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Configuring leave policies: best practices and examples
Configuring leave policies: best practices and examples
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Use case 1. Casual holiday/ vacation leave policy without carryover

Assume you would like to configure casual leave for your employees.

Leave entitlement: Employees are entitled to 2 days of leave monthly on the hire date.

Maximum balance: The maximum balance an employee can accumulate is 24 days. Accrual will stop once the maximum accumulation of 24 days is reached.

Carryover: There is no carryover of unused leave days. Leave days will expire one year after the hire date.

Accrual settings: Days will be accrued proportionately to the hire date, and the first accrual will happen at the end of the accrual period. If the employee joins on the 15th of July, the accrual will take place on the 1st of August.

This leave type can be configured in this manner:

Here's how the leave entitlement will appear in the employee's profile:

- Two days accrue every month on the hire date.

- There is no carryover of unused leave days.

- All accrued leave days expire one year after the hire date if not used during the year.

Use case 2. Usual holiday/vacation leave policy with carryover

Leave entitlement: Employees are entitled to 2 days of leave monthly on their hire date.

Accrual starts: Vacation days during the first six months will be accrued only in the seventh month, with an accrual of 12 days.

Maximum balance: The maximum balance an employee can accumulate is 24 days. Accrual will stop once the maximum accumulation of 24 days is reached.

Carryover: Allow a carryover amount of up to 5 days, which will not expire on the hire date and an employee can use them any time they want. If an employee has 3 days on their balance, it will remain unchanged as 3 days. If an employee has 10 days on their balance, it will be reduced to 5 days.

Accrual settings: Days will be accrued proportionately to the hire date, and the first accrual will happen at the end of the accrual period.

This leave type can be configured in this manner:

Here's how the leave entitlement will appear in the employee's profile:

- If the hire date is May 12, 2022, the first accrual will occur six months later on November 12, 2022, with an initial balance of 12 days.

- Two days accrue every month on the hire date.

- Carryover amount of up to 5 days, which will not expire on the hire date and an employee can use them any time they want. If an employee has 3 days on their balance, it will remain unchanged as 3 days. If an employee has 10 days on their balance, it will be reduced to 5 days.

Use case 3. Usual holiday/vacation leave policy with unlimited carryover

Leave entitlement: Employees are entitled to 2 days of leave monthly on the start of the month.

Maximum balance: The maximum balance an employee can accumulate is 24 days. Accrual will stop once the maximum accumulation of 24 days is reached.

Carryover amount: Carryover is unlimited, all days are carried over forever. Carryover is unlimited, but if the maximum balance is set to 24 days, carryover won't exceed 24 days.

Accrual settings: Days will be accrued in full amount. Even if the employee joins in the middle of the month, 2 days will be accrued. The first accrual will happen at the end of the accrual period.

This leave type can be configured in this manner:

Here's how the leave entitlement will appear in the employee's profile:

- As the employee didn't use the leave days, the accrual stopped once the number of accrued days reached the maximum balance set up in the Maximum balance field. (24 days)

Use case 4. Usual holiday/ vacation leave policy with a carryover on a specific date with up to 5 days of carryover

Leave entitlement: Employees are entitled to 2 days of sick leave monthly on the start of the month.

Maximum balance: The maximum balance an employee can accumulate is 24 days.

Carryover: Carryover up to 5 days and delay carryover by two months. Carryover date is the 1st of January. Leave days will expire up to 5 days on the 1st of March, as we chose two months delay carryover.

Accrual settings: Days will be accrued proportionately to the hire date, and the first accrual will happen at the end of the accrual period. For example, if the employee joins on the 2nd of June, the accrual of 2 days will take place on the 1st of July.

Here's how the leave entitlement will appear in the employee's profile:

- Carryover occurs on the 1st of March (delay carryover by 2 months), as adjusted in the leave policy.

- Up to 5 days can be carried over. In this scenario, the employee didn't utilize 24 leave days, resulting in the expiration of up to 5 days after a two-month delay from the specific carryover date. If an employee has 3 days on their balance, it will remain unchanged as 3 days. If an employee has 10 days on their balance, it will be reduced to 5 days.

- Accrual continues at a rate of +2 days every month.

Use case 5. Usual sick leave policy without carryover

Leave entitlement: Employees are entitled to 7 days of sick leave yearly on their hire date.

Maximum balance: The maximum balance an employee can accumulate is 7 days. Accrual will stop once the maximum accumulation of 7 days is reached.

Carryover: There is no carryover of unused sick leave days. Sick leave days will expire on the hire date in a year. New 7 days will be accrued for the next year then.

Accrual settings: Days will be accrued proportionately to the hire date, and the first accrual will happen at the beginning of the accrual period. For example, if the employee joins on the 2nd of June, the accrual of 7 days will take place on the same date.

This leave type can be configured in this manner:

Here's how the leave entitlement will appear in the employee's profile:

- 7 days accrue yearly at on the hire date .

- There is no carryover of unused leave days.

- All accrued leave days expire one year after the hire date if not used during the year.

The next step is to configure the approvals. You can learn more about best practices for configuring approvals by reading the provided article here.

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