Finance: Absence Settings: Absence Rules

Based upon the Entitlement Unit/UOM (Unit Of Measure), a given amount of absence per period (for example 28 days holiday a year). This may be for the given holiday period, if the entitlement type is fixed. If it is a Rolling type of entitlement it will be for the previous period

This way of calculating entitlement is based upon the theory that absence entitlement is built up (or Accrued) as hours (or a value) that has been worked by an employee in the current holiday year (Fixed type) or previous (Rolling) year. The more hours an employee works, the more entitlement they earn.

In Timegate Web, you enter a percentage for the rate at which absence entitlement is Accrued. in the case of current UK legislation, whereby 28 days holiday a year is the statutory minimum, the percentage you enter would be 12.07%.

The entitlement is calculated by looking at how many hours have been worked from the start of the absence period until the current date and multiplying that by the accrued percentage.

For example if an employee has worked 800 hours to date within the current period, their entitlement would be 800 hours x 12.07% = 96.56 hours.

When calculating using this method, it is important to enter the correct value. Often, users set this to 100% - thereby meaning that the employee has a hundred percent holiday!

The Contract Multiplier is used for working out absence entitlement on a pro-rata basis. The employee is entitled to x units (weeks) multiplied by the number of contracted hours or working days (depending on UOM of hours or days) of the employee as defined in Employee | Absence.

For example the Contract Multiplier amount might be set to 5.6 weeks per year (28 days) the current UK statutory minimum (including public and bank holidays).

The employee’s weekly working days or hours are then defined against their own employee record.

If the rule is days and the working days is set to 4 (4 days per week), then their annual entitlement would be 5.6 weeks x 4 = 22.4 days.

If the rule is set up as an hours rule, and they work 40 hours per week, then their entitlement would be 5.6 x 40 = 224 hours.

The Contracted Multiplier Derived method is used to counter problems with calculating entitlement with a simple Contract Multiplier.

When using a simple Contracted Multiplier method to calculate absence entitlement, it doesn’t take into account that an employee may move from one contract to another. For example, if an employee moved from working three days a week to a four day a week pattern, unless a Timegate Web user remembers to change their working days, the employee would be penalised, i.e. their entitlement would be less than it should be. Alternatively, if they switched from four days to three days, their entitlement would be more than it should be.

The Contracted Multiplier Derived method takes the employee contracted hours/working days (including diary events) each night as part of the daily balance overnight processing job, and uses these to work out the entitlement.

The processing looks back over x weeks and determines the average hours and days per week the employee has worked.

This gives a much more accurate view of their work pattern and their entitlement.

Any changes are also audited against the employee when either the previous hours or days differed to those of the current day.

This is capped at the maximum contracted hours/days.

The 12.07% multiplier for accrual is worked out as follows - 28 days is 5.6 weeks’ holiday entitlement per year. This is then divided by 46.4 weeks (52 weeks – 5.6 weeks). The 5.6 weeks are excluded from the calculation as the employee wouldn’t be working during the 5.6 weeks to accrue their 28 days of annual leave.

Hourly Rate is calculated from the Standard Absence Hourly Rate as set in Employee | Absence for the Effective Date on or before the Diary Event.

Can be used with both Defined and Derived Shift Patterns but will only use them to calculate what is a          Rest or a Work day

• If the Employee is on a Derived Shift Pattern, the Daily Hours comes from the Standard Absence Daily Hours as set on the Employee | Absence for the Effective Date on or before the Diary Event

• If the Employee is on a Defined shift pattern, the Daily Hours will first come from the Standard Absence Daily Hours. If the System Setting Absence Pay over keyed Paid Event Duration Hours is selected and the Entitlement UOM is hours, or the Standard Absence Daily Hours is 0, the daily hours will come from the shift
  pattern hours

Looking at the previous number of maximum calculation weeks, the duty duration and pay is summed. Once the number Average Calculation weeks is met, skipping any weeks with no duties, counting is finished

If no duties are found, or the Employee has started in the current count weeks, the daily hours and rate come from the Employees Average Daily Hours and Average Daily Rate as set on the Employee | Pay Details

If the Absence Scheme Average Settings are to use Days in period and pay working days, the average daily hours and rate will be the average of all found duties and rate

• AVERAGE DAILY HOURS = (TOTALMINUTESCOUNTER/60.0)/(TOTAL DUTIES AND DIARY EVENTS)

• AVERAGE HOURLY RATE = TOTAL DUTY AMOUNT PAID/(TOTAL DUTY MINUTES/60.0)

