For any leave type that you create, you can create on or several policies to cater for the rules that apply to different employees in the company. For example, you might want different rules for annual leave to be applied to your employees in Thailand office vs Indonesia office. You also might want different rules to apply for people with different job grade. Each leave policy is entirely customizable so they can be quite different from each other.
More info on leave types here: how to create and manage leave types?
1. How to add a leave policy?
From HR Lounge, go to Leaves, and Leave Policies. Then choose the leave type for which you would like to add a policy.
Scroll down to the policy configuration section. Then you have two options:
- Duplicate an existing leave type: This will duplicate all the rules so it might be faster if the two leave policies are
- Add a new leave type: This will add a new leave policy to be configured from scratch
2. How to configure a leave policy?
2.1. How to choose who a leave policy is available for?
Under any leave policy, the first section is called "Policy availability". This section allows to restrict the usage of a policy to a certain group of people based on some criteria. It DOES NOT mean that all the employees that are under these conditions automatically get this policy. It just says that you are allowed to apply to them. In other words, you still have to assign the policy to the right people (for that you can refer to: How to assign leave policies to my employees? ).
The goal of restricting the availability of a policy is to make the assignment easier. For example, if you have one policy for each office in your company, then whenever you create a new employee and assign him an office then the policy will be assigned automatically.
First thing is two choose between two options:
- Available to all employees: This means that you can assign this policy to anybody in the company
- Only available to certain groups of employees: This means that you are choosing to restrict this policy to a certain population of employees only.
If you choose the second option, you can restrict the policy using the following criteria:
- Job Grades
- Employment types
2.2. How to define the approval process of a leave?
Under the "Approval" section in your leave policy configuration.
When an employee books a leave, you can choose to have it go through an approval process. This approval process can go up to two steps. At each step, the approver will get an email notification and a task in his "pending actions" to approve the leave. These steps are sequential meaning that the second approver can only approve the leave once the first approver has approved it.
When choosing who will be the approver (first or second), you have the following choice:
- None: The step is skipped. For example, if you only want one approver in the process, you can select none under the second approver section.
- Position/manager: This means that the manager of the employee will be the approver. If you change the employee's manager then it will automatically be reflected in the approval process of the leaves booked afterwards.
- Specific employee: You can change any employee of your choice to do the approval.
2.3. How to define the calculation behind my entitlement, leave balance, and carry forward?
Under the "Entitlement" section of your leave policy configuration.
2.3.1. Leave entitlement
Choose first if you would like to have a leave entitlement. You have the following choice:
- Fixed entitlement: Here you will decide of a yearly entitlement for the employee. This applies for instance to annual leave.
- Upon request: Here you do not have any entitlement. The employee will book a leave and it will be the decision of the approver to accept it or not. This applies for instance to unpaid leave where typically the approver can be HR themselves.
If you decide to go for a fixed entitlement, you will be asked to key in:
- The entitlement amount: This is the number of leave days the employee is entitled to within the year. Please note that if you put 0 here, the employee will not be able to see the leave type at all since he cannot book it.
- The tolerance: If you enable the tolerance, it means that you are allowing the employee to book some days by anticipation. For example, if you choose a tolerance of 1, then the employee can still book 1 day if he has a leave balance of 0. This way he will have a -1 leave balance until he earns new leaves. The way leaves are earned is described in the next section.
2.3.2. Prorated Leave
Prorated leave allows you to decide for an employee that does not work a complete year if the leave entitlement should be prorated. This situation applies to employees who join during the year, and also to employees that quit during the year.
- If the setting is enabled, their entitlement will be calculated based on the number of months/days they have worked in the company. This typically applies to annual leave for instance.
- If the setting is disabled, the full entitlement is given to the employee no matter the number of days he worked. This applies some times for some special leave like a replacement leave etc.
2.3.3. Carry Forward.
Here you can set up the maximum leave days that will be carried forward from one year to the other. If you enable carry forward, the carry forward value attributed to an employee will be calculated as the minimum between the leave balance of the employee, and the carry forward value you have put.
