Exo Tips & Tricks - Summer 2019
Everything you need to know about Christmas leave
It’s that crazy time of year when payroll administrators around New Zealand are madly trying to navigate how to give employees the right pay and entitlements.
To help make life easier, we answer your key questions about closedowns and leave entitlements to make your Christmas a happy one.
There have been a few subtle changes to the Holidays Act, including new updates on the treatment of employees at closedowns and how to manage leave in days versus the legislated weeks. Remember, if you need help with training or consulting, our Professional Services team is here to help you. Find out more.
Check your Holiday Pay setup
Take the time to review your employees’ leave before processing begins. Use Holiday Pay view to check current balance rates. Look out for rates that are too high or too low, anyone with a termination value of zero (if they leave, they may be overpaid) and anyone with no outstanding leave leading into Christmas (will they earn enough in time?).
Plan around holidays
This year’s public holidays are Wednesday and Thursday. So, if you normally process or pay on these days, you’ll need to do it earlier. Let staff know when payment can be expected. It’s always a good idea to process earlier rather than later, as people often schedule payments around payday.
Keeping employees in the know
Make sure employees know what your holiday closure policies are, especially if they’re new or don’t have enough leave to cover the time off.
- Leave in advance: Consider how you will treat overpayments if an employee leaves before they have earned enough leave to cover the advance.
- New employees: Remember that the MBIE clarified Section 34 of the Holidays Act in 2017 to confirm that all staff employed for less than 12 months are entitled to be paid 8% of their gross since their start date to cover all leave at closedown. It’s no longer an option to pay new employees leave in advance during holiday closures, unless it’s in addition to the 8% payment. Be sure to check how this affects you and your contracts.
Here’s a handy checklist of what your employees need to know.
- Closedown rules.
- Last date for timesheets and leave requests to be approved and handed in.
- When pays will go through.
- If paying weekly pays in advance, when any catch up pays will be processed.
Annual Leave cash-ups
Christmas is an expensive time of year so, if you do cash-ups, your team has probably already started asking about them.
Remember, you can only cash up one week of leave outstanding from previous years. Check-out our knowledgebase or the MBIE website to be sure you’re across all the rules.
Christmas leave payment mythbusters
Sort out the myths from the facts with this rundown of annual leave scenarios. Between casual employees, recent annual leave changes, cash ups and closedowns, there are many myths that were once facts, and vice versa.
Myth #1: I can pay out all employees’ annual leave at Christmas and start accruing again in January.
Fact: You can only pay the actual annual leave the employee takes during the Christmas and New Year period. This is usually paid in the pay run that coincides with the leave being taken. Or it can be agreed to be paid in advance as a lump sum prior to the break. Remember, if the annual leave spans more than one pay period, the value you pay the employee (per day/hour) is the same across that whole time taken. You may need to check your rates as you go.
Myth #2: My employees can request to cash up as much annual leave as they like over the Christmas period.
Fact: If you both agree, you can only cash up the fourth week of entitled annual leave. This must be outstanding leave from previous years, and only one week can be cashed up per anniversary year. These knowledgebase articles give you all the whys and wherefores.
If your employee also has a fifth week of annual leave, you can agree to cash up, as it’s over and above the minimum requirement under the Holidays Act 2003. This money should be included in the gross earnings and treated as a lump sum payment. If you do cash up the fourth and fifth weeks, you need to treat these two processes differently, as the gross earnings requirements for both are not the same. If you’re not sure, have a word with our Support team.
Myth #3: I have casuals working up to Christmas and into the New Year so I just need to pay them 8%HP for the time worked.
Fact: Casuals may be entitled to paid Public Holidays if they’ve been working regularly in the lead up to the holidays. Public holidays become relevant daily pay “but for the fact it was a public holiday the employee would have worked that day”. You can find out more at MBIE.
Regularly check your casual employees’ timesheets prior to public holidays. The last four weeks are usually a good indication of whether they would have worked those days. Go back further if it’s not clear. They should be paid at their Relevant Daily Pay or, if that’s unclear, at the employee’s Average Daily Pay.
Myth #4: All new employees take leave in advance when we close down.
