Companies all around the world use different variations and combinations of rules/regulations to prepare their own 'Leave Policy'. At sumHR, we've tried to cover all kinds of possible policy rules that could exist, in order to provide a feature-rich leave policy management system for our customers.
Based on our current leave policy features, here is a list of all available rules in sumHR (you can find these rules when you go to the "Create Leave Policy" page):
- Leave Policy Name: Each leave policy in sumHR, is a type of leave. Hence, each type of leave should have a unique name.
- For example: Sick Leave, Casual Leave, Paid Time Off, etc.
Description: This is an optional text area, where you can specify any additional/important information regarding the particular leave policy you're creating.
- Number of leaves per year: Here you need to specify the maximum annual leave credit a person will be eligible to, every year.
- For example: if you would like to give every employee a total of 24 Casual Leaves in a year, you need to mention 24 here.
Restrict to Gender: This option lets you choose if this particular leave policy is specific to a gender. Depending on which gender you select here, only employees of that gender will be eligible for this leave policy.
- Restrict to Department, Employee Type or Office Location: This is a very useful option, if you'd like to give different types of leaves for different set of employees in your company.
- For example: You wish to give all 'Sales Department' employees 24 Casual leaves, and all other employees will receive 12 Casual leaves. In that case, you must create 2 leave policies, can call them both Casual leave. However, in the Casual leave with 24 annual leaves, you must select 'Sales Department', while in the other Casual leave you must select all other departments.
- Leave becomes valid after how many months? (Probation period): Here you can specify the number of months from joining date after which an employee can be eligible to apply for leaves (months after which employee will see leaves in his account). This is generally the probation period of the employee.
- For example: an employee joining your company is under probation for 3 months, and only after completing these 3 months can he/she apply for this leave. In such case, you must specify the number 3 in this field.
Maximum leaves allowed in a month?: If you would like to limit the number of leaves an employee can apply for within a calendar month, you can specify that limit here. If the employee tries to apply for a leave duration greater than this number, the system will disallow the application with an appropriate error message. Leave this 0 if you don't want any limit.
Maximum 'consecutive' days allowed?: If you would like to limit the number of 'consecutive' leaves an employee can apply for within a calendar month, you can specify that limit here. If the employee tries to apply for a leave duration greater than this number, the system will disallow the application with an appropriate error message. Leave this 0 if you don't want any limit.
- *Different between 'Maximum leave in a month' & 'Maximum consecutive leaves in a month' is, the former applies to any number of separate leaves applied in the same month. While the later refers to 1 particular leave application which exceeds x number of consecutive days in the same month.
Unused leaves can be carried over, every?: This is the annual cycle which you follow for calculating and refreshing leaves every year. Most companies follow a calendar year (Jan to Dec), but some also follow the financial year cycle of their respective countries.
Status: Whether this leave will be enabled (activated) or disabled (de-activated) for now.
- Pro-rated: Generally, when a new employee joins in the during (in the middle) of a annual leave cycle, companies don't prefer to give them the same leave credit as any other employee who has joined earlier would get. To keep it fair, companies pro-rate the leave credit for every employee, based on their joining date and the number of months remaining in the current annual leave cycle.
- Active: Selecting this option means, company wishes to 'pro-rate' leave credit for every employee depending on their joining date (as explained in above example)
For example: Let's say the company offers 24 Casual leaves annually, and follows the Calendar cycle (January to December). Employee A has joined on 1st December of (previous annual leave cycle), and Employee B joins on 1st June (of current annual leave cycle). This means, the Employee A will be joining the annual leave cycle right from the start (1st January). While the Employee B will be joining mid-way through the annual leave cycle, on 1st June.
Which means, Employee A will be covering more time in this annual leave cycle than Employee B. Hence, in such cases, the company may want to give more leave credit to the Employee A owing to his presence through the beginning of the annual leave cycle, and provide a 'pro-rated' leave credit to Employee B depending on the number of more months left in the current annual leave cycle, from his/her date of joining.
Disabled: Selecting this option means, irrespective of the joining date of the employee, every employee will receive the same leave credit for the annual leave cycle.
