Time off policies contain the detailed rules for the various types of time off your employees are allowed to use, such as Holiday, Sick and Work from Home.

Our user-friendly multi-step wizard will guide you through the process of setting up a time off policy.

GIF_new_policy.gif

Notes:
  • All relevant wizard steps must be completed for a new policy to be created.
  • The information is not saved as a draft, so the set up process cannot be completed in another session. However, you can complete the set up and then come back to it and edit it later - as long as you do not assign any employees to the policy it will not have any practical impact.

Before you begin

Every time off policy must be associated with a policy type, such as Holiday, Sick, Work from home. 

So you’ll need to set up the corresponding policy type before setting up a policy. See Set up time off policy types for all the details.

Example

For a "Vacation - US" policy type, you may have different time off policies for:

  • Mid-level managers, who are entitled to 25 vacation days a year and do not need to request time off from their manager.
  • Regular employees, who are entitled to 20 vacation days a year and need to have their request approved by their manager.

How to set up a new time off policy

  1. From the left menu, select Settings > Time Off.
  2. Select the Policies tab.
  3. Click +New policy.

You will enter the step-by-step wizard.

Step 1: Details

  1. Select the Policy type this policy is associated with.

    Note: The policy type defines whether the time off is accrued and calculated in days or hours. This impacts the options available in the policy set up wizard. 

  2. Enter a Name for the policy.

    Note: This name is for internal purposes only - employees will see only the policy type name and not this policy name. However, be aware that the policy name must be unique.

    Tip: When naming the policy, we recommend including the name of the associated policy type. For example, if the policy type is "Holiday" a policy could be called "Holiday: UK - 25 days (Mid-level managers)".

  3. Add a Description of the policy (optional).

    Note: 
    This description will appear in various time off admin interfaces:
    • In the policy summary.
    • It can be added as a Policy description column in the policy balances list in People's time off. There are options for: Current policy description, Previous policy description and Next policy description (if the employee has a policy change planned)
    • When hovering over the i icon next to the policy name when assigning a policy to one or more employees.
    • When hovering over the i icon next to a time off policy when adding a new hire.
  4. Click Next.

Step 2: Allowance

  1. In Allowance Entitlement, select how many days/hours off employees are entitled to take with this policy. Choose one of three options:
    • Base annual allowance: Employees can take up to X days/hours off per calendar year.
      • In Annual allowance, enter the total number of days or hours.
        Notes:
        • This annual allowance is recurring, so employees will receive the same number of days/hours at the start of each new year.
        • The annual allowance resets on the date selected in the Cycle set up:
          • For Annual and Semi-annual cycles it is according to the date selected in the Activity period dropdown.
          • For Monthly, Semi-monthly, Weekly and Bi-weekly cycles it is the date selected in the Annual carryover and grant day dropdown.
      • Ratio of hours worked: Employees can take one hour off for every X hours worked (typically used for part time employees).
        • In Hours worked per hour of allowance - enter the number of hours employees must work to receive one hour of time off.
          E.g. Enter 20 if an employee is entitled to one hour off for every 20 hours worked. In this case, if they work 180 hours in a month they will receive nine hours of time off.

          Note: The Ratio of hours worked option is available only if the policy type is calculated in hours and the Time & Attendance module is enabled.

      • Unlimited: Employees can take as many days/hours off as they want and the balance is not tracked.

        Note If Unlimited is selected, the policy setup process is cut to four steps - Details, Allowance, Request and Approval.

  2. In Accrual Cycle, configure how frequently the employee’s balance is calculated and accrued.

    Note: See the Time off Glossary for detailed info about Cycles.

    Either:

    • Select Existing cycle to use a previously created cycle,
      or

    • Select New cycle and select the Balance closing frequency from the dropdown. Then, 

      • Select the Activity period, Year starts on or Cycle start date(s).
      • Select the Annual carryover and grant day - the day a new annual cycle begins and any additional accumulated days/hours are added to the balance.
      • Enter the number of Cutoff days - the number of days after the annual period finishes when employees can still make changes, e.g. correct the number of days taken in the previous month.
        Notes:
        • The parameters will change depending on the type of cycle selected in the Balance closing frequency dropdown./li>
        • The cycle cannot be changed once a policy is created and at least one employee has been assigned to it.
        • A policy cannot be deleted if at least one employee is still assigned to it.
  3. In Accrual timing, select when the employee’s balance increases: at the beginning or end of the cycle.

