Personal Leave Accrual Changes from Sep 2019

Jade_8243107

Hello. 
I got an email (From Employsure) recently stating there are changing to the way Personal Leave Accrual is calculated. 

In summary: (Quoted from the email so "this" = Personal Leave) 
• this leave is not pro-rated for part time employees, meaning part time employees are entitled to the full 10 days per year regardless of how many days or hours they work per week
• this leave must be accrued, and taken, in days (rather than hours, as is common practice)

Has anyone else received notice of this change? 

I have been able to calculate and transfer the amounts current eligible from hours to days. However, I'm sure on what I need to change in "Accrual Period" and "Hours accrued per hour paid" boxes. Can someone please advice me? 

 


Thank you

Acctd4

Hi Jade

 

I’ve had a read of the Fair Work update info on this (pasted below) on their website & can see why the wording of this has caused mass confusion:

This is what it says .... 

In the decision, the majority of the Full Federal Court determined:

1. Full-time and part-time employees are entitled to 10 working days of paid personal/carer’s leave for each year of employment.

2. The leave protects those employees’ income when they are entitled to be absent from work due to illness or injury (or providing care or support to a family or household member who is ill, injured or suffering from an unexpected emergency).

3. The leave must be calculated in working days, not hours. A working day is the portion of a 24 hour period that an employee would otherwise be working.

4. An employee’s entitlement is expressly based upon time working for the employer and is expressly calculated in days.

5. For every day of personal/carer’s leave taken, an employer deducts a day from the employee’s accrued leave balance. If an employee takes a part-day of leave, then an equivalent part-day is deducted from the employee’s accrued leave balance.

& this is what it means .... 

1.  Note FW’s emphasis on the term “Working Day” (not just “Day”)

An employee’s “work day” is their normal ordinary hours (whether that be 5 hours or 10 hours).  When an employee takes personal leave, they must be paid the same number of hours that they would be paid for if working that day.

2.  Applies across the full entitlement of personal leave scenarios

3.  “Working Day” definition  (See 1. – As clarified, a “working day” is the employee’s ordinary hours for that day)

4.  The basis (“time working”) relates to the fact that an employee’s work day can be longer or shorter than the standard (“ordinary”).  The requirement for calculation in “days” simply refers to the fact that if a permanent employee works more or less hours, their leave is accrued/paid based on this eg a part-time employee works 3 days p/wk @ 5 hrs p/day.  That employee is STILL entitled to the same timeframe (eg 2 weeks) however, this would be pro rata’d to 3 x 5-hr days per week (so 6 x 5-hr days out of the standard 10)

5.  (Although confusingly worded!) “Every Hr” accrual/taken achieves this outcome eg If an employee works an ordinary 10-hr day, they would have accrued leave on those hours & when they take a day off, they will be paid hourly leave based on a 10-hr day

 

The reason for the FW emphasis on the word “days” is because in the recent case that set this precedent, the employee worked longer days (more hours) than the standard “ordinary” (7.5 or 8). 

Because his leave accrual - & pay - was only based on the equivalent 10-days of ordinary hours, he was accruing & getting paid less when taking a sick day than he would otherwise earn when working that day.

 

As long as you are accruing leave “Every hour” (as your screenshot shows) for all ordinary hours, you will be adhering to this update as it calculates the same outcome.

 

You’ll find more info on here in this recent thread:

https://community.reckon.com/reckon/topics/new-sick-leave-laws

 

 Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

(Specialising EXCLUSIVELY in Reckon Accounts / Reckon Accounts Hosted)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

www.accounted4bs.com

IRRIGEAR LOWOOD

Hi Shaz.  We have a full time employee who is currently away sick, a lot.  With the Personal Leave Accrual Period being 'Every Hour' worked, would this cause less PL accruing than entitled?  Ie:  Works only 19hrs for the week.  The PL accrued would only be on the 19hrs?  Or is it accrued as per the 'Weekly Hours' input in the 'Employment Info' tab in the Employees profile?
Thanks, Carly.

Acctd4

Hi Carly

 

Leave still accrues on Leave (Personal, Annual & Long Service) so if you’re paying 19 hours (Worked) + 19 hours Personal Leave, the employee should still be accruing the same amount of leave.

 

This accrual should be configured on the Leave Item(s) as shown here:

(Obviously, once an employee has used all of their available Leave it’s at the employer’s discretion as to whether the employee can continue being paid/go into negative)

Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

(Specialising EXCLUSIVELY in Reckon Accounts / Reckon Accounts Hosted)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

www.accounted4bs.com

IRRIGEAR LOWOOD

I've double checked, yes we have that ticked.  Thanks.
Yeah, he's currently using the few hours of accrued each pay cycle, and then having reduced wage due to no other holiday/leave/etc owing to him.
Thanks for your help.  It is appreciated
Carly.

Acctd4

You’re very welcome Carly

 Just to confirm, when Leave accrual is set to “Every Hour”, the input of the HOURS (worked & Leave) on the actual Paycheque is what drives this to increase/reduce accordingly.

(NB The “Weekly Hours” field on the Employee record is an info-only manual-entry field, it doesn’t link to/impact any other area)

Shaz Hughes Dip(Fin) ACQ NSW, MICB

Reckon Accredited Professional Partner Bookkeeper / Registered BAS Agent (No: 92314 015)

(Specialising EXCLUSIVELY in Reckon Accounts / Reckon Accounts Hosted)

Accounted 4 Bookkeeping Services

Ballajura, WA

0422 886 003

shazinoz2@bigpond.com

www.accounted4bs.com

Michelle Weatherley

Hi Shaz
Can you please clarify your comment
"..... a part-time employee works 3 days p/wk @ 5 hrs p/day.  That employee is STILL entitled to the same timeframe (eg 2 weeks) however, this would be pro rata’d to 3 x 5-hr days per week (so 6 x 5-hr days out of the standard 10)"

My understanding of the new legislation was that Part Time workers are now entitled to 10 days of Personal Leave paid regardless of the number of days they work each week? No more pro rata.
We have 4 part time workers and have been accruing PL based on their number of hours worked each week however with the new legislation I now have to accrue 10 days per year (paid according to their normal hours worked per day). So if a worker works 4 days per week for 6 hours each day then I will need to ensure the Personal Leave accruals equals 60hrs per year (based on 6 hours per day )
1. Full-time and part-time employees are entitled to 10 working days of paid personal/carer’s leave for each year of employment.

If you can please confirm this or clear this up I would be grateful. I am currently in the process of converting accruals to days.

Thank you
Michelle