Casual or Part-Time for holiday / annual leave purposes

Highlighted
5 Posts
User

5Posts

0Kudos

0Solutions

Casual or Part-Time for holiday / annual leave purposes

Hi, 

 

To start with we are using MYOB Essentials and our bussiness is operated in NZ.

 

We have one employee that i am not sure which catergory he falls in to. 

 

I have tried contacting Employment NZ but they are very busy atm with this covid-19 business. 

We own a dairy farm and he does jobs for us every now and then and has done for the past 15 or so years but it is when it suits him and us and is not on a regular basis, but is on a continuing basis. So he can sometimes go a couple of fortnights without having any work and then might do 5 hours the next fortnight and 10 the next then back to nothing again for another fortnight or two. So this description suits his work situation perfectly except for this comment "no ongoing expectation of employment"

"‘Casual employee’ isn’t defined in employment legislation, but the term is usually used to refer to a situation where the employee has no guaranteed hours of work, no regular pattern of work, and no ongoing expectation of employment. The employer doesn’t have to offer work to the employee, and the employee doesn’t have to accept work if it’s offered. The employee works as and when it suits both them and the employer. This can sometimes happen because it’s hard for the employer to predict when the work needs to be done, or when the work needs to be done quickly. Each time the employee accepts an offer of work it is treated as a new period of employment." Taken from NZ employeement webiste https://www.employment.govt.nz/starting-employment/who-is-an-employee/types-of-employee/

I would like to classify him as a casual employee and pay him his 8% holiday pay with each pay processed but my mother in law wants him to continue to have his holiday pay paid to him at the end of each year as she thinks he should be classified as a part time employee but with MYOB essentials it says it is not reccommended to use the "The weeks (pro-rata) option is not recommended. To calculate leave accurately, choose the hrs/year (fixed) option." I can't find enough information on how this option works but does it just accumulate 4.8 mins (which is 60mins * 8%) for each hour that is worked?

If anyones know anything about the above your advice would be greatly appreciated.

Thanks Smiley Happy 

Monique 

3 REPLIES 3
Highlighted
MYOB Moderator
37,489 Posts
MYOB Moderator
New Zealand
MYOB Moderator

37,489Posts

5,090Kudos

5,487Solutions

Re: Casual or Part-Time for holiday / annual leave purposes

Hi @JBHIlls 

 

Employment NZ would be the first place I would do in terms of getting your enquiry resolved. They should be able to provide advice on what basis that employee is being paid at. If they are a casual employee, which based on your description it sounds like they meet the criteria, then you would be looking at paying out their Holiday Pay as they go.


From an MYOB Essentials Payroll point of view, if they are deemed a casual employee you would enter them as a Casual in the status, which will allow for the Leave tab to show the holiday percentage. If they are Part-time employee, the annual leave accrual is typically based on the number of hours they would work a year. You can use this to determine the amount of annual leave the employee would accrue each pay (hours worked in a week multiplied by 4 (4 weeks a leave a year). If you would prefer to use the pro-rata calculation, it does still work but as it's a pro-rata value it may not be an accurate value for employees, especially an employee that works less hours.

Kind regards,
Steven

MYOB Community Support

Online Help| Forum Search| my.MYOB| Download Page

Did my answer help?

Mark it as a SolutionHelpful? Leave a to tell others

Highlighted
5 Posts
User

5Posts

0Kudos

0Solutions

Re: Casual or Part-Time for holiday / annual leave purposes

Hi Steven, 

 

Thanks for the reply.

I agree i think he should fall in to the casual category as well. But just so i can explain to my mother in law why we cannot have him as a part time employee in myob and why he needs to be a casual who is paid his 8% with every pay can you please explain the pro rata calc to me a little more.

So if i did set him up as a partime so that he could be paid annual leave when he wanted to take it would the pro rata leave calc not just base its annual leave off the hours actually worked? Would it take in to account his expected hours per week (Which as i explained i have no way of working out as he works on such a random basis) Is there a formula for how this calculation works so i can better understand how the pro rata leave calc works. 

Thanks. 

 

Highlighted
MYOB Moderator
37,489 Posts
MYOB Moderator
New Zealand
MYOB Moderator

37,489Posts

5,090Kudos

5,487Solutions

Re: Casual or Part-Time for holiday / annual leave purposes

Hi @JBHIlls 

 

Help Article: Set up leave would be able to assist with that process and provide you with an overview. 

In short, it takes the hours per week listed on their employee record, multiplied by the number of weeks set as their leave, divided by their pay frequency. For example, say they are listed to work 20 hours a week, have 4 weeks a year they are entitled to 80 hours a year, there are 52 weeks in the year and thus they accrue 1.54 hours a week of leave.

 

Annual Leave in New Zealand is paid out at the average weekly earnings or the original weekly pay whichever one is higher. If you are using the pro-rata method it can cause the system to double-dip in terms of payment of that leave. As in some cases, especially when they work varied hours, they incur the leave on the additional amounts and also increase on the pay amounts. So you are double-dipping at the accrual and the taking of that leave thus it is not the ideal method. If you use the fixed method, which is the recommendation, it removes the double-dipping as they are accruing them at the same rate across the year and the additional hours worked is factored into when they are taking the leave (as that would likely increase the average weekly earnings).

Kind regards,
Steven

MYOB Community Support

Online Help| Forum Search| my.MYOB| Download Page

Did my answer help?

Mark it as a SolutionHelpful? Leave a to tell others

Didn't find your answer here?

Try using advanced search to find a post more easily Advanced Search
or
Get the conversation started and make a new post Start a Post