    Note: This is available only if Base annual allowance was selected at the top of the page.

  4. Simulation: This is a read-only section, displaying an example of how the time off allowance will be accrued by an employee.
  5. In System display set how the allowance amount is shown to employees.
      • In How is the employee’s current balance shown? select how the current balance is shown to employees.
        Choose from one of the following two options:
        • As a monthly accrual - the allowance is broken into months and shown as if it is given progressively each month.
        • As an annual accrual - the entire annual allowance is shown from the start of the year.
          Note: This is option is shown only if an annual cycle is used.
      • In Balance rounding, select how the current balance is rounded when displayed to employees.
        From the Rounding method dropdown, select one of the following:
        • To the nearest: if the number is above .5 or .X5 it will be rounded up. And if it is below .5 or .X5 it will be rounded down.
        • Round up: the number will always be rounded up. From the Precision dropdown, select what level of number will be displayed.
          Note:
          • Rounding is used for display purposes only and will not change the actual calculated balance.
          • By default, the rounding method is set as To the nearest and Precision is set as Half.
  6. Click Next.

Step 3: Proration of allowance

Note: This step is not displayed if the Allowance entitlement is set as Unlimited or calculated as a Ratio of hours worked, in Step 2.

Proration defines how hours/days off are trimmed for employees who did not work a full cycle. It applies to:

  • Part time employees  - because they work less hours/days a week than full time employees.
  • New full time hires who start midway through a cycle - because for their first cycle they’ll work less hours/days than other full time employees.
  • Terminated employees - who stop working for the company before the cycle ends.

Tip: See the Time off glossary for a more detailed explanation of proration.

  1. In Which days are used to calculate proration? Select either:
    • Calendar days - every day is included - including weekends and national holidays.
      E.g. this could be used for a Travel For Work time off policy.
    • Work days only - only working days are included. E.g. this could be used for a Holiday time off policy, where if the employee requests time off that includes the weekend, the Friday and Saturday are not counted as days deducted from their holiday balance.
  2. In What happens on hire? configure what happens if a new employee starts working in the middle of a cycle. Select either:
    • Prorate allowance from hire date - the employee will receive the equivalent number of days/hours according the amount of time left in the cycle.
    • Grant the cycle’s annual allowance - the employee will receive all of the days/hours for that cycle, as if they had been working for the entire cycle.
  3. In What happens on termination? configure what happens if an employee leaves the company in the middle of a cycle.

    This sets how many of the remaining days/hours in the cycle they receive as monetary equivalent in their final pay packed?
    Select either:
    • Prorate up to termination date - the employee will receive the monetary equivalent of any unused days/hours up to their last day.
    • Grant the cycle’s remaining allowance - the employee will receive the monetary equivalent of any unused days/hours as if they worked for the entire cycle.
  4. In Days to exclude from allowance, toggle on Excludes certain days, to ensure that specific types of paid and unpaid days are not included when calculating the accrued time off allowance.

    Then,

    • From the Paid time off policies to exclude dropdown, select the type(s) of paid time off that will not be counted when calculating the prorated allowance and click Apply.

    E.g. If the employee is paid for days taken off for jury duty and Jury duty is selected, any days taken off for jury duty will not be included when calculating the accrued time off allowance.

    • From the Unpaid time off policies to exclude dropdown, select the type(s) of unpaid time off that will not be counted when calculating the prorated allowance and click Apply.

    E.g. if the employee is not paid for sick days and Sick is selected, any days taken off as sick days will not be included when calculating the accrued time off allowance.

    Check the Paid statutory and bank holidays box to ensure that any paid public holidays will not be counted when calculating the prorated allowance.
  5. In Part-time employees, toggle on Prorate allowance for part-time employees to ensure part time employees do not receive the same time off allowance as full time employees.
    Select either:
    • By employee’s %FTE (Full time equivalent) - the allowance is calculated as a percentage of a full time employee’s allowance.
      E.g. if a full time employee is entitled to 2 days holiday a month, then a part time employee who works half days would receive 1 day a month.
    • By number of days worked per week: Employees are entitled to a specific number of days off each cycle, depending on how many days a week they work.
      E.g. if they work 2 days a week they receive 4 hours time off each cycle, but if they work 4 days a week they receive 6 hours time off each cycle
Notes:

Step 4: Balance limits

Note: This step is not displayed if the Allowance entitlement is set as Unlimited in Step 2.

