Target audience

Admins, Implementation

Overview

The allowance entitlement set for a given policy defines what is the amount of days/hours a full time employee is entitled to.

In case there is a need to adjust the allowance entitlement for part time employees based on the employees' % of full time equivalent, the system can be set to prorate (or trim) the allowance accordingly.

Example: for a given holiday policy, a full time employee is entitled to 20 days of annual allowance. This means that a part timer who works for 80% of the full time equivalent will be entitled to 20*0.8 = 16 days

Another option is to be able to prorate the amount of time requested by the employees's % of full time equivalent.

Example: a part time employee wishes to request time off for 1 day on a given Tuesday. A full day's expected attendance is 8 hours, but the employee only works for 6 hours on Tuesdays. If proration of deduction is used, then not 1 full day but 6/8 of the day (0.75 days) will be deducted from the balance.

Key terminology

%FTE: Stands for Full Time Equivalent, is used to measure the employee's workload as a derivative of a full time employment amount of hours. A full time employment would be considered a 1.0 FTE (or 100%) and a part timer who works 50% of the expected full time equivalent will be considered a 0.5 FTE.

Proration: When it comes to allowance entitlement, it means to set a proportionate amount of allowance that is based on the employee's %FTE. That means that proration of allowance for part timers actually means "trimming" the allowance of a full time employment by the %FTE

Deduction: this is the amount of days/hours that will be deducted from the employee's balance.

Setup and Implementation

Set up the employee's %FTE

http://help.hibob.com/en/articles/3505121-editing-employee-work-patterns

Prorate allowance entitlement by %FTE

To prorate the annual allowance by the employee's %FTE:

  1. Locate the policy from Settings > Policies, by clicking the policy from the policy grid. The policy summary page will show.

  2. From the "Action" menu, click "Edit" to change the policy settings.

  3. In the wizard, navigate to step 3 "Allowance".

  4. Under the "Proration Based on %FTE", tick the "Prorate Allowance by %FTE" checkbox and save the settings

  5. Save the settings by completing all the steps in the wizard.

Examples

Example 1: Jill is a part time employee assigned to an Annual cycle where allowance is given as "Annual Grant" (that means all days are given in advance).

  • Allowance entitlement is 20 days per year (Annual grant)

  • Annual cycle (January - December)

  • Jill's start date is 15/10/2020

  • Jill's %FTE is 70%

Jill will get a prorated amount of 70% of the annual entitlement (that is 20 days *0.7 = 14 days) from the date of his hire.

Please note: even though Jill only started to work on 15/10/2020, the amount will not be further prorated based on the amount she worked in this annual cycle as it is given in advance (annual grant).

Example 2: Tyler is a part time employee who is assigned to an Annual cycle where allowance is prorated by calendar days (that is trimmed by the amount of days the employee worked in the cycle).

  • Allowance entitlement is 20 days per year (prorated by calendar days)

  • Annual cycle (January - December)

  • Tyler's start date is 10/03/2020

  • Tyler's %FTE is 70%

Tyler will get 11.33 days of allowance in 2020.

Let's see why:

  • 20 days of annual allowance / 12 months * 9 full months worked (April - December) = 15 days

  • For March the employee worked only 22 days, so 20/12 * 22/31 = 1.18 days.

  • So total balance (before prorating by %FTE) is 15 days + 1.18 days = 16.18 days

  • 16.18 day * 70% FTE = 11.33 days

Example 3: like example 2, but due to the COVID-19 epidemics where the company had to undergo pay cuts, Tyler's employment was reduced to 50% as of 01/06/2020, and then on 01/11/2020 was changed once again to 80%.

In this case the balance for 2020 will be prorated three times due to the change in %FTE.

  • From 10/03 - 31/05 - Tyler was on 70%, so 20/12 * 22/31 (March) + 20/12 * 2 (April - May) = 3.33 days + 1.18 days = 4.51 days. 4.51 days * 70% = 3.16 days

  • From 01/06 - 31/10 -Tyler was on 50%, so 20/12 * 5 (June - October) * 50% = 4.17 days

  • From 01/11 - 31/12 - Tyler was on 80%, so 20/12 * 2 * 80% = 2.67 days

  • Overall allowance for 2020: 3.16 days + 4.17 days + 2.67 days = 10 days

Example 4: Vanessa is a Junior developer who was hired on 23/10/2012 on a 50% FTE.

  • The vacation policy is tracked in hours - 200 hours for full time employee.