Accrual: Once you have set the options for how many leaves will be given in each annual leave cycle, and whether they will be pro-rated or not, now it's time to decide how this leave will be actually 'credited' into the employee's account. What this means is, let's say Employee A is supposed to get 18 leaves into his/her account for this year. So, will these 18 leaves be credited in equal parts every month or will they be credited 'all at once' on the date of joining itself.
Let's see what each of the Accrual options do:
- Active: if this option is chosen, sumHR will divide the number of leaves Employee A is eligible to (18 in this case) with the number of months left till the end of the current annual leave cycle.
For Example: Company follows the Calendar year cycle for leave calculations, and Employee A is supposed to get 18 leaves this year. If his/her joining date is 1st June, then the number of months left for this year from the date of joining is 7 (from June to December). So, monthly accrual amount will be 18/7 (number of leaves, divide by, number of months left) = 2.57. Which means, starting from June, every month 2.57 leaves will be credited to the Employee A's account.
If you select Active, you will get further 2 options, as below:
- Credit at beginning of month: selecting this option will mean, 2.57 leaves will be credited for every month, at the beginning of that month itself. For instance, credit for June will be added on 1st June itself.
- Credit at end of month: where as, this option will mean that credit for the current month, will be added after the end of the current month (at the beginning of the next month). For instance, credit for June will be added on 1st July.
- Disabled: This option simply means, all the leaves that Employee A is eligible to, will be credited 'all at once', right from the date of joining.
- Half Day: This rule is quite simple. It lets you decide whether you would like to allow Half-Day leave applications for this particular leave policy or not.
- Allowed: If you enable this option, sumHR will allow employees to apply for Half-Days using this leave policy
- Not Allowed: will mean, any attempt by an employee to apply for a Half-Day using this leave policy, will throw back an appropriate error
Unused Leaves Carryover: This is an important policy option which allows the company to define rules about 'if and how' will any unused leaves be carried forward to the next annual leave cycle.
- Active: selecting this option means, you wish to allow carrying forward of any unused leaves to the next annual leave cycle - at the end of the current annual leave cycle. Once you choose the Active option, you have to further define:
- Carry forward all: if you select this option, all remaining unused leaves will be carried forward to the next annual leave cycle
- Carry forward only: select this option will mean, you can further choose 'how many unused leaves' will be carried forward
- Fixed number: here you can specify a fixed number, which will be treated as the maximum allowed unused leaves to be carried forward.
- For Example: the fixed number defined is 10, where as Employee A has 20 unused leaves remaining balance in his/her account at the end of the annual leave cycle. In this case, sumHR will carry forward only 10 of the 20 remaining unused leaves into the Employee A's next year's annual leave balance
- Percentage: here you can specify a maximum % (percentage) of leaves to be carried forward from the remaining unused leaves
- For Example: if we take the above case, Employee A has 20 unused leaves remaining at the end of the current annual leave cycle, but the percentage is set at 25%. In this situation, sumHR will carry forward only 25% of 20 unused leaves, which comes to 5 leaves, to the employee's next annual leave balance.
- Remaining leaves: this option lets you decide how to treat the remaining leaves (left over) over and above the Fixed number or Percentage amount.
- whether you'd like to "Discard" them or "Pay" for them
Intervening Holidays: Intervening holidays are basically non working days. They can be either Public Holidays which you have defined in the holidays list of your company, or they could be designated weekly-offs. Now, this option lets you define whether you would like to count any public holidays and/or weekly-offs also as leaves - when they fall in between the From date and To date of the leave application
- Active: if you choose this option, you're essentially instructing sumHR to count intervening non-working days as leaves, if they fall in between the From and To dates of a leave application. However, you might want to decide whether you want to count Public Holidays or/and Weekly-Offs, which appears in the next option of choices
- Count Public Holidays: checking this box will mean you wish to count intervening public holidays as leaves
- Count Weekly-Offs: checking this box will mean you wish to count intervening weekly-offs as leaves
- Disabled: this option will let you ignore any public holidays or weekly-offs falling in between a leave applications' From and To dates. Leaving them as is.
Applying for Previous Dates: This option lets you choose whether an employee can apply for past dated leaves in this particular leave policy. Which basically means, if an employee has not applied for this leave in advance, and still does go away on leave. Can he/she return to work later and then apply for the already taken leaves? That's what you can control from this option. Generally, companies prefer to keep this option enabled in case of Sick leaves (for sure), Casual leaves (often), but never for Vacation/Earned/Privilege leaves.