  1. In Carryover
    • Toggle on Set carryover limit to ensure employees are able to carry all or part of their unused time off balance to the next year.
      Then, in Maximum that can be carried over enter the number of unused days/hours that can be carried over to the following year.
    • Toggle on Set carryover expiration to ensure carried over days will disappear from the employee’s balance after a specified number of months or years.
      Then, in Carryover expiration date, enter the number of months or years after the start of the year when carried over days/hours will disappear. 

      Note: This option is only displayed if a number is entered in the  Maximum that can be carried over field.

      If the expiration date is set at more than 12 months or 1 year, select the order of deduction in Which balance gets deducted first?.
  2. In Notifications
    • Toggle on Alert employees that unused balance will be lost to ensure employees will be notified in Bob that unused balance will be lost if a request is not submitted, 
      Then, select when the alert will be shown:
      • On Cycle start: at the start of the final cycle of the year.
      • Before deduction date: select the number of days, weeks or months before the end of the year.
  3. In Maximum and minimum balance:
    • Toggle on Set maximum balance at the end of the cycle, to prevent employees from accumulating more than X days in a cycle. Then enter the maximum balance in the field below.
    • Toggle on Set minimum balance cap, to limit the amount of negative balance employees can accumulate. This sets whether the employee can enter negative balance when they request more days/hours off than they have in their balance.
Notes:
  • Setting a minimum and maximum balance ensures that whenever the calculation attempts to exceed the defined value, it will be trimmed and adjusted to the max or min balance.
  • If a negative value is entered as the minimum balance limit, employees will be permitted to enter negative balance. Therefore it is essential to set a limit unless you want employees to be able to take as many days off as they want with no limit.
  • To prevent employees from requesting time off that exceeds their balance enter 0 in the Minimum balance cap field.

Step 5: Probation period

Note: This step is not displayed if the Allowance entitlement is set as Unlimited or Ratio of hours worked in Step 2.

The probation period is used to restrict the amount of time off employees can take during the initial weeks or months of employment.

You can also restrict the amount of negative balance employees can enter during the probation period and/or prevent them from making time off requests during the period.

Note: The time off probation period is not connected to Probation in Employee Fields.

  1. In Duration, toggle on Set a probation period for new hires to ensure a probation period is implemented.
    Then, in Probation ends after - enter the number of weeks or months after the employee’s start date that the probation period will last for.
  2. In Balance limit:
    • Select Same as after probation to ensure new employees can enter the same amount of negative balance as employees who have completed the probation period.
    • Select Custom and enter a Min. balance cap to restrict the amount of negative balance an employee can go into during the probation period.
  3. In Requests, toggle on Block new hires from submitting requests to prevent new employees from requesting time off.
    Then either:
    • Select Entire probation period - to ensure new employees cannot request time off during the probation period.
    • Select Custom and then in Block requests for their first enter a number of days, weeks, months or years after their first day that employees are unable to request time off using this time off policy.

Step 6: Allowance increase

Note: This step is not displayed if the Allowance entitlement is set as Unlimited or Ratio of hours worked in Step 2.

In this step you’ll define whether employees are able to automatically increase the time off allowance with this policy in specific circumstances.

  1. In Years of service, toggle on Grant additional days based on years of service to ensure that employees’ balances will increase by X extra days after every X years they have worked for the company.
  2. In When does the employee’s balance go up, select whether the employee’s balance will increase according to the cycle start date or on their work anniversary
  3. In Overtime, toggle on Let managers bank overtime as additional days to allow managers to reward employees who work overtime with additional hours/days.
  4. In Does banked allowance have to be used within a time frame? Select whether banked overtime expires after a specified number of days/weeks.

    Note: This is not connected to the time and attendance module. See Bank employee overtime as time off for full details.

Step 7: Requests

In this step you will define what options will appear in the form when employees make a time off request. See Request time off for full details.

  1. In What’s the shortest amount of time employees can request, select whether employees can take off part of a day/hour or only full days/hours.
    Notes:
    • If the policy is tracked in Days, then minimum interval can be half a day or a full day.
    • If the policy is tracked in Hours, then minimum interval can be: 15 minutes, 30 minutes, full hour, half a day or a full days Optional or Mandatory for employees to enter a description when requesting time off.
  2. In Attachment, select whether it is Optional or Mandatory for employees to add an attachment when requesting time off.
    Or select None if you do not want the attachment field to appear in the Request time off form.

