Entitlements and Leave

Entitlements

All legislated leave entitlements are set up in the default database. Custom entitlements can be created and configured on the Entitlements (MP.PP.33.00) form.

Once created, entitlements must be linked to pay items so that they can appear in employees' pays—an entitlement can be linked to multiple pay items for accruing and paying out the entitlement. For example, in Australia, the Personal Leave entitlement is linked to an accrual pay item, as well as to payment items for both Sick Leave and Carer's Leave.

Note: A pay item's Pay Item Type determines whether or not it is an entitlement. When setting up pay items for entitlements, ensure that the type you select relates to entitlement accruals or entitlement payments as relevant.

When setting up an entitlement pay item, the entitlement that it relates to must be selected in the item's Attributes section:

Pay items for entitlement accruals also determine the method that will be used to accrue the entitlement:

Full Contract Accrual - a fixed accrual that distributes the entitlement equally over every pay in the year/entitlement period.
Note: New Zealand – For entitlement accrual pay items linked to an annual leave entitlement, Full Contract Accrual is automatically selected and can't be changed.
Accrued Pro rata - an extension of a Full Contract Accrual, which takes into account eligible hours each pay in relation to standard hours. Using this method, the accrual is based on the actual eligible time worked in relation to the full pay period hours.
Explicit - this method provides for an accrual amount based on the period specified within the accrual pay item. This replaces the accrual rate defined in the entitlement that the pay item is related to.

Accruing Entitlements

Adding entitlement accrual pay items to employees' Standard Pays on the Pay Details (MP.PP.23.10) form ensures that they will accrue the specified entitlement amount each pay.

Note: The Entitlement Adjustments (MP.PP.30.00) form can be used to enter opening balances. Opening balances must be provided before any pays are run.

The Entitlement Balances tab on the Pay Details form displays the current balances of all entitlements that the employee qualifies for.

Note: The balances displayed on the Pay Details form are based on completed pays, i.e. open pays are not included in the displayed balances. Balances are also calculated based on the business date.

Adjusting Entitlement Balances

If you need to change an employee's entitlement balances, you can use the Entitlement Adjustments (MP.PP.30.00) form, which lets you make a one-sided adjustment to an employee's Accrual or Earned balance. This can be an opening balance, or an adjustment to the existing balance. You can only adjust an employee's opening balance once per entitlement category.

When an employee’s annual leave entitlement changes, e.g. from four weeks to five, it's best to set up separate four-week and five-week entitlements. Use the Entitlement Adjustments form to clear the four-week balance and create the five-week balance and value. For each Type, you need a line with the correct amount. The types are Accrual Balance, Earned Balance and, in New Zealand, Leave Paid in Advanced. By default, the amount will be calculated with the standard rate.

In New Zealand, leave rates changes over time. You'll need to be manually calculate them on the Entitlement Adjustments form:

If you are posting accruals to the journal, check and override the amounts for Accrual Balance and Earned Balance.
Leave Paid in Advance is effective based on the leave start date. To get the correct value, check actual amounts for leave paid in advance and override.

Paying Entitlements

Entitlements, especially leave entitlements, are not usually paid out on a regular basis, and so are not set up in employees' Standard Pays; instead, whenever an employee takes leave (or is paid any other entitlement), an entitlement payment pay item will need to be added to their Current Pay for the pay period that covers their leave.

Note: If the Employee Self Service module is in use, employees can log in and create their own leave requests. Leave requests appear in the Payroll module, where they can be approved and imported into pay runs by a payroll administrator.

When adding a leave payment pay item on the Employee's Current Pay (MP.PP.31.30) form, a Days Taken link becomes available in the Leave column for the pay item. Clicking this link opens a window where you can specify the calendar days that the employee took leave on:

Selecting start and end dates calculates the Quantity automatically based on the employee's standard hours per day; you can also tick the Is Partial Day? option to enter a quantity manually.

A Leave Summary button is available on the Pay Run Details (MP.PP.31.20) and Employee's Current Pay forms. Clicking this button opens the Employee Leave Summary (AU) (MP.PP.40.50) form, showing all leave being taken by employees for the pay run.

The Entitlement History (MP.PP.44.00) form displays all entitlement accruals and payments for a selected range of employees and pay runs. A View Entitlement Transactions option is available in the Explore menu on the Employee's Current Pay form—this opens the Entitlement History form, filtered to show entitlement accruals and payments for the employee in the current pay. The Entitlement History form can also be opened from the Entitlement Balances tab of the Pay Details (MP.PP.23.10) form.

Non-Accruing Entitlements

Some entitlements, such as Bereavement Leave or Unpaid Leave, do not accrue. Entitlements can be marked as non-accruing by ticking the Non Accruing Entitlement option on the Rules tab of the Entitlements (MP.PP.33.00) form.

Note: An entitlement cannot be marked as non-accruing if it is currently associated with accruing pay items.

Balances are not displayed for non-accruing entitlements, and liabilities are not recorded for them.