  • The cycle is defined as semi-monthly (1st - 15th and 16th - end of the month)

Therefore the amount that Vanessa will accrue for every semi-monthly cycle (and there are 24 semi-monthly cycles in a year) will be 200/24* 50% = 4.16 hours

Since on October Vanessa did not work the full semi-monthly cycle (so for the cycle that runs from 16/10 - 31/10, Venessa only worked for 9 days) then 200/24 * (9/16 days she worked in this cycle) * 50% = 2.34 hours

Total days that Vanessa accrues in 2020 will be: 2.34 hours in October + 16.67 days accrued in November - December = 19.00 hours

Prorate deduction by %FTE

In addition to the proration of allowance entitlement, you can independently prorate the amount requested by the employee, so the total duration of the request is prorated (trimmed) with respect. to the employee's %FTE.

To prorate the requests by the employee's &FTE:

Policies tracked in Days

  1. Locate the policy from Settings > Policies, by clicking the policy from the policy grid. The policy summary page will show.

  2. From the "Action" menu, click "Edit" to change the policy settings.

  3. In the wizard, navigate to step 3 "Allowance".

  4. Under the "Proration Based on %FTE", tick the "Prorate the amount requested by %FTE"

  5. Save the settings by completing all the steps in the wizard.

Policies tracked in Hours

Follow the steps 1-5 as in policy in days, but notice that the parameter's name is slightly different: "Prorate the amount requested by %FTE for flexible working pattern employees"

Please note: proration of requests for part timer employees is only supported if the employee's work pattern is set as Flexible (that is the %FTE is not determined by the working pattern but is set manually).

This is because if the employee's working pattern is in days then any day that is marked in the working pattern relies on the same duration as defined in the site "Hours per day" value and if the working pattern is set in hours, then there is no need to prorate the request (the system know what is the value of each day's duration).

Example 1: Daily time off policy (working patten - hours)

  • Jill is a part time employee whose working pattern is defined in hours

  • The site she belongs has working days set from Monday - Friday

  • Jill's working pattern is Monday - Thursday and she works works 6 hours per day. Therefor her %FTE is 24 weekly hours/40 hours based on the site for full time employment = 60%FTE

However, when Jill requests time off for Monday 14/12/2020, with the "Prorate the amount requested by %FTE for flexible working pattern employees" parameter checked, it will prorate the deduction based on the given day's "%FTE" - that is will not deduct 1 day (which according to the site is 8 hours long), but 6/8 of a day - that is 0.75 days.

If Jill was to request half a day (say only afternoon), a prorated half a day would be deducted, that is 0.75 days * 0.5 = 0.38 days

Example 2: Daily time off policy (working pattern - in hours, fluctuating hourly pattern)

This is similar to example 1, but Jill's working pattern does not have the same amount of hours every day.

With the proration deduction parameter checked, the amount that will be deducted will change by the total duration that is set on the working pattern.

  • Requesting a full day on Monday will reduce 6/8 days = 0.75 days

  • Requesting a full day on Tuesday will reduce 4/8 days = 0.5 days

  • Requesting a full day on Friday will reduce 2/8 days = 0.25 days

Example 3: Daily time off policy (working pattern - flexible)

Jill's working pattern is defined as flexible (that is she can work on any given day) and her %FTE is 80%.

This means that no matter what work day she requests time off, if the prorate deduction parameter is switched on, 80% of the day would be deducted.

Example 4: Hourly time off policy (working patten - flexible)

  • Vanessa is a part time employee whose work pattern is defined as flexible 70%

  • The site Vanessa belongs to has the following working pattern: Monday - Thursday (8 hours) and Friday (6 hours) = a total of 38 weekly hours.

When Vanessa requests Vacation (a policy that is tracked in hours where proration deduction parameter is checked):

  • If the request is for 1 full day (on Monday), the total amount deducted would be 8 hours * 70% = 5.6 hours

  • If the request is for 1 full day (on a Friday), the total amount deducted would be 6 hours * 70% = 4.2hours, as based on the site settings Friday expected attendance is only 6 hours).

  • A request for same day, but for a half day request, will be further trimmed by half: 5.6 hours *0.5 = 2.8 hours

  • A request for "Several hours" will not be prorated, as it is a specific amount of hours. So requesting 3 hours of vacation, will deduct 3 hours from the balance.

Limitations

The current solution does not handle the unique requirements of prorating UK bank holidays for part time employees. where an employee whose working pattern never falls on a bank holiday (typically on Mondays or Fridays) is compensated for the bank holiday value.

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