Covid 19 and the affect on earning leave

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sarahh02
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Covid 19 and the affect on earning leave

Hi there,

During the first level 4 lock down in NZ we used the Covid19 subsidy and the company topped up the payments to  staff to 80% of their normal pay.  This came into affect on 25th March.  We began paying 100% but still with subisdy until after the second lockdown in Auckland.

My question is how would paying only 80% of the wages to these staff affect their leave calculation.  I have had a question suggesting that the number of hours due by xmas 2020 does not appear to be enough.  Is this something that may have been caused by the the 80% payment.?

I can provide more detail, but I am wondering if I am on completely the wrong track.

Thanks Sarah

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Steven_M
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Re: Covid 19 and the affect on earning leave

Hi @sarahh02 

 

Annual leave is paid out based on the average weekly earnings or ordinary weekly pay of the employee and will be using the higher value.


In terms of situations where you have paid less than the employee would normally earn, such as a wage subsidy, this would have reduced the average weekly earnings for that employee. As a result, there will be a higher chance that any future leave paid out will be done at the ordinary weekly pay.

Kind regards,
Steven

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sarahh02
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Re: Covid 19 and the affect on earning leave

Trying to explain this to an employee, who only sees that they didn't necessarily have the hours at the end of the year that they think they should is complex.  They are seeing only that it is not quite 4 whole weeks of leave available.  Is this wrong?  Should I have adjusted the leave hours?

 

Steven_M
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Re: Covid 19 and the affect on earning leave

Hi @sarahh02 

 

Annual Leave in New Zealand is a very complex situation and there are many aspects that go into it. 

 

Provided a Common Anniversary situation has not been set up, the annual leave entitlement value listed in the employee's leave details would have rolled through when completing the annual anniversary rollover. It should be noted that if the employee has taken leave when they didn't fully accrue any, commonly occurs in their first year of employment, it will cause the entitlement to go into a negative situation at the time, which in turn, will impact the number of hours available to the employee after the anniversary rollover.

 

If you feel that the annual leave available for the employee is not correct, I would recommend determining what their annual leave should be - annual leave entitlement values through the years multiplied by the number of holiday anniversaries less any leave taken. If this is not the Annual leave due as at value, you could look at updating that leave value to be the required amount.

Kind regards,
Steven

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sarahh02
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Re: Covid 19 and the affect on earning leave

Thanks Steve how does one determine "annual leave entitlement values through the years" for an employee of 5 years +?  We are using AccountRight Plus Payroll I am not sure how to extract this information from the system.

Cheers

Sarah

Steven_M
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Re: Covid 19 and the affect on earning leave

Hi @sarahh02 


The annual leave entitlement through the years would be the value that is listed in the Annual leave entitlement field in the Leave Details tab of the employee per holiday anniversary period for that employees' employment. The Annual leave entitlement is based on the normal hours per week of the employee.


For example, if the employee's normal hours per week for the period of 01/08/2015 - 30/08/2017 were 40 hours the annual leave entitlement would be 160 hours per year (40 x 4) or 320 for that period. On 01/08/2017 the employee dropped down to half the number of hours to 20 per week for their normal hours, the current annual leave entitlement for those years would be 80 hours per year (20 x 4). As such up to their last anniversary 01/08/2020, they have had 160 + 160 + 80 + 80 +80 = 560  or 2016 annual entitlement + 2017s + 2018s + 2019s+2020s.

 

Note: If the employee has worked various normal hours per week frequencies of their employment these are not retained by the system.

Kind regards,
Steven

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