This article is necessarily very granular. But not to worry! Take your time and you'll see that it is actually very simple and logical. We also have a video of this article.
You have plenty of options for accruing Time-Off to your employees.
Time-Off can accrue to your employees daily, weekly, monthly, yearly, or on custom dates. (Automatically)
Time-Off can accrue to your employees according to an anniversary year, a calendar year or a fiscal year.
Unused Time-Off may be allowed to carry over from year to year in the amount that you designate or not at all.
Time-Off may be made to automatically increase over time based on your policies related to longevity of employment.
You may manually adjust the Time-Off balance of any employee at any time.
Time-Off may be set to prorate for the first month or first year and you may establish a waiting period.
At any time, you may change the way you accrue any kind of Time-Off.
You may remove Time-Off accruals as far back as you wish and re-run them under new rules retroactively.
Essential Functions of you Time-Off Plans:
Plans control what happens automatically but you can still give employees Time-Off manually, beyond what the plans do automatically.
Plans control whether Time-Off is carried over from one year to the next and if so, the amount that may be carried over.
Plans control the amount of Time-off that may be earned and when.
- Plans control when the year begins and ends. (Calendar Year, Anniversary Year, Fiscal Year)
Creating a Time-Off Plan:
1. Click on Settings > Time-Off Plans. You will be brought to the Plan List screen.
NOTE: Please do not delete the (None) plan. This is a Time-Off plan that accrues nothing. It is the plan you would assign to an employee for a particular kind of Time-Off that the employee does not earn.
2. Click New. You may choose to use the Accrual Wizard if you wish but these instructions were written on the assumption you would click No to the wizard.
When you clicked New a few moments earlier, you were automatically taken to the Plan Setup screen. Start on the left half to begin to create a Time-Off plan and make selections that are consistent with your policy for this particular kind of Time-Off. Your selections may differ from those indicated in the image below.
NOTE: These instructions do not cover earning Time-Off on Custom Dates. For information on earning Time-Off on Custom Dates you can view the article here.
On the image above; if you click Yes, this will allow an employee to earn a percentage of the full amount based on the percentage of the preceding month or year that the employee has worked for your organization.
If you accrue Time-Off monthly on the 1st of the month, and you hire someone on May 12th. When the new employee earns Time-Off on June 1st, he/she will have worked 65% of May. If you select Yes, the employee will earn 65% of the normal monthly amount for June. Once the employee earns Time-Off on July 1st, he/she will have worked 100% of June so he/she will earn 100% of the normal amount of Time-Off for July.
This same logic applies to annual accruals for January 1st and for the first day of a Fiscal Year or Fiscal month when accruing monthly on a Fiscal Year basis. This becomes irrelevant if you accrue annually or monthly on an Anniversary year basis because there will never be a partial month or a partial year when operating based on the employee anniversary.
If you don't need the software to award only a fraction of the normal amount based on the percentage of the previous month/year worked, select No.
You may click the Test Plan button if you wish but a better way is to skip this button for now. NOTE: You must first click Save before you can Test Plans.
Later you can assign it to your employees and then run (and post) your accruals. You can always remove accruals after they have been posted.
Time earned in: Select how time is to be earned. It is usually easier if your plans earn Time Off by an increment that matches the way your Time-Off is [displayed] whether as Hours or as Days. This is not required but it usually makes using the software simpler.
Earning Levels Start on Benefit Year: You may disregard the checkbox for Earning Levels Start on Benefit Year and the Max Annual Bank as these are slated to be removed from the software. The functionality of these features will be retained in the way the levels are set up and by the amount entered under Max Annual Carry and Max Balance Allowed.
Max Annual Bank is a feature that you do not need to use because the last column below it handles this aspect of the plan.
Earning Levels (Tab to create new level) - The levels represent time periods during which employees earn increasingly higher amounts of Time-Off during the course of their employment.
NOTE: each column under Earning Levels will be explained individually and at the end, an example will be given for this entire section.
