Overview

Some businesses allow employees to take more leave than they have accrued, resulting in a negative leave balance that the employee has to ‘earn back’ before additional leave is accrued. Other businesses do not allow this, and would prefer the system prevent employees taking more leave than they are entitled to. 

In order to handle both scenarios, a setting is available within the leave categories, which allows each leave category to be configured to either allow or not allow negative balances. Negative leave balances are not prevented at the leave request stage, this is handled when the leave is applied within the pay run.

For a short video on this setting, click here. 

Configure the Leave Category

First, you need to enable the setting in the Leave categories. 

1. Go to Payroll Settings.
2. Select Leave Categories.
3. Select the leave category you wish to apply this new setting to.
4. Tick the box for Prevent negative leave balances. Please note this option will only be visible if the Employee leave Balance is set to Tracked.

5. When the Prevent negative leave balances setting is selected, a drop-down menu shows. This drop-down list contains leave categories that are set to: 'Don't pay for the leave taken' and have the same unit type as the selected leave category.
6. Select Save.

Leave without pay will automatically be applied to any leave that exceeds the available leave balance, at the time the pay run is processed, when the prevent negative leave balances setting is enabled. 

The linked unpaid leave category cannot be deleted when it is linked to another leave category.

Create a Leave Request

When creating a new leave request for a value in excess of an available leave balance, a warning will display advising that the balance cannot go below zero and a portion of unpaid leave may be applied. 

As a manager, when entering the leave details traffic light highlight shows to indicate whether there is enough leave to cover the request. Green shows to denote there are enough hours, red shows where there are not enough hours accrued and orange shows if there are multiple pending leave requests and the available balance will not cover all of these requests. Learn more about creating leave requests here.

Applying leave to a Pay Run

When you open a pay run and there are leave requests that fall within the pay period, the leave requests tab displays at the top of the page, listing details of each leave request. In this view you can see:

• Employee name

• Type of leave requested - leave category associated with the leave request
• Dates of leave requested - by default the last day aligns with the pay period end date and the first day aligns with the leave request start date
• Unit type for leave requested - unit type associated with the leave category
• Number of units requested - the units requested are the total units requested on the leave request, even where the leave request spans multiple pay runs. If the leave request spans the current pay run, the leave request dates will display beneath the first and last day columns. 
• Units to apply to pay run - units to apply to the pay run aligns with the first and last day dates entered. This value can be edited up to the 'units requested' value, or where partial units have already been applied in another pay run, the balance of units left to allocate. If a partial amount has been applied in another pay run, the units that have already applied will display beneath the units requested column.
• Units paid within pay run - calculated value based on 'units' applied to pay run. If prevent negative leave balances setting is enabled, paid units will not exceed the available leave balance. Values in excess of available leave balance will be allocated to 'units unpaid'. If the setting is disabled, the full amount will be allocated as paid units.
• Units unpaid within pay run - calculated value based on 'units' applied to pay run. If prevent negative leave balances setting is enabled, unpaid units will be the balance of the units applied that exceed the available leave balance. If the setting is disabled, there won't be an unpaid portion. 
• Status badge – when an action has been applied to a leave request a status badge displays to the left of the actions button. The following status’ may be displayed:
• Applied – displays when a component of the leave request was applied and the balance has been marked as manually applied.
• Partially Applied – displays when a component of the leave request has been applied and there is still a balance remaining to allocate.
• Fully Applied – displays where a leave request has been fully applied. The leave may have been fully applied in this pay run, or the balance of the leave request applied in this pay run.
• Previously Applied – displays where the leave request was fully applied in a previous pay run.
• Manually Applied – displays when the leave request has been marked as manually applied and no leave has been allocated in the pay run.
• Pending Approval – displays when a leave request hasn’t been approved.

When leave is applied to the pay run, the paid and unpaid unit values are added as leave taken and earnings lines (if relevant) within the employee record in the pay run. Employees taking leave for a leave category which prevents a negative leave balance may have both an unpaid and paid component, whereas if they are taking leave for a leave category which doesn't prevent negatives, they will only have paid units and could have a negative balance that must be ‘earned’ back. 

Note: where an employee is set to accrue leave based on hours worked or leave is applied via a timesheet, the leave accrual for the current pay run is excluded from the available leave balance for the purpose of applying the units paid and units unpaid. This can result in a positive leave balance when the pay run is finalised, even though there may be a portion of unpaid leave allocated.

If you have any questions or feedback please let us know via support@yourpayroll.com.au