Setting up Earn & Claim (Hours Worked) Holiday Entitlement

This article will go through how to set up and manage your earn based on hours worked holiday entitlement. There are two types of earn and claim holiday types:

• Earn Holiday Based on Hours Worked and Claim with a Holiday Request
• Earn Holiday Based on Pro-rata Entitlement and Claim with a Holiday Request   

What is Earn & Claim?

Earn and Claim holiday entitlement means that staff must work a certain number of hours to receive holiday pay rather than instantly having access to all their annual leave.

There are two different ways to approach Earning & Claim entitlement. These are Earning based on Hours Worked OR Earnings based on pro-rata entitlement. This article will  discuss how to set up an entitlement for staff using an Earning based on Hours Worked entitlement.

Earn based on Hours Worked

This type of holiday allows staff to earn holiday based on hours worked and then claim that holiday with a holiday request.  They will then be paid for their days off using their entitlement. This is not a fixed entitlement, and staff can earn more holiday the more they work. 

We will now go through how to set this up. 

Step 1

First, you want to choose your holiday entitlement.

To do this, go to Pay > Contracts > Manage Contracts to find your holiday options. Then, go to the Holiday tab of the contract to which you want to apply these holiday rules.

Under the Earning Holiday option select Earn holiday based on hours worked and claim with a holiday request. This will then show opens unique to this type of holiday entitlement.

From here you can select how staff can request holiday, if they can request to take off hours during the day or if if it needs to be in at least half day blocks.  You can also set up whether or not staff can make claims for hours not yet earned, assuming they will earn enough over the year. Only earned hours will be claimed, so they cannot be paid more than earned.

Additionally, you are able to add any dates that you want to block out or any additional holiday entitlements from here.

Step 2

Once you have set these details up, the next step is to create a Holiday pay element. You must create a holiday pay element for this type of holiday entitlement.

To do this, Pay > Pay Settings > Pay Elements > Create a New Pay Element.

You will then add details and set this up like a normal pay element, including whether you want to include this element in wage sheets. Set the holiday pay rate here, it will probably be the same as your normal pay rate for the position. 

The most important part is to mark this as a hidden pay element so that it won't appear as an option that managers can manually assign to skills.

Step 3

The next step is to create the hours worked pay element, i.e., the regular hourly rate for the position and add a monetary value. It is helpful if you name your pay element and holiday pay element something relating to the skill it will later be assigned to. 

Once this has been completed, you need to enable the Percentage Holiday Pay Element option and select the holiday version of the pay element.

Then, in the Holiday Pay Percentage box, you need to add the holiday percentage that must be accrued for each hour worked. A common example of holiday pay would be 12.07%, which is the mandatory amount of statutory annual leave for each working week of the year. This means that for every hour worked, a percentage of that hour will be added to holiday allowance pay.

Step 4

You must then add these newly created pay elements to the skills to which they are relevant. Use Staff > Staff Settings > Staff Skills > Edit Skill to do this. Then, under the pay tab, choose the Default Hourly Pay Rate option. This should be a new pay element that has the holiday pay element attached.

Once the pay elements have been attached to the skills and assigned to shifts, the shifts will be converted into time entries.

The holiday hours are then added to the staff member's profile so they can make requests.

It is worth noting that any new holiday allowance that has been earned will only appear once a wage sheet has been run, as this is when a time entry has been marked as finalised.

Step 5

Then, all that’s left to do is request their holiday, which is sent to their line manager for approval. If set up in the system, staff can now set their holiday request down to the number of hours they want to claim when reviewing it.

It is important to note that if you cannot use your entitlement when you try to book a holiday and have chosen the deduct via working pattern option, check that you have also set up your working pattern first!

Once the request has been approved, the holiday will appear on the timesheet. When the holiday shows on the weekly timesheet, it will show a time entry for every holiday time entry that has counted towards the hours they have requested off.