From Month is the point where a particular level of earnings begins. Month zero is the point where the employee begins employment.
NOTE: Each subsequent level begins where the previous level ended. There can be no [ GAP ].
The important phrase in the image above is: but not including. The month number you enter under this, is the point up to which a certain amount of Time-Off is earned. Up to - not Through.
This is the limit to what can be earned annually (automatically via the plan) on that level. Our example indicates Hours but yours could be Days. Our example also indicates that time is earned Yearly but yours could be Daily or Weekly or Monthly or on Custom Dates.
NOTE: The amount you enter under this heading only limits the amount of Time-Off given by the plan itself. It does not limit what may be added manually elsewhere in the software. There are two other places where Time-Off may be entered as an earned amount (credit). Below are the two ways and links to the article on how to do this:
This limits the amount of a particular kind of Time-Off an employee with this plan may earn in one year from all three sources available. There are a total of three sources of earned Time-Off. They are:
1. The Time-Off plan
2. The Initial Deposit entered on the Time-Off Assignments screen
3. A Positive Adjustment entered on the Transactions screen
If you enter an amount in this column that matches the amount the plan alone will accrue to employees, you will not be able to enter additional Time-Off as an Initial Deposit for this year or as a Positive Adjustment for this year.
If you enter a zero in this column, there will be no limit to how much time-off an employee may earn in a given year. The employee will still only earn what the plan causes them to earn but a zero in this column frees you up to manually add more time-Off later if you wish as an Initial Deposit or as a Positive Adjustment.
Examples of why you may want the freedom to adjust the balance up beyond what the plan alone will accrue to someone:
- An employee wins a company contest.
- An employee performs an act of heroism or community service.
- An employee needs to roll Time-Off over from one Time-Off Bank to another.
- You discover that it is simpler to manually adjust the balance up than to re-accrue from some point in the past.
This is where you establish the maximum amount that employees may carry over from year to year. This amount may change from level to level or it may stay constant.
Earlier, you would have made a choice of whether to carry over at all.
This is where you establish the maximum amount of Time-Off that an employee is allowed to have at any given time for a particular level.
- If there is no limit to what may am employee may earn, there can be no limit to what an employee may have.
- If there is no limit to what an employee may carry over, there can be no limit to what the employee may have.
In the example below, the plan has 4 levels. Each level must be read with the understanding of when Time-Off accrues. This example plan accrues Time-Off annually on January 1st. Because of this...
Read level one this way... If on January 1st an employee has between zero and 3 months of service, the employee will earn nothing on Jan. 1st.
Read level two this way... If on January 1st an employee has between 3 months and 60 months of service, the employee will earn 40 hours on Jan. 1st.
Read level three this way... If on January 1st an employee has between 60 months and 120 months of service, the employee will earn 80 hours on Jan. 1st.
Read level four this way... If on January 1st an employee has between 120 months and 9999 months of service, the employee will earn 120 hours on Jan. 1st.
After you save your plan, click Plan Description in the upper left. Here you have an example of how our plan appears in plain text.
Each new level begins where the previous level ends. There is no gap.
Notice also that there is no mechanism that tells the plan to give 40 hours to someone after their 3 month waiting period ends if it isn't January 1st. So if someone comes to the end of his/her 3 month probation after January 1st, the employee will not earn any Time-Off on that day because this plan only accrues Vacation time on January 1st.
The employee will earn 40 hours the following January 1st. You will have to manually give the employee an Initial Deposit when the probationary period ends. Then allow the plan to automatically give the employee Vacation time the following January 1st.
Please review the illustration and then read the warning below.
Whenever you create a new Time-Off plan; add the word Plan at the end of each plan name. This way you'll have things like:
- Vacation Plan
- Sick Plan
- Personal Plan
- PTO Plan
Adding the word plan after each plan will help you to easily identify the plan when assigning plans to banks for each of your employees, you will see this on the Time-Off Assignment screen.