A comprehensive guide to understanding and customizing leave accrual policies in the system, including vacation/PTO, sick leave, personal leave, and other leave types with rules for accrual frequency, waiting periods, carryover limits, and tenure-based adjustments.
This article should be updated annually to reflect any changes to default accrual policies or new features in the leave accrual system. Key sections to update include the default policy specifications and any new rule types or conditions added to the system.
Leave Accrual Policies: Understanding and Customizing Employee Leave Benefits
Overview
Leave accrual policies in the Shifts system allow you to configure how employees earn time off benefits. The system comes pre-loaded with common leave types and accrual policies that you can use as-is or customize to fit your business needs.
This article covers:
- Default leave types and accrual policies included in the system
- How leave accrual works and how balances are calculated
- How to view and manage leave accrual policies
- How to customize policies and rules for your business
- Best practices for leave accrual management
Default Leave Types
When your account is first set up, the system automatically creates these leave types:
| Leave Type | Description | Default Settings |
|---|---|---|
| Vacation/PTO | Annual vacation or paid time off | Accrual enabled, No documentation required for <5 days, 7 days advance notice |
| Sick Leave | Time off for illness or medical appointments | Accrual enabled, Documentation required after 3 days, No advance notice |
| Personal Leave | Time off for personal matters | Accrual enabled, No documentation required, 3 days advance notice |
| Parental Leave | Leave for new parents | Accrual disabled (typically allocated), Documentation required, 30 days advance notice |
| Bereavement | Leave due to death in family | Accrual disabled (typically allocated), Documentation required, No advance notice |
Default Accrual Policies
The system includes several default leave accrual policy templates:
1. Standard Vacation/PTO Policy
- Monthly accrual of 1.25 days (15 days per year)
- Maximum balance of 30 days
- 10 days maximum carryover between years
- 90-day waiting period for new employees
- Prorated first accrual
2. Entry-Level Vacation Policy
- Monthly accrual of 0.83 days (10 days per year)
- Maximum balance of 20 days
- 5 days maximum carryover
- 90-day waiting period for new employees
- Prorated first accrual
3. Senior Employee Vacation Policy
- Monthly accrual of 1.67 days (20 days per year)
- Maximum balance of 40 days
- 15 days maximum carryover
- No waiting period
- Immediate first accrual
4. Standard Sick Leave Policy
- Annual front-loaded accrual of 10 days
- Maximum balance of 20 days
- 10 days maximum carryover
- 30-day waiting period
- Immediate first accrual
5. Quarterly Personal Leave Policy
- Quarterly accrual of 0.75 days (3 days per year)
- Maximum balance of 5 days
- No carryover allowed
- 90-day waiting period
- First accrual after waiting period
6. Tenure-Based Vacation Policy with Rules
This policy includes rules that automatically adjust accrual amounts based on an employee’s tenure:
- Default: 1.0 day per month (12 days per year)
- After 2 years: 1.25 days per month (15 days per year)
- After 5 years: 1.67 days per month (20 days per year)
- After 10 years: 2.0 days per month (24 days per year)
- Maximum balance increases to 40 days after 5 years of service
How Leave Accrual Works
Leave accrual operates based on several key components:
1. Accrual Frequency
| Frequency | Description | Common Use Cases |
|---|---|---|
| Monthly | Employee earns leave each month | Standard vacation, sick, personal leave |
| Quarterly | Employee earns leave four times per year | Personal days, floating holidays |
| Annually | Employee receives full allocation once per year | Front-loaded sick leave, sabbatical |
| One-time | Employee receives allocation once | Special leave types, parental leave |
| On-demand | Allocated as needed/approved | Bereavement, jury duty |
2. Accrual Calculations
The system calculates accruals based on:
- Frequency: When accruals occur (monthly, quarterly, etc.)
