Top-up and Recalculation of Leave Accruals

Description

Previously, to facilitate the accrual of leave on leave that had been paid in the same pay batch, in the pay batch process the Leave Payments pay batch stage preceded the Leave Accrual pay batch stage. That catered for leave types that accrue when a payee takes leave, not just when a payee works. For example, a payee may accrue hours towards annual holidays when they take leave. To facilitate this, leave accrual rules for a leave type can be configured such that pay codes on which the leave accrues include the pay codes that the leave is also paid against when the leave is taken.

In this release, the order of the Leave Payments and Leave Accrual pay batch stages has been switched. Because of this, the Leave Payments pay batch stage has been enhanced to automatically top-up or recalculate the accrual of leave that initially occurred at the Leave Accrual stage.

The switching of the order of the Leave Payments and Leave Accruals pay batch stages is to allow for a future enhancement whereby leave that has accrued and transferred into entitlement in a pay batch can be used to pay leave taken in the same pay batch. However, in this release, leave that is accrued and transferred into entitlement in a pay batch is not available to used to pay leave taken until the proceeding pay batch.

Top-up of Accrual In Batch

A top-up of leave accrual occurs at the Leave Payments pay batch stage if:

a leave type has been paid using a pay code that is of the type Leave
the pay code itself or the pay code type of Leave is selected as an accrual pay code on a leave accrual rule and:
- that accrual rule belongs to a leave type to which the payee is entitled based on their employment type
- the accrual rule is not subject to a Worked Condition or a Continuous Employment Condition
- based on that accrual rule, the payee has met the conditions for accruing the leave in the current pay batch.

Where all the abovementioned conditions apply, the system must accrue the additional portion of leave that should be accrued on the leave payment and must automatically top-up/upwardly adjust the accrual in batch value to factor in the additional accrual on the leave payment.

For example, consider a scenario where a payee is entitled to Annual Leave, which is configured to accrue at a rate of 7.96% of hours worked against the pay codes Ordinary Time and Annual Leave. The applicable accrual rule is not subject to a Worked Condition or a Continuous Employment Condition.

During the current pay period the payee worked 30.4 hours ordinary time and took 7.6 hours annual leave and has no other outstanding payments from prior periods.

Therefore, when pay is processed for the current period the payee will accrue the following towards Annual Leave at the Accrue Leave stage:

30.4 x 7.96% = 2.41984

So the Accrual in Batch for Annual Leave, as at the Accrue Leave stage, will be 2.41984 hours.

At the Leave Payments stage, the 7.6 hours of leave taken is then paid against the pay code Annual Leave. Because the payment pay code is also defined as an accrual pay code, the accrual on the leave payment must also be calculated as follows:

7.6 hrs x 7.96% = 0.60496 hrs

Therefore, the accrual must be topped up by an additional 0.60496 hours, taking the Accrual in Batch for Annual Leave, as at the Accrue Leave stage, to 3.0248 hours.

Recalculation of Accrual In Batch

A recalculation of leave accrual occurs at the Leave Payments pay batch stage if:

a leave type has been paid using a pay code that is of the type Leave
the pay code itself or the pay code type of Leave is selected as an accrual pay code on a leave accrual rule and:
- that accrual rule belongs to a leave type to which the payee is entitled based on their employment type
- the accrual rule did not trigger an accrual at the Accrue Leave stage in the current pay batch due to the accrual conditions not being met initially at the Accrue Leave stage.

To understand how the recalculation process works, consider a scenario where a payee is entitled to Annual Leave and the leave type has one accrual rule that is configured to accrue 7.96% of hours on the pay codes Ordinary Time and Annual Leave.

If the only payment the payee has outstanding to pay in the current period is 8 hours of Annual Leave, and assuming no other outstanding payments for prior periods, at the Accrue Leave stage of the pay batch for the current period the payee would not accrue any leave, as there are no payments on which to accrue at that stage. However, once the batch is progressed to the Leave Payments stage, the payee is paid 8 hours, for the leave taken in the current period, against the pay code of Annual Leave. At that point, the payee meets the conditions of the accrual rule and would therefore accrue the following:

8 hrs x 7.96% = 0.63 hrs.

The following applies to the top-up/recalculation of accrual process at the Leave Payments stage:

The process does not apply if the original accrual in the batch is manually adjusted at the Accrue Leave stage (only applicable in the top-up scenario).
Any additional accrual added to a payee’s accrual balance as a result of this top-up/recalculation process is not transferred into entitlement in the current pay batch/taken into account when determining the entitlement balance available to pay leave in the current pay batch. That is because the leave payment will have already happened prior to the top-up/recalculation being triggered.

Hours/units of leave accrued based on leave taken on a given day cannot be used to pay leave taken on that same day. For example, if a payee’s leave entitlement is 7.5 hours prior to accrual in the current pay batch, the payee has taken 7.6 hours leave on a specific date in the current batch and, also in the current batch, the payee accrues a further 0.1 hours on the payment for the leave taken, if the payment of the leave is subject to a Sufficient entitlement balance condition, the system will only pay 7.5 hours. The remaining 0.1 hours accrual will be available to pay leave taken on any subsequent date, assuming the conditions for transfer from accrual to entitlement are met.

Multiple Pay Batches Processed in the Same Period

Each time a pay batch is processed, at the Leave Accrual pay batch stage the system negates leave accrued in the prior pay batch for the same pay period and recalculates leave accruals from scratch based on the adjusted earnings and hours worked for that period. The exceptions to this are:

If the leave accrual is to be topped up - in this case on moving the pay batch to the Leave Accrual stage there is no negation of previous accruals because the top-up is factored for any adjustment that is required to the accrual.
If the leave accrual is to be reprocessed - in this case on moving the pay batch to the Leave Accrual stage there previous accrual is negated but the negated values become zero values on moving the pay batch to the Leave Payments stage because the leave accrual will be completely reprocessed at that point.

Cancelling of Leave Payments

At the Leave Payments pay batch stage, leave payments that have been paid automatically because of leave taken can be cancelled manually if they have been paid in error. If there has been a top-up or re-calculation of accrual because of a leave payment that is then cancelled manually, the cancelling of the leave payment does not reverse the additional accrual that resulted from the top-up or re-calculation. If necessary, the reversal of the accrual that resulted from the top-up or re-calculation can only be reversed in a sub-sequent pay batch.

Benefits

This enhancement allows leave to be accrued on leave payments despite the order of the Leave Accruals and Leave Payments pay batch stages being reversed in this release. This ensures that if a payee is entitled to accrue leave when leave is taken, the system can still accrue that leave accordingly.

Configuration

No configuration required.