Available for the following Payroll plan: Standard, Premium
Available for the following user access levels: Admin
When you have employees whose work hours/days differ from one week to the next, it can be difficult to determine what a week is. Although all employees are entitled to 4 weeks of leave, if you are unable to identify a work pattern for your employee, you may need to consider the days and hours the employee has worked leading up to them taking leave.
Our payroll platform averages over a given number of weeks (between 2 - 8 weeks), called the review period for employees with irregular work hours, taking into account either the advanced work pattern or the submission of timesheets.
The review period can be set at the business level in the Leave Categories screen.
- Log in to your payroll platform.
- Go to Payroll Settings
- Select Leave Categories
- You then need to change the number of weeks in the Irregular hours work pattern review period. This will default to 4 weeks but you can choose from 2 to 8 weeks depending on your needs.
You can also set it at the employee level if you require different review periods for some employees.
- Go to the Employee list.
- Select or search for the employee you need to change the review period for.
- Go to the employee Pay Rates screen and enter from 2 to 8 weeks in the Irregular hours work pattern review period.
- Next, go to the Pay Run Defaults screen.
- Make sure Irregular Employment is ticked to guarantee the system uses the review period when the employee takes leave.
If the employee has a recurring work pattern over a number of weeks, you can enter an advanced work pattern of up to 8 weeks.
- To enter an advanced work pattern go to the Employee list.
- Select or search for the employee
- Click on Pay Run Defaults.
- Click Advanced next to the Standard Work Week. Add the First week reference date which will be the start date of the first week then enter the start/stop times or just the number of hours they work on the days they would normally work.
- You can then add further weeks as required. At the end of the last week the work pattern will revert back to the beginning and start at week 1 again.
Employees who work irregular hours should always be setup to accrue 4 standard weeks per year to ensure compliance with the Holidays Act. Due to the nature of hours and days being irregular, to set them up with anything but 4 weeks would not ensure they would get their full entitlement.
When employees apply for leave, they can apply in hours, days or weeks and when the leave is imported into the pay run, the system will use the averaging period to convert the leave back to weeks for the reduction of their leave balance.
How do hours taken get converted to weeks?
When an employee applies for leave in hours, the system converts those hours into weeks using the review period. Using the example where the employee is set to a review period of 4 weeks, they have worked 83 hours over that 4 week period giving them an average of 20.75 hours and they apply for 4 hours of leave the conversion will be 4 / 20.75 = .19 of a week.
Warning
When employees have no regular hours, a week can only be determined at the time the annual holiday is taken. It is MBIE’s view that the employer and employee should first try to identify whether there is a pattern of work. If a work pattern genuinely cannot be established, then consideration of the days and hours the employee has actually been working in the weeks leading up to the holiday can be used.
Author recommended
So you have now viewed how to manage irregular hours employees and you are now wondering, what can I do next? There are two recommendations:
- How leave is applied based on setup scenarios | Payroll Guide: To get a better understanding of how the leave settings work based on your setup, we have provided several examples in this guide.
- Managing my organisation leave requests - Payroll Web Platform: The Payroll Leave Management feature allows your managers or admins to approve or decline employee submitted leave requests, with the ability to see the employees leave balance and any conflicting leave requests via the calendar display.