click on the Policies link in the blue ribbon near the top of the page. You should see the following:

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A Time Off Entitlement links directly to a Time Off Code. If you haven't yet created any Time Codes, then you'll want to refer to the Prerequisites section above regarding setting up the basic Time Off feature. In the Entitlement you'll be able to specify all your rules, including accrual, rollover, and balance enforcement. You can also add hire date conditions to your Entitlements, e.g., vacation only allowed for people who worked at least 6 months, or different vacation accrual levels based on length of employment.

The Time Off Policy contains one more Entitlements, and this Policy is what you assign to workers. All that and more will be explained as we continue with set up below.

First, click on the button "+ New Time Off Entitlement". A form will appear on the right side of the screen as follows:

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We'll go over each of these settings.

First you'll need to give it a Name and match it with a Time Off Code.

Next you'll want to choose an Accrual Type.

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  • Manual - Time Off will not auto-accrue. If you want to reward a worker with a Time Off, you'll need to adjust that worker's Time Off Balance, which will be discussed later in this article.
  • Hours Worked - Time Off will accrue based on the number of hours worked. If you choose that option, then you'll be able to configure the Accrual rate per hour worked. For example, if a worker should accrue 1 hour of Time Off for every 40 hours worked, then you'll want to set the Accrual rate per hour worked to 1.5 minutes. By default, Time Off itself does not contribute toward the hours worked for accruing more Time Off. But there is a checkbox option to make Paid Time Off contribute. For example, some organizations have a policy that Paid Vacation contributes to the regular accrual. Unpaid Time Off never contributes to accrual regardless of how this setting is configured.
  • Pay Period - Time Off will accrue per Pay Period. If you choose that option, then you'll be able to configure Accrual rate per pay period. For example, if a worker earns 80 hours of Time Off per year and the pay period is weekly, then you'll want to set the Accrual rate per pay period to 92 minutes.
  • Year - Time Off will accrue in one lump sum per Year. If you choose that option, then you'll be able to configure Accrual rate per year. You'll also be able to configure the annual Accrual Date, e.g., January 1. If the Accrual Date is left blank, then the accrual will take place on the worker's Hire Date anniversary.

After you've configured the Accrual, you'll next want to configure the Rollover settings.

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There are three options:

  • Carry over all hours accrued - This means Time Off hours will accrue without any limit enforced. For example, if a worker never uses their Time Off, it will just continue to accrue over time.
  • Pay period - If this option is selected, then you'll also need to set the Rollover maximum hours. Each time the Pay Run a pay period is finalized, this maximum hours will be enforced. For example, if Rollover maximum hours is set to 80 hours, then each pay period that limit will be enforced so that the total accrued hours can never exceed 80 hours.
  • Year - This option is similar to the Pay period option, except the maximum hours is enforced once per year. If this option is selected, then you'll need to configure both the Rollover maximum hours, as well as a Rollover date. For example, the Rollover date might be January 1, if you want to allow workers to carry over up to 1 year's worth of accrued Time Off. If the Rollover date is left blank, then the worker's Hire Date anniversary will be used. If neither date is specified, then it will default to Carry over all hours accrued.

Next, you'll be able to specify a Maximum negative balance:

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By default, a new Entitlement will require at least a zero negative balance. That means a worker's balance can never go under 0. So if they don't have enough accrued hours to satisfy a Time Off Request, or if an admin tried to enter Time Off when there is not enough balance, then it will be rejected. If you'd like to allow workers to "borrow" some amount of Time Off ahead of time before they've accrued it, then you can set this Maximum negative balance to the number of hours you want to allow them to borrow. In the Using Time Off section below, we'll discuss exactly how this Maximum negative balance is enforced.

Finally, you'll be able to specify the Hire date conditions.