Otherwise, the average daily hours and rate will be the average hours divided by the normal working week. The average rate will be the average of all rates

• AVERAGE DAILY HOURS = ((TOTALMINUTESCOUNTER/60.0)/AVERAGE CALC WEEKS)/NORMAL WORKING WEEK

• AVERAGE HOURLY RATE = TOTAL DUTY AMOUNT PAID/(TOTAL DUTY
  MINUTES/60.0)

Employee averages are calculated in a customer specific stored procedure that runs overnight to populate the Employee Averages table

• If this is greater than the Maximum/Minimum Average Paid Hours, then the hours will be truncated

• Average Daily Hours and Average Daily Rate are then from the Employee averages table

• The daily hours and rate are then capped at the minimum/maximum average paid rate and hours

• Used with derived and defined shift patterns

• This is the same as Average, but the Average Hourly Rate always comes from the Basic Employee Rate (i.e. it is not site specific)

• Hours are calculated by reading back through x weeks of Duty Rates records (defined by the rule) and dividing that figure by the number of weeks that contain data and the number of work days per week

• Rate is taken from the employee’s basic rate as per Set Up | Employee | Pay Details | Absence Setting

This is the same as Average, but then the Average Daily Hours will come from the hours per day the Employee should be contracted to work, as set in Employee | Absence, Contracted Hours and Working Days

Can be used with both defined and derived shift patterns

• Hours are taken from the shift pattern (either defined or derived)

• Rate is calculated in the same way as for the Average type

Can only be used with derived shift patterns

Looking at the previous number of maximum calculation weeks, the duty duration and pay is summed. Once the number Average Calculation weeks is met, skipping any weeks with no duties, counting is finished

If no duties are found, or the Employee has started in the current count weeks, the daily hours and rate come from the Employees Average Daily Hours and Rate as set in Employee | Pay Details

For Defined Shift Pattern, the rate will always be the post pay rate standard absence hourly rate for the effective date on or before the duty as set in Employee | Absence

For a Derived Shift Pattern, the rate will be based of the pay method for that pay level; Table Rate, Employee Basic Rate, Greater of Base or Table Rate, Lesser of Base or Table Rate. This is multiplied by any Pay Multiplier or Bill Column if this is 0

The daily hours are then calculated from the sum of all the hours and rate, divided by the normal working week value

If the Absence Scheme has average days to use as days in period and paid days of working days, the daily hours are divided by the total duties and the Hourly rate by the total hours

As Average Shift Pattern Site Rate, but the rate will always come from the Employee Standard Absence Rate.

Uses Average Daily Shift Hours calculated by reading back through x weeks of the Derived Shift Pattern (defined by the rule) and dividing that figure by the number of weeks that contain data and the number of work days per week

Rate is taken from the employee’s Standard Absence Hourly Rate from Set Up | Employee | Pay Details | Absence Setting

An Employee on a Derived shift pattern will be paid the rate and hours they are expected to be paid on that day

• If this is 0 or the Employee is on a Defined shift pattern, it will fall back to the Employees Standard Daily Hours and Standard Absence Hourly Rate

• If this is 0, it will fall back to the Branch Standard Daily Hours and Standard Absence Hourly Rate for the Employees branch

The hours and rate will always come from the Employees Standard Absence Hourly rate and Standard Daily Hours

• Hours are taken from the Derived Shift Pattern table for each day in the diary event.

• Rate is taken from the employee’s Standard Absence Hourly Rate from
  Set Up | Employee | Absence

• For the Hours, same as Average

• For the Rate, same as Shift Pattern Site Rate

• Hours are calculated by reading back through x weeks of Duty Rates records (defined by the rule) and dividing that figure by the number of weeks that contain data and the number of work days per week

• Rate is calculated based on the site, hour type and pay level for each day within the derived shift pattern

The average daily hours are always calculated from the Contracted Hours divided by the Contracted Working Days. This is capped by the Minimum/Maximum Average paid hours

The Average Hourly Rate is calculated from the Employees Standard Entitlement, Standard Entitlement, Bank Holiday entitlement and the Contracted Hours and Days per Week. This is then capped above the Minimum Wage for the Employees Branch, the date of the Diary Event and the Employee’s age.

• This rule enables you to pay absence where if the calculated average hourly rate is greater than an employee’s current hourly pay rate then that average hourly rate should be used, but if the calculated average hourly rate is less than an employee currently hourly rate, then the current hourly rate should be used.

• The hours are the employees contracted hours, their working days / daily hours.

• The rate is the employees average rate, if this is higher than their employee basic rate (just basic rate, not site rate).