- Active: choosing this option will mean, employees can apply for this leave with past dates up to 30 days from the date of application.
- For Example: Today is 1st June and Employee A applies for a Sick Leave which he/she took on 23rd May. sumHR will let the application go through, as this rule is Active.
- Disabled: choosing this option will mean, no one in the company (including the top management), will be able to apply for past dated leaves.
- Clubbing with others: This is an interesting and often useful option for companies which provide flexibility in their leave policies. Using this option, you can choose whether an employee can take 2 different types of leaves next to each other (back-to-back).
- Active: If you select Active, you're instructing sumHR to allow employees to apply for 2 different leaves, next to each other.
- For Example: Employee A applies for Casual leave from 4th June to 5th June. And then applies for a Sick leave from 6th June to 7th June. May be he/she does this because he/she doesn't have enough Casual leaves left in his account or may be he/she genuinely was unwell and needed rest from work after the 2 casual leaves he/she already took. If you have chosen the Active option, sumHR will allow the employee to apply for this leave.
- Club with any available Leaves: This option means the employee can choose to apply for any type of leave, next to this particular leave. If you select this option, the employee would be able to apply for any available type of leave, next to this particular leave he already has.
Club with only select Leaves: here you will get a dropdown with a list of your existing leave policies (which are already created). You can choose which of the listed leaves can be clubbed with this leave policy (you can multi-select more than one leave by pressing CTRL while clicking)
- Disabled: if you select this option, employees will not be able to apply for a different type of leaves, on dates before or after the duration of the leave you're creating.
Over Utilization: This is a powerful option, which let's you decide whether you'll allow 'exceptions' in leave applications or not. Basically, there may be several times when employees may need to apply for leaves which exceed their eligible quota, or are not within the policy framework (breaking any policy rule). During such times, do you wish to allow an employee to be able to at least apply for the leave or not. Whether the leave application will be approved or not, is not within the control of the policy, as that's a manager's prerogative.
- Active: if you choose this option, you're instructing sumHR to allow any employee to be able to apply for leaves which are exceeding his/her available balance, or which are breaking/crossing any policy rules. If you select the Active option, you need to specify how you wish to treat these exceptions by default (manager can override this default setting, for each leave application):
- Paid Leave / Same Leave: selecting this option means, by default, every exceptional leave application will be treated as paid leave and will result in deduction in leave balance, even if it means going in negative.
- For Example: Employee A has 2 Casual leaves in his/her balance and he/she applies for 4 days Casual leave. If the manager approves this leave application, sumHR will accept the leave application and deduct 4 leaves from the 2 balance. Which will result the following calculation: 2 - 4 = -2
- Unpaid Leave: if the manage approves an exceptional leave application, by default sumHR will treat every exceptional leave application as Unpaid.
- For Example: Take the same example in the last point. The result will be 4 Unpaid leave. However, here the employee can still take 2 paid leaves by making two separate leave applications, or 2 days each. So, that sumHR can treat first 2 days legitimately as paid leave and the next 2 days as Unpaid
- From other leave: this gives you further flexibility to decide, in exceptional cases where leave applications exceed their available balance, sumHR can reduce/use leave balance from any 1 of the other available leaves in the employee's account.
- For Example: Continuing from the above example. Let's say, you have selected Sick leaves as the second option which should be considered when employee runs out of his/her Casual leave. So, in this case, if the employee's 4 days Casual leave application is approved (when his available balance is 2 Casual leaves), sumHR will automatically deduct the 2 extra days from the employee's Sick leave balance.
- Further, you also have the option to decide "what if there is no balance in the secondary leave also?"
- You can decide either to Discard it, which means ignore it and leave no trace of it, OR Count leaves as Unpaid.
So, finally this concludes the huge list of our extensive leave policy features. Yes, it's quite a long post with lot's of details but this is just a collection of all the possible info you would need. You may or may not need to refer to each of the points if you're already familiar with these leave policy concepts from HR point of view.
But with the size and length of this article, you may be able to gauge the amount of flexibility and customization options our product, sumHR, offers you as an HR Administrator of your organization.
What's more, we're always open to add to this list with even more enhancements if there's absolutely anything missing. :)