- Amount: How much is accrued each period (days/hours)
- Proration: Whether partial periods are prorated based on hire date
- Waiting Period: How long new employees must wait before accruing
- First Accrual: How the first accrual is handled (immediate, prorated, after waiting period)
3. Balance Limits
Several settings control maximum leave balances:
- Max Balance: The maximum total balance an employee can have
- Carryover Allowed: Whether unused leave carries over to next year
- Max Carryover: Maximum amount that can carry over if allowed
4. Accrual Rules
Rules modify the base policy for specific conditions:
- Rule Type: What aspect is modified (accrual amount, frequency, max balance)
- Condition Type: What the rule is based on (tenure, role, location, employment type)
- Condition Value: The specific value that triggers the rule
- Rule Value: The new value that applies when condition is met
- Priority: Higher priority rules (higher numbers) take precedence
Viewing Leave Accrual Policies
To view the leave accrual policies for your business:
- Navigate to Admin > Leave Accrual Policies
- Use the filter at the top to narrow down by leave type
- Click on any policy to view its details and associated rules
Customizing Leave Accrual Policies
Adding a New Leave Type
- Navigate to Admin > Leave Types
- Click the Add Leave Type button
- Fill in the required information:
- Name (e.g., “Sabbatical Leave”)
- Color (for calendar display)
- Description
- Whether accrual is enabled
- Documentation requirements
- Advance notice requirements
- Click Save
Creating a New Accrual Policy
- Navigate to Admin > Leave Accrual Policies
- Click the New Policy button
- Select the leave type this policy applies to
- Fill in the policy details:
- Name and description
- Accrual frequency (monthly, quarterly, annually)
- Accrual amount per period
- Accrual day of month (for monthly accruals)
- Accrual months (for specific months, e.g., January only)
- Maximum balance allowed
- Carryover settings
- Waiting period for new employees
- First accrual handling
- Proration settings
- Click Save
Setting a Default Policy
For each leave type, you should designate one policy as the default:
- Navigate to Admin > Leave Accrual Policies
- Find the policy you want to make default
- Click the Make Default button (or select this option from the actions menu)
New employees will automatically be assigned the default policy for each leave type.
Adding Accrual Rules
To create sophisticated accrual policies that vary based on employee attributes:
- Navigate to the details page of an existing policy
- Click Add Rule
- Configure the rule:
- Rule Type: What is being modified (accrual amount, max balance, etc.)
- Condition Type: Based on what attribute (tenure, role, location, etc.)
- Condition Operator: Comparison operator (>, >=, =, <=, <)
- Condition Value: Threshold value that triggers the rule
- Rule Value: The new value to apply when condition is met
- Priority: Determines precedence (higher number = higher priority)
- Click Save Rule
Example: To increase accrual amount after 5 years of service:
- Rule Type: accrual_amount
- Condition Type: tenure
- Condition Operator: >=
- Condition Value: 5
- Rule Value: 1.67
- Priority: 10
Managing Employee Leave Balances
Assigning Policies to Employees
Employees are automatically assigned the default policy for each leave type when they’re added to the system. To assign a different policy:
- Navigate to Admin > Leave Balances
- Select the employee
- Click Change Policy
- Select the new policy to assign
- Set the effective date for the change
- Click Save
Manual Adjustments
To make one-time adjustments to an employee’s leave balance:
- Navigate to Admin > Leave Balances
- Select the employee
- Click Add Adjustment
- Enter the adjustment amount (positive to add, negative to deduct)
- Select the reason for the adjustment
- Add notes to document the reason
- Click Save
Processing Accruals
Accruals are processed automatically on a scheduled basis, but you can manually trigger the process:
- Navigate to Admin > Leave Accrual Policies
- Click the Run All Accruals button
- Confirm that you want to process accruals
This will calculate and apply accruals for all employees based on their assigned policies.
Best Practices for Leave Accrual Management
1. Compliance Considerations
- Research local labor laws regarding paid time off
- Some jurisdictions mandate minimum sick leave accrual
- Document policy decisions for compliance purposes
- Consider special rules for part-time or seasonal employees
2. Policy Documentation
- Create and share a written leave policy with employees
- Document the reasoning behind policy decisions
- Keep records of policy changes and effective dates
- Ensure employees understand how accruals work
3. Regular Maintenance
- Review leave balances quarterly
- Audit accrual calculations periodically
- Update policies to reflect changing business needs
- Ensure carryover rules are properly applied at year-end
4. Employee Communication
- Notify employees of their current leave balances regularly
- Provide advance notice of policy changes
- Ensure managers understand how to interpret leave balances
- Train employees on how to request time off
Year-End Processing
At the end of each year, you should perform these maintenance tasks:
- Verify Balance Carryovers: Ensure that carryover maximums are correctly applied
- Reset Annual Counters: For policies that reset annually, verify the reset occurs correctly
- Front-load Annual Accruals: Process annual accruals for policies set to accrue yearly
- Generate Reports: Create year-end reports showing accruals and usage for the year
Additional Resources
For more information on leave management best practices:
Remember that while our system helps you manage leave accruals, it’s important to consult with HR and legal counsel for definitive guidance on leave policies specific to your business.