- Background
- Set up a leave policy that calculates average working hours
- How does it work?
- Partial day leave requests
- Additional notes
Background
Most workers are entitled to 5.6 weeks’ paid holiday a year (or the pro rata equivalent, if they are not full time workers) and a week’s pay is worked out according to the kind of hours someone works and how they’re paid for the hours. This includes full-time, part-time, term-time and casual workers.
| Working pattern | How a week's pay is calculated for leave |
| Fixed hours and pay (full or part time) | The worker's regular pay for the week |
| Shift work with fixed hours (full or part time) | The average number of weekly fixed hours a worker has worked in the previous 52 weeks, at their average hourly rate |
| No fixed hours (casual and zero hour contracts) | A worker’s average pay from the previous 52 weeks (only counting weeks in which they were paid) |
For the purposes of calculating the average pay from the previous 52 weeks:
- A week usually runs Sunday to Saturday unless the pay is calculated over a different 7 day period.
- If no pay was made in any week then you can count back another week so the calculation is still based on 52 weeks in which pay was paid. You can count back a maximum of 104 weeks to find 52 paid weeks.
- If the worker has less than 52 weeks of paid work you can use the average pay for the weeks they have worked.
When creating new leave policies in Deputy you can configure leave policies to assist you to comply with the UK government's requirements for calculating holiday entitlements including for those workers without fixed hours such as casual work or zero-hour contracts.
Set up a leave policy that calculates average working hours
To set up a leave policy in Deputy that calculates average working hours for your workers that are not on fixed hours or on 'Zero Hour' contracts:
1. There is already a set of default leave policies created in your Deputy account including one policy with the suggested configuration for calculating average working hours for your team member called:
- UK Holiday Policy (Zero-Hour)
You can use this default Zero Hour policy as a starting point to edit and configure to suit your organisation's requirements or set up a new policy yourself if that is preferred.
2. Scroll to the Addition options section of the leave policy and click to select Calculate average working hours.
This setting defaults to calculate using shifts from the past 52 weeks but if it finds that some weeks in the past 52 did not have any paid work for a team member then it will look back as far as 104 weeks to find the most recent 52 weeks of containing paid work to calculate the average working hours. These default values align with Deputy's interpretation of UK legislation but we encourage you to consult with your own legal counsel about the requirements that apply to your business and edit these fields in Deputy accordingly.
Once you have set up and saved the leave policy don't forgot you need to assign it to your relevant team member's profiles.
After the team member has five timesheets that are pay-approved in Deputy then the average working hours will begin to be calculated for this leave policy.
How does it work?
Team members requesting leave from a leave policy set up to calculate average working hours will assign it to their manager as usual.
The manager, when approving leave, will see that Deputy has calculated the length of the average working day and will display this as shown in the example below where Sam has requested a day off and Deputy has calculated this amount to 5 hours and 20min.
You will see in the example below that the start and end time of the leave request is 'greyed out' and the manager will be unable to edit the start and end times of the leave or length of the day of leave since this average day is calculated by Deputy and is just an estimate until the day of leave is taken. Do you need to edit the start or finish time to approve a partial leave day?
You will see there is a tooltip available when you hover over the clock icon next to the hours. This reminds managers that the total hours per day has been calculated based on the past 52 weeks of pay approved timesheets and this number could possibly change between the time the leave request is approved and the date the leave begins.
The UK legislation stipulates that the average working hours calculation is applied on the first day of leave. Therefore if the team member works significantly different hours in the time period between the leave being approved and the leave being taken then the average hours calculation will change.
You can see the final hours that were calculated (on the first day of leave) in the Approved Timesheets tab.
Note: the time on the Leave Request is displayed in the format of Hours and Minutes whereas the time on the timesheet displays hours as a decimal.
eg. 5 hours and 22mins = 5.37 hours in the above screenshot.
Partial day leave requests
Team members who do not wish to take a whole day of leave but instead just a part day of leave can still submit leave requests to do this.
To do this they need to select the start and finish time of the leave when they pick the date for the leave request.
When the manager approves this leave request that does not have the All day box ticked, they are able to review and select/amend the times (if required) and approve the total amount of leave for the request.
Note that for partial day leave requests the amount of hours approved by the manager will remain fixed for the leave timesheet. They will not be recalculated on the day that the leave timesheet is taken as is the case for full day leave requests that utilise a reference period to calculate average working hours.
Additional notes
There are a few things to keep in mind when using this setting to configure a leave policy.
- The calculation for average working hours will round up to the closest minute to ensure you are not under calculating entitled leave for your team members.
- The calculation references only "Pay Approved" timesheets for the team member. That is, all hours for which the team member has been paid in previous pay cycles or will be paid in the current pay cycle will be included in calculating the average working hours.
- Currently, the calculation will only take into account average working hours, not the average pay rate over the 52 weeks of work. Deputy will create a timesheet that pays the leave policy at the team member's current regular pay rate. If a manager believes there is significant variation in pay rates for any team member over the 52 week reference period they should calculate the average pay rate manually and amend the timesheet as required. The ability to calculate the average pay rate within Deputy will be released soon.
- If you have enabled the option to calculate average working hours for a leave policy you will find that the same number of 'days' leave does not equal the same number of hours for every employee. This is because the standard hours for each day of leave will be different for each employee based on their average working hours. Read more about how Deputy determines the length of a standard day for the purposes of determining a day of leave.