• Rate is the employees basic rate, if this is higher than their average rate.

The following scenarios illustrate how this works

An employee is contracted to 40 hours per week over 5 working days currently at £10 per hour (but £9) last year before pay rise.

Scenario 1

• Earnings over the last eligible 52 weeks are £18,720.00

• Weekly average is £18,720.00 / 52 weeks, gives £360.00 per week

• £360 per 40 hour week equates to £9.00 per hour (calculated hourly rate)

• The rule states, pay £9.00 but IF < THAN £10.00, pay £10.00 per hour

• Individuals calculated hourly rate is therefore £10.00

Scenario 2

• Earnings over the last eligible 52 weeks is £25,600.00

• Weekly average is £25,600.00 / 52 weeks, gives £492.30 per week

• £492.30 per 40 hour week equates to £12.30 per hour (calculated hourly rate)

• The rule states, pay £12.30 but IF < THAN £10.00, pay £10.00 per hour

• Individuals calculated hourly rate in this scenario is therefore £12.30

Select to go Back to the finance menu page

Select to Save the changes to your absence rule

Name of the Absence Rule 

Description of the Absence Rule 

Select to automatically creating diary events, on a monthly basis to cover any outstanding absence from the previous month

By default, will be active and available for use elsewhere in Timegate Web.

If made not active in the future, this setting will not remove the rule from Employees that have it assigned or stop it processing - it will simply not show it for future use in Employee | Absence.

There are six different choices to select from here:

• Employee Sickness - Either Statutory Sick Pay (SSP) on its own can be paid for each of the SSP Days Per Week defined, or a Company Sick Pay (CSP) scheme can be added and, when used up, will revert to SSP for the remainder of the sickness period.

• Injury On Duty

• Time Off In Lieu

• Employee Holiday

• Absence - These are for more generic payments such as Suspension Pay, Compassionate Leave, Jury Service, Dental Appointments, Hospital Appointment etc.

• Parental Absence

There is no processing behind either Injury on Duty or Time Off in Lieu

This drop-down list is generally used in conjunction with Absence event types only. It’s not advisable to select anything in here for sickness, holiday or parental absence types. Diary Events are configured from Admin | General | General Maintenance | Diary Events

This setting defines how the holiday year works, from Fixed date for one year, or a Rolling yearly period

This will allow the Employee to take more entitlement than defined but will not be paid for any additional work.

Ideally this option should not be selected, with an “Un-Paid Holiday” Diary Event used instead. It would then be immediately obvious unpaid leave has been taken within the diaries, however, to allow the payment of fractions of Holiday Entitlements then this option should be selected i.e. an employee with a remaining entitlement of 1.6 days holiday should be given an absence duration of 2 paid days – the system will automatically pay 1 whole day and 0.6 of the remaining day

This control checks to see whether a diary event can be created when the paid duration of the event exceeds the accrued entitlement.

When Allow Accrued Overpayment is set to No, the user cannot exceed accrued, unless their security item allows it

When Allow Accrued Overpayment is set to Yes the user can exceed accrued, regardless of their security item

When Allow Accrued Overpayment is set to Service the user can only exceed accrued if their security item allows it or the number of whole months between the employee’s joined date and the start of the diary event is not less than the Months entered against the rule.

It is assumed that only whole months will be counted.  Therefore, if the employee joined on 1st January 2019 and a diary event was being entered for 25th December 2019, then only 11 whole months would be counted. Only on 1st January 2020 would 12 whole months be counted.

Select Entitlement Method. Choices are:

• Defined

• Accrued

• Contracted Multiplier

Further details of Entitlement Methods are detailed above in “Calculating Entitlement Methods”

Select between a Fixed or Service based absence entitlement rule

This is the Entitlement Unit (of Measurement). Select from Hour, Day, Incident or Value:

• Hour - on an hourly basis

• Day - on a daily basis

• Incident - If your company pays employees for a set number of these types of event  (such as dental appointments, funerals and hospital visits) you may wish to use this

• Value - relates to a piece of bespoke customer work

Note: If Accrued rules used, this list will be restricted to Hours and Values

Select the Entitlement Unit (of Measurement) for the Incident. Select from Hour, Week, Month, Year, period of Employment

By default, when an absence rule is configured using hours, hour values are displayed to two decimal places. Select this option to display any hourly fields, rounded up or down to the nearest half an hour. Note: By selecting this option, the no changes are made to the rate generation of absence or any absence calculations. The setting only controls on screen rounding.