    Note: If Mandatory is selected, you can  set the minimum request duration that requires an attachment. E.g. Employees can be required to add a sick note if more they request more than three sick days.

  3. In Visibility, select how the policy type name is displayed. Select one of the following options:
    • Public - the policy type name will be shown to all colleagues, e.g. in People’s status on the homepage or in the Time off calendar.
    • Private - the policy type name is shown only in private areas of Bob accesible by only employees or admins, e.g. in the My time off section.
    • Custom status - enter an alternative name for the policy type, to be shown publicly. For example. You can set a sick policy to show as "Out of office".
  4. Check Prorate request by employee's %FTE to ensure all time off requests made by part time employee's using this policy will be calculated prorata according to the %FTE.
    E.g. if an employee who works 50% of FTE requests two days off, the system will automatically calculate it as a request for two 0.5 days, i.e. one day.
  5. In Set extra deduction configure whether additional days are deducted from the balance when a time off request is made. E.g. for every 4 working days requested, an extra 3 days will be deducted. (This is typically used in Nordic countries).
  6. Check the Allow requests after cutoff box if you would like to allow employees to submit and edit time off requests with this policy even after the cycle is locked.
    When this box is unchecked:
      • Employees who attempt to submit or edit a time off request which includes days in a locked cycle will be shown an error message You cannot submit requests for dates prior to dd/dd/yyyy
      • Managers who submit or edit a time off request on behalf of an employee which includes days in a locked cycle will be shown a warning message Please note: the balance prior to dd/dd/yyyy is already locked and won’t be affected

        Note: This box is un-checked by default, unless you have the Update and cancel approved time off requests permission. 

Step 8: Approval

  1. Toggle on Approval is required to ensure employees must request and receive approval whenever taking time off using this policy.
  2. If approval is required select either:
    • Use employees approval settings - to ensure the regular time off approver is notified upon an employee request.
      See Time off approval settings for full details.
    • Create custom approval, and enter the name of the first and second approvers in the corresponding fields - to ensure a different admin or manager is responsible for approving time off requests using this policy.
      E.g. if the travel coordinator needs to approve any travel for work requests.
      Note: If approval is not required, you can still set a notification to be sent to employees' default first approvers or a custom approver.
  3. Click Done.

Assign the policy

The policy is now created.

You can now see the policy listed in Settings > Time Off > Policies and Assign employees to the policy or Manage people’s time off policies.

FAQs

How do I edit a time off policy?
Once a policy is created it will appear in the list of policies - Settings > Time off > Policies tab. To edit a policy, click on its name, click Actions and select Edit. Then go through the policy set up wizard as described above.

Note: It is not possible to edit a cycle once the policy has been assigned to at least one employee.

Can I duplicate a policy?
Yes - you can duplicate an existing policy and then create a new one by changing some of the parameters. To do so, click on a policy name in the list on the policy tab, click Actions and select Duplicate. Then give the policy a new name in the Details step and go through the policy setup wizard as described above.

How do I delete a time off policy?
To delete a policy, click on its name in the list on the policy tab, click Actions and select Delete. Then confirm the deletion.

Note: It is not possible to delete a policy while it has been assigned to at least one employee.

How should I determine which cycle to use?
There are several factors to guide you as to the cycle that should be set (given the limitation of setting only one cycle per site):

  • Legislation: If an employee is entitled to the total amount of holiday from day one, then setting an Annual cycle is satisfactory. Suppose the employee earns their allowance progressively along the year, where the employee accrues a portion of the annual allowance each period. In that case, a higher frequency cycle (such as Monthly or Semi-monthly) should be used.
  • Payroll Frequency: In many cases, the Time Off accrual frequency should match the payroll frequency, as many payroll systems require that the total accrued days/hours, end-of-period balance, and total used days/hours are exported to payroll. For example, for a US customer who runs payroll on a Semi-monthly basis, setting a Semi-monthly time off cycle makes sense. That means that for the 26 payroll cycles in a given year, there will be 26 Time Off cycles.
  • Time and Attendance: Another factor that also has to do with payroll frequency is whether time and attendance are enabled for the site (where employees report their attendance, submit their timesheets, and export their records to payroll on payroll time). In this case, aligning the Time Off cycle with the defined time and attendance cycle is appropriate. . To learn more about time and attendance cycles, see Set up site attendance settings.