Payroll - Staff with fluctuating hours and annual leave

[OfficeFB]

Hi

I have just rolled over 8 of my staff for the new annual leave year and have had to do a lot of manual calculating for annual leave. Most getting less annual leave than is allocated in hours/days as they have not worked required days.  They are all set at different annual leave rates eg 160, 140 etc.  I have only one staff member that works the same hours every week.   I am using MYOB payroll, entering via Timesheets.

I feel I am doing a lot of manual calculating and need to know if the way I am doing it is the correct set up for these type of employees. 

They are all employed to work a minimum of 30 hours a week, most work on average around 37.5 over the year. (Some weeks 42 hours and some 35 hours) Though some dont turn up (regularly), some are sick and have used up all their sick leave. and it is because of this I am having to adjust annual leave every year, as I have found MYOB Payroll wont pay below the hourly rate for annual leave, even though they haven't worked the required hours.

1. Am I using the correct method for annual leave for staff with fluctuating hours?
2. Do I need to use the Unpaid leave tab for every day they dont turn up and are not paid annual leave?
3. I have read the support note 'Decreasing an employee's normal hours part way through a year' and 'Making the required adjustment' and feel this is a lot of work, to have to do every year to  1 -work out and adjust the hours and 2 adjust the annual leave $
   
4. What is the best way/report to calculate hours worked over the year to work out their annual leave allocation - at the moment the best way I have found has been by using their gross earnings (via holiday year)

Many thanks

[Steven_M]

Hi @OfficeFB

To deal with employees that have fluctuating hours I recommend taking an average over a period. This gives you an average amount of hours the employee has worked over a period of time. Personally I find taking an average at the start of employment (sometimes estimated), middle of the year and just prior to holiday anniversary roll over is suitable, however it is up to the business as to when they do it. By taking an average over a period you are not constantly having to update the normal hours per week and hopefully save yourself some time.

The way I suggest taking an average is by running the Reports>>Period Reports>>Pay Code Analysis. You would run this report for the pay codes that you commonly use to pay hours i.e. ORD, select the individual employee you want to report on and a suitable period. I suggest 10 weeks just because the calculation is easier but you might want to change it to be 12 weeks or 3 months, its up to you) Once you have run that report the last page will give you a total of hours (in the Quantity field). You can use this to calculate the average hours per week worked.

Once you have the average hours per week worked, you can go to the emplopyee's leave detail window. Within this window you would configure the Normal days/week and Normal hours/day box to generate the average hours per week worked in the Normal Hours per week box.

As mentioned I recommend doing this at the start of employment, middle of the year and just before the holiday anniversary update. The holiday anniversary update is the big one, as it uses the Normal Hours per week to calculate the amount of hours the employee is getting its a good idea to make sure it set appropriately. It is totally up to you, how often and when you calculate that average. Of course the more times that you do it the more accurate it becomes but the more time you are spending on it.

By using the average method for calculating those fluctuating hours you wouldn't need to do anything different with your pays i.e. enter unpaid leave when they don't work the required hours. The average calculation will make it come out in the wash. 

Please note that this is what I would recommend other users do have their opinions and how best to handle it. I would welcome other people that do have other ideas or other ways to deal with it to share their experiences.