Derived using the Calc Weeks, Max Calc Weeks and No Min Weeks

Select to limit the hours paid to an Employee

This is the maximum number of hours that can be entered in the Contracted Hours field on the Employee Absence Tab. For the Annual Days Cap below to work, the employee needs both this and Max. Contr. Days values populated. Be aware that entering 0 (zero) as a value will result in processing not being undertaken - the system will read this as zero being the maximum contracted hours rather than an unlimited amount of maximum contracted hours. Ensure you enter the correct maximum contracted hours in here.

This is the maximum number of days that can be entered in the Contracted Days field on the Employee Absence Tab. For the Annual Days Cap below to work, the employee needs both this and Max. Contr. Hours values populated. Be aware that entering 0 (zero) as a value will result in processing not being undertaken - the system will read this as zero being the maximum contracted days rather than an unlimited amount of maximum contracted days. Ensure you enter the correct maximum contracted days in here.

The contracted multiplier Annual Days Cap is to make contracted multiplier rules more re-usable across employees with different contracted hours or working days. It is only visible if the rule is a Contracted Multiplier Rule, and it is Not Derived. This cap is always measured in days, regardless of whether the entitlement is measured in hours or days.

For the cap to work, the employee needs both the Max. Contracted hours and Max. working days values populated.

The following example for an employee contracted to work 60 hours a week, over 6 days per week, with an absence rule allowing 5.6 weeks annual leave and a rule to cap at 28 days shows how the cap works:

• Employees Max. Contr Hours = 60 hours

• Employees Max. Contr. Days = 6 days

• Entitlement weeks = 5.6 weeks

• Annual days cap = 28 days

• Entitlement = 60 contracted hours x 5.6 weeks = 336 hours

• Hours per day = 60 contracted hours / 6 working days = 10 hours/day

• Days equivalent = 336 hours / 10 = 33.6 days

33.6 days is greater than the 28 day cap, so entitlement is capped at 28 days (which at 10 hours per day is 280 hours)

This value specifies the longest duration the entitlement will be valid for

Select between Weekly or Two Weekly. Defines the period that the Max Accrued Period Entitlement cap will be over

If any calculated entitlement exceeds the value in the Max. Accrued Ent. then the hours are capped for that Accrual Period. If the absence rule has a Max Weekly Accrued Ent. value greater than 0, then the accrued calculation will analyze hours worked on a Accrual Period basis and cap the hours if they exceed the value specified against the absence rule. If the new absence rule field is 0, then the existing accrued calculation, albeit, the existing calculation also includes absences that have been ticked

Select between Work or Time:

• Work will accrue the percentage of the hours of the duties worked

• Time will accrue the Max Accrued Period Entitlement per Entitlement Period since the start of the holiday year/join date part way through year

Enter a limit for the amount of Hours, Values, Days or Incidents that can be carried over. A numeric value from 0 (the default value) upwards that determines how much absence entitlement can be carried over to the next entitlement period. for example if 5 days were left and this value was set to 3 then only 3 days will be carried to the next period - any more than the Max Carried Over Hours/Values/Days/Incidents will be lost

Enter a limit for the Paid Hours, Paid Values, Paid Days or Paid Incidents paid to an Employee

This indicates the point where the balance processing is carried out. This is to allow for all of the Diary Events to be reviewed and corrected before balance processing is done. There are three options to select from the drop-down list:

• Last Rate Gen – Prior to the next Rate Generation after the Period End

• Month End – Prior to the next Rate Generation after the end of the month that the Period Ends in

• Next Month End – Prior to the next Rate Generation 2 months after the end of the month that the Period Ends in

Examples:

For a Month End example, if your holiday year runs 1st Jan - 31st December, and your pay period ends on the 5th January - balance processing will be carried out the start of February.

For a Next Month End example, if your holiday year runs 1st Jan - 31st December, and your pay period ends on the 5th January - balance processing will be carried out on the start of March.

The method of payment for the rule. This can be any of the Hour and Rate Calculations
as listed:

• Standard

• Average

• Average Shift Pattern Site Rate

• Average Shift Pattern Absence Rate

• Shift Pattern Site Rate

• Shift Pattern Absence Rate

• Average Hours/Basic Rate (Average Hours and Site Rate)

• Contracted Hours/Average Rate (Contracted Hours and Rate)

• Average Hours/Site Rate

• Contacted Hours/Average Composite Rate (This value has now been hiddenfor Entitlement Methods Defined and Accrued. It can only be contracted multiplier)

For more information see “Payment Methods”, earlier in this guide.