Fact: Section 34 of the Holidays Act states that if a closedown happens before an employee is entitled to their four weeks’ annual leave, the following applies:
- The employer must pay the employee 8% of gross earnings to date, less any leave taken in advance.
- The employee’s anniversary date must be rolled one year ahead from the date of payment to a date that falls before the next closedown (one week is usually good).
- You can both agree to the employee taking leave in advance from the next year’s entitlement if the 8% isn’t enough to cover the closedown period.
Myth #5: I pay out all the annual and statutory holidays in a one-off pay prior to closing and do a catch up of the last week’s wages in the new year.
Fact: It’s important to keep your normal pay processing frequency for tax purposes i.e. pay whole pay periods each time and process all payments relating to the correct pay periods. This ensures the average, ordinary and relevant daily pay rates are calculated correctly based on the previous 52 weeks’ earnings or current period when the leave is taken. If you don’t, it can lead to incorrect leave rates.
Myth 6#: We use one date for all our employees’ annual leave to keep everyone’s entitlement the same and reporting and leave management simple.
Truth: This comes down to whether you have a mandatory closedown or not.
Mandatory closedown – you can nominate an anniversary date but it must tie in with the closedown, like a week or two before, for example, and the employee must receive their full four weeks’ annual leave on that date.
No closedown – you can’t nominate a date. The employee’s original start date must be their anniversary date for annual leave each year.
Feature highlight: Report Views
In 2017, we released a very useful feature for Exo Employer Services called Report Views. If you haven’t used it already, Report Views makes it easy to filter information and build customised reports that let you drill down information to exactly what you need to see or share. Something incredibly important when preparing to wrap up the year!
It gives you more flexibility on the fields you show on reports and how you filter and sort data. It also lets you export to a spreadsheet, where you can manage the data any way you like.
These are the four views available in Report Views and how to use them.
1. The Employee View
We recommend Employee View as your main setting as it lets you view all current employees. It’s easily accessed using the first button on your toolbar as highlighted below. Check with your administrator if you’re unable to access it this way.
- Use the filters at the top to see only the employees you need to see.
- Export information to spreadsheets via the Export button.
- Immediately view the pay history of any selected employee via the Pay History button.
- Add or edit employees.
- Add or remove fields and create your own stored views via the Custom Views option in the top toolbar.
- Move columns around simply by clicking on the column header and dragging it where you want.
In Custom Views, hover your mouse over the icons to find the Show/Hide Columns button circled below. Use this function to pull a full list of fields that you can show or hide on the report. Click Save to get your new report
You can save these options for future reports. Click on the Create View button circled below and give your new report a name
Now, when you open the Employee View you can toggle between different sets of Information.
2. The Pay View
We recommend Pay View as your main entry point for current pays and information.
- View information for any pay in the system.
- Create and update pays.
- View information for any open or closed pays on screen, without printing a report.
- Automatically view Paysheet or Reports for the selected pay.
- Filter by date, pay frequency or pay type.
- Create your Employment Information (EI) files.
- Export information shown via the Export button.
3. Holiday Pay View
One of our favorite views, Holiday Pay View makes it easy to get your holiday pay provisioning and payments spot on. Rather than going employee by employee, it lets you create views to export and check everyone at once. Easy!
- Employee balances without dollar figures is handy if you need to provide reports to line managers.
- Employee termination values vs what they would get paid out if they took leave. Lets you see if employees have been overpaid leave in advance – termination value = 0.00.
- Employee rates and pay information. Lets you see if 4-week and 52-week rates are correct and the right setting methods have been selected for each employee.
- Filter by department, cost centre or employment status. You can also sort any field on screen and export that data to spreadsheets.
- View or check the Employee Maintenance screen from this screen using the View Employee button.
Watch our quick tutorial to get the most from Holiday Pay View. Holiday Pay View Tutorial.
4. Bereavement, Alternative, Public Holiday and Sick Pay (BAPS) View
The BAPS view lets you access all information relating to these entitlements
- Check that each employee is set up with the correct rate.
- Use employee balances without dollar figures to provide reports to line managers.
- See employee setup and the history that determines their rates.
You have the same filtering and sorting options as Holiday Pay View, but Custom Views gives you fields relating to these specific types of leave.