Time off policies can be configured with accruals, which simply means as time passes, the employee accumulates more time off, and that time off is placed in a bank. The PTO module is also designed to prorate accruals for employees who are not accrual eligible for their entire first accrual period.
See the topics below for information on accrual eligibility is determined and how accruals are calculated.
An employee is considered accrual eligible on their date of hire or upon the expiration of the policy probationary period (configured in such a way that employees do NOT accrue time during their probationary period), whichever is the latter.
Also consider when implementing the PTO module, existing employees are not accrual eligible until the policy start date in the current year. The system will not retroactively populate accruals further back that the most recent instance of the policy start date.
Note the following when probationary periods are configured on a policy:
- Employee Date of Hire = Day 1 of probationary period
- Employee Accrual eligible date = day after the probationary period has expired
See the examples of accrual eligibility scenarios below.
Example 1: New Hire assigned to a package which includes a policy with either no probationary period or a probationary period configured as Hours ARE accrued.
- Employee Hire Date: 05.03.2016
- Employee Accrual Eligible date = 05.03.2016
Example 2: New Hire assigned to package which includes a policy configured with a 30 day probationary period during which Hours ARE NOT accrued.
- Employee Hire Date: 05.03.2016 (day 1 of probationary period)
- Employee probationary period expires: 06.01.2016
- Employee Accrual Eligible Date = 06.02.2016
Example 3: Existing employee assigned to a PTO package during PTO implementation.
- Employee Hire Date: 12.01.2015
- Policy Start Date: common date of 01.01.2016
- Employee Accrual Eligible Date = 01.01.2016
The Time Off module calculates policy accruals based on the accrual frequency and total hours accrued per year configured for each policy.
The system is exact when calculating the number of hours accrued by an employee each accrual date. To ensure that all hours are granted to the employee, any remaining fraction of an hour that was not accrued due to the rounding is then added to the last accrual date of the policy year.
To determine the number of hours accrued each accrual date the following calculation is used:
- (Total hours accrued per policy year) / (Total accrual dates in the policy year) = Hours accrued per accrual period (rounded down to the nearest .00)
- (Hours accrued per accrual period) x (# of accrual dates – 1) = X
- (Total hours accrued per year – X) = Hours accrued on the last accrual date of the policy year
Therefore: ((Hours accrued per accrual period) x (# of accrual dates – 1)) + (Hours accrued on the last accrual date of the policy year) = Total hours accrued per policy year
Employees accrue 80 hours per year on a Monthly Basis.
- (80 hours) / (12 accrual dates) = 6.6666 hours rounded to → 6.66 hours
- (6.66 hours) x (11 accrual dates) = 73.26 hours
- (80 hours – 73.26 hours) = 6.74 hours
(73.26 hours) + (6.74 hours) = 80 hours
Use the employee timeline on the PTO Manage employee tab to review accruals.
Note that when a time off policy is configured to accrue per pay period, weekly or bi-weekly, the number of accrual dates in the policy year may be different from what you might expect due to the way the accrual dates fall within the policy year.
ABC Company’s vacation policy is configured as follows:
- Employees accrue a total of 104 hours per policy year
- Hours are accrued weekly
- Accruals occur every Friday
- Policy Year = April 1 – March 31st
You may expect that employees would accrue 2 hours each week since there are 52 weeks in a year and the employee will accrue 104 hours per year. This is probably also how you have been manually processing accruals in the past.
In this example in the 2016-2017 policy year there are actually 53 Fridays between 04.01.2016 and 03.31.2017. Therefore, you can use the accrual calculation above to determine that employee’s will accrue 1.96 hours per week for the first 52 Fridays of the policy year. On the last Friday, they will accrue 2.08 hours. The next policy year of 04.01.2017 – 03.31.2018 has 52 Fridays and therefore, the employee will go back to accruing 2 hours per week.
Remember also, that if time off policies are configured with policy year determined based on the employee’s date of hire, employees may be accruing different amounts of hours per accrual period. This would depend upon how accrual dates fall on the calendar based on each employee’s policy year.