Note: Contacted Hours/Average Composite Rate rule is based loosely on the existing average hours and rate calculation, but there are some subtle, but quite significant differences.

Maximum Weeks For Daily Hours Calculations - Used to calculate average daily hours. The maximum number of full weeks that Timegate Web will look back to obtain the number of information defined below in the Avg Calc. Weeks (Daily Hours) field. In line with UK Legislation this value is recommended to be between 52 and 104.

Average Weeks For Daily Hours Calculations  - Used to calculate average daily hours. - The number of Full Weeks needed to get an average for payment (daily hours). If there is a week where no payments are made the system will look back to the Maximum number of weeks to get the information (as defined above in Max Calc. Weeks (Daily Hours))

Maximum Weeks For Average Hourly Rate Calculations - Used to calculate average daily rate. The maximum number of full weeks that Timegate Web will look back to obtain the number of Average Weeks information defined below in the Avg Calc. Weeks (Hourly Rate) (Hourly Rate Calculation). This value is often left at 12 (in line with the UK Governments old guidelines, ensuring employees average hourly rates become accurate more quickly)

Average Weeks For Average Hourly Rate Calculations - Used to calculate average daily rate. The number of Full Weeks to get an average for payment. If there is a week where no payments are made the system will look back to the Max Calc. Weeks (Hourly Rate) to get the information required (Hourly Rate Calculation)

Note: Due to UK legislation changes that took effect from April 2020, the calculation of average daily hours and average hourly rates is now based upon a minimum of the last 52 weeks, up to 140 weeks. An employee’s calculated average hourly rate would have been adversely affected by this if they had a pay increase recently i.e. within the past 52 weeks. This would not have been reflected in the pay they received for a diary event fully until after 52 weeks. The way that has been resolved is by introducing the Max Calc. Weeks (Hourly Rate) and Avg Calc. Weeks (Hourly Rate) alongside the Max Calc. Weeks (Daily Hours) and Avg Calc. Weeks (Daily Hours). By splitting the number of weeks for the average calculation out in such a way that the number of weeks of data used to calculate the average daily hours can continue to use the UK Government guidance, and the number of weeks used to calculate the average hourly rate can be less, the employee will be more rapidly see the benefits of their pay increase when calculating averages.

The number of days per week used to derive the average hours for the employee

Select to limit the minimum weeks paid to an Employee

Select to apply the Basic Pay Rate if the calculated average rate falls below that rate. This option displays only when the Apply Min Wage option is displayed.

From the drop-down list, select:

• Normal

• Days in Period

• Avg Days per Week

From the drop-down list, select:

• Working Days

• SSP Days

Select to limit the minimum hours paid to an Employee

Select to limit the maximum hours paid to an Employee

Enter the effective start date (be that through manual, keyboard entry in the local date format from language settings format or by using the drop down calendar)

Enter the effective finish date (be that through manual, keyboard entry in DD/MM/YYYY format or by using the drop down calendar)

Amount of Entitlement Hours, Values, Days, Incident, or Weeks within a period expressed as a percentage

Amount of Entitlement Hours, Values, Days, Incident, or Weeks within a period and Bank Holiday Entitlement for contracted hours/composite rate payment method

Select to Add Effective Date to the rule. Multiple Effective Dates can be added for each rule

Enables you to copy the effective date

Enables you to delete the effective date

Number of the occurrences

Days that are not paid at the start of the Diary Event (the amount of days before the allowance becomes payable) i.e. in the case of SSP, none is paid for the first three days of any illness, An employee would have to wait three days for this payment to commence

This value is used to cap the amount of payments made per week based on the Entitlement Unit below

The unit of measure, for example, Blank, Hours, Days. This value cannot be days or hours. Cannot be days if main method is hours.

The percentage of the gross payment calculated to be paid to the employee

Defaults to the Rule Using Field and cannot be changed

For the remainder of the entitlement defined, the system will pay the following:

• Calc –The calculated value of the % and Using fields below

• Higher – Higher of the calculated value of the % and Using fields below and the value field below

• Lower – Lower of the calculated value of the % and Using fields below and the value field below

• Value – the value defined

If this is left blank, it does not apply remainder calculation

The remaining entitlement

Defaults to the Entitlement Unit and cannot be changed

The percentage of the gross payment calculated to be paid

Defaults to the Rule Using Field and cannot be changed

Physical Value to pay

Select to add a new Occurrence under the Occurrence heading. You can add multiple Occurrences, to meet with your business need. This is covered in more detail later in this section of the guide.

Enables you to Delete the Occurrence