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There are two varieties of conditions you can specify:

  • Hire date - Specifies an absolute date range of hire dates for which this entitlement will apply. This type allows you to grandfather older policies, and introduce new policies for newer workers.
  • Hire duration - Specifies how long a worker must have been employed in order for this entitlement to apply. For example, you might create an entitlement that only applies for workers who have been employed for at least 6 months. This value takes effect at the beginning of the pay period. For example, if the Shortest hire duration is 6 months, and the worker is hired on March 1, then this entitlement will take place on the first pay period that starts at least 6 months after the hire date, i.e., September 1. In such a case, if there is a weekly pay period August 28 - September 3, then this entitlement first be applied in the following pay period starting September 4, since that is the first pay period which starts on or after September 1.

If you don't want any hire date conditions for this entitlement, then just leave these conditions blank. Note that in general, a Time Off Policy may only contain one Entitlement per Time Off Code. However, if you use Hire date conditions on entitlements, then a Policy may contain multiple Entitlements per Time Off Code as long as the Hire date conditions do not overlap. This feature allows you to configure one simple policy for all workers and not have to worry about re-assigning workers' policies each pay period based on their hire date.

After you've set up your Entitlements, then you'll want to create one or more Time Off Policies. To do so, click on "+ New Time Off Policy". Then, all you'll need to do is give the Policy a name and select the Entitlements for that policy:

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After setting up your policies, all you have left to do is assign your workers their appropriate Time Off Policy. To do so, go to Settings => Employees, select each worker, and in the Extra Information section, assign the Time Off Policy to that worker:

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View or update Time Off Balance

You can view or update each worker's Time Off Balance by opening that worker's profile under Settings => Users, and going to the Time Off Balances section. There you'll see the current balance for each Time Off Code for which there is an Entitlement of the worker's Time Off Policy.

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To update the balance or to view the audit log of changes, click on the edit icon in the Ledger column.

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If you'd like to adjust the balance, click on the "+ Add" button, specify the number of hours to add or subtract. To subtract, put a "-" minus sign before the hours. You can also optionally add a memo note. Then click "Update" to save. All changes to the balance are saved to this ledger list for audit purposes, whether if an admin changes the balance, or time off is used, or time off is auto-accrued.

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The balance will automatically include all time off used up to the current day. Once per day, Fareclock automatically posts all time off entries for that day to this ledger. Future submitted time off is not posted to the ledger, unless a Pay Run is created for the future pay period containing that time off. Past time off saved after the fact will immediately post to the ledger. This balance never includes pending Time Off Requests that haven't been approved yet. Once approved, a ledger may be posted according to the procedure just described.

When the Pay Run is finalized, then the auto-accrual and rollover rules will be applied to the balance and posted to the ledger. The Memo column of the ledger entry will note this auto-accrual.

Using Time Off

For basic information about how to enter or request time off, see our Help Article on Time Off:

https://support.fareclock.com/hc/en-us/articles/360021659594-Time-Off

When entering Time Off or approving a Time Off Request, or when a worker submits a Time Off Request in the mobile app, Fareclock will enforce the Time Off Policy's maximum negative balance. If the balance is exceeded, then the time off will be rejected with an error message, as follows:

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The Time Off engine does smart validation of any changes. It will gather all existing Time Off entries and pending requests that have not yet been posted to the ledger, and walk through every past and future pay period, considering the accrual and rollover rules for each pay period along with the time off used during that period. If during any pay period the negative maximum balance is exceeded, then the change will be rejected.

For example, suppose a worker has a zero current balance, and requests time off 6 months from now. If 6 months from now, enough time off will have accrued to use that time off, then the time off requested will be accepted. Conversely, if the worker already has time off scheduled 6 months from now, and now also requests some time off for the current week. If that will cause not enough time off to be remaining for the scheduled time off in 6 months, even though right now the worker has enough balance to use the time off in the current week, then the new time off request will be rejected.

Pay Runs

As mentioned earlier, auto-accrual and rollover rules are applied when the Pay Run for the pay period is generated and finalized. If the Pay Run is not finalized, then these rules will not be applied. For more information on Pay Runs, check out our Help Article on the subject:

https://support.fareclock.com/hc/en-us/articles/360056736914-How-to-generate-Pay-Runs

The Pay Run contains a Worker Pay Summary for each worker. That Summary details Time Off used, accrued, and the balance for each Time Off Code:

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You can print or export the Pay Stubs, which will also contain this information.

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