If you choose to reduce the number of work hours for some of the employees and decide to adjust the leave accrue accordingly, here are some of important notes and steps to help you along the way.
Understand the difference between standard and work-time leave type
Standard Leave Type
This is the default leave type to use for all salaried employees. For a salaried employees, during a normal circumstance, they will be accrued a certain number of leave hours as long as they are in the payrun.
In the following example, even you reduce the number of paid hour to 0, the accrued leave hour is still 20 days per year (work out to 0.0767 per work hour if that employee works 38 hours per week)
Work-time Leave Type
- The is the default leave type to use for all wages employees. The accrued leave hour will only calculated by their work hour.
The following example is showing what happen if the employee did not work for the pay period, he/she will not accrued any leave hour.
- The is the default leave type to use for all wages employees. The accrued leave hour will only calculated by their work hour.
How to temporarily reduce the leave accrue in case the work hours is reduced?
In normal circumstance, reducing the work hour of salaried employees will be against FairWork rule. However, with the current crisis, FairWork has relaxed some rules regarding JobKeeper scheme. More information can be found here: https://coronavirus.fairwork.gov.au/coronavirus-and-australian-workplace-laws/flexibility-in-workplace-laws-during-coronavirus/jobkeeper-changes-to-the-fair-work-act.
- If you choose to reduce the work hour of your employees and wish to reduce their accrued leave hours during the time, here are the process to help you to achieve just that:
- For a salaried employee, here is a very basic set up as an example:
- If you pay with reduced hours for that employee, the normal accrued hour will apply. To reduce the accrued hours based on the work hour you given them, you will need to add a work time leave for them.
- Add work time leave using employee maintenance screen before paying the employee in Payrun screen
- Change the added leave with recommended settings (you can choose your own setting if you wish)
- When you pay the employee in the payrun, make sure to double-check their leave accrual in PayEditor screen
- The payslip will display as the following with both leaves appearing:
- In case that you want to use only work time leave from now on, you need to do a few things before paying employees (un-pay them if they are paid in the current payrun)
- Add work time leave using employee maintenance screen before paying the employee in Payrun screen
- For a salaried employee, here is a very basic set up as an example:
What should I do if my employees are back to standard work hour?
What should I do if I decide to terminate my employees while they are working with reduced hours?