Automatic Extension of Holiday Anniversary

As per the Holidays Act, PayHero will automatically give employees four weeks of Annual Leave when they cross their leave anniversary each year. But what happens if the employee has had periods during the year when they have not been working?

One common situation is where employees take extended periods of unpaid leave. How to handle this is described here: Unpaid Leave

Another scenario is common in labour hire and horticulture. If an employee has two months between assignments where they are not working, how do you adjust their leave so they don't receive four weeks when they only actually worked ten months?

This can be handled in PayHero by extending the leave anniversary, deferring the date when they receive their entitlement. 

Note that if you are extending anniversaries, you need to ensure this is covered in your employment agreements.

We would recommend seeking guidance from an employment lawyer to ensure this is handled correctly. At minimum, this is likely to involve defining non-continuous employment and a clear understanding of what will happen when employment is non-continuous.

How do I extend the leave anniversary? 

You could manually change the anniversary by editing the employee. However, if you have many employees, this becomes very difficult to keep track of.

PayHero can make these adjustments automatically. PayHero support can set up your company so that if an employee is excluded from a number of pays, when they are finally included in a pay again, their holiday anniversary will automatically be extended.

Simply reach out to support@payhero.co.nz, letting us know the number of days you want to use as a buffer. Only if employees are excluded for more than this number of days will the holiday anniversary be changed. For example, if you elect this to be set to seven, the effect will be the same as Unpaid Leave, where the first week of non-work has no impact on the leave anniversary. Thus, an employee with four weeks between assignments will only have their leave anniversary extended by three weeks.

Note that employees must be excluded from pays (rather than being included in the pay with zero earnings) to trigger the extension. The easiest way to do this is to use Exclude Zero Pays under the options button when on the Payroll > Review tab, or Remove Zero Pays when editing a draft pay.

If an employee is paid after a period of non-work, the following line will be added to their pay. In this example, the anniversary is being extended by 14 days:

Also, a warning in the pay will inform you that the leave anniversary is to be extended.

What about public holidays?

Take care if you have automated public holidays enabled. When looking at a review period, employees who haven't been at work will still be considered to have worked for the purposes of determining Otherwise Working Days. You may want to remove these employees from the pay. To identify them, you can use Insights and run a report using the Pay Detail table, filtering on Pay Item to Non-Continuous Employment.

What about sick leave? 

If extending holiday anniversaries, you will probably also want Automatic Extension of Sick Anniversary.

What if an employee finishes rather than returning after an absence?

Employees who haven't worked for you in a while should not have the extension applied, as they should receive their Final Pay based on when they last worked for you. To achieve this, create a One Off Pay covering the last period they were genuinely paid for, add the employee to the pay, and set this as their Final Pay.