Also, the system will do the following:
- On 31st Dec at midnight, the system will automatically calculate the actual carry forward value and add it into the "initial balances" carry forward column for the new year (more info on initial balances: How to adjust a leave balance or carry forward? )
- An employee will be able to apply carry forward leave for next year by anticipation. Of course it will be deducted from the current year's leave.
When you set carry forward, you can also set an expiry day/week/months. Then the employees will only be able to apply for carry forward on days within the expiry limit, counting from January 1st. For example, if I set a 3 months limit, employees will only be booked until 31 Mar of the year.
Seniority allows to increase the entitlement of employees that have been in the company for a certain time. For example, you can decide the every 2 years, employees will have 1 more day in their leave entitlement.
In order to configure seniority, you need first to choose the effective date:
- Beginning of period: The incremental entitlement days will apply since January 1st of the year that follows the employees anniversary date. For example, if the employee joined on Dec 2016, and his entitlement is incremented 1 day after 2 years seniority, the employee will have the additional day available in 2019.
- Anniversary: The incremental entitlement days will apply at the anniversary day of the employee. This means that on the anniversary year, the employee will be switching entitlement regime during the year. Therefore, his yearly entitlement will be prorated between before and after the increment.
The second thing to choose is the increment mode:
- Fixed increment: You can define an increment and a frequency that will be applied. For example 2 days every 1 year. In this option you can also set a maximum. For example, increment until you reach 10 days of increment.
- Variable increment: You can set how many days you want to add after a certain number of years. For example, 2 days after 3 years, 1 day after 4 years. In this case, someone having more than 4 years of experience will have 2+1 = 3 incremental days.
Here is an example illustrating of the two modes of calculation methods:
2.4. Advanced configuration
2.4.1. Use working days
This setting is used to determine which days can be booked:
- If enabled, only working days will count when booking a leave. Working days are based on the employee's office location. So if an employee does not work on weekends based on his office's configuration, if he books a leave from Friday to Monday, he will be deducted 2 days.
- If disabled, all days count when booking a leave. So if he books a leave from Friday to Monday, he will be deducted 4 days. This option is used for exceptional situations such as hospitalization leaves.
2.4.2. Allow employee to apply leaves in the past
If enabled, employees will be able to apply for leaves in past days. This option can be used for medical leaves for instance when employees are not necessarily anticipating to take the leave.
2.4.3. Set a limit of time for leaves to be booked in advance
If you select "Yes, set a limit" you can set a limit to the employee's ability to book leaves in advance. For example, if you put 3 months, then employees will only be able to book leaves that start 3 months from today.
2.4.4. Set a limit to the period that can be booked at a time (consecutive days)
If you select "Yes, set a limit" you can set a limit to the number of days that can be booked in a single leave application. For example, if you select 3 days, then a leave which duration exceeds 3 days (excluding non working days) will not be allowed.
2.4.5. Set a reminder for leave balance
You can use an option to send a notification to all the employees about there leave balance. This can be useful to incentivize users to consume their balance throughout the year. For this, you need to:
- enable the option
- choose a frequency. Once you choose, an orange message will tell you at which day it will be sent.
- Decide starting which leave balance level you would like the email to be sent. For example, if you put 1, then only people who have a leave balance of 1 and above will receive the email.
2.4.6. Notification for leave approval
Here you can add a list of emails and mailing lists that you would like to have notified every time a leave in this policy is approved. It can be useful for instance if you would like the HR team to receive a notification for every leave approve.
If you choose to do so, you can also decide to attach a calendar invitation together with the email. This way, you can easily add the calendar event into your own calendar to remember when employees will be on leave.
2.4.7. Custom fields
Custom fields are additional information that can be asked to the employee when booking a leave. This information will be communicated to the approver in order to take his decision.
You can decide the type of information:
- Select: in this case you can give some choices to the employee to choose from
2.5. Custom configuration
Some of the settings of the policy are customizable at the employee level under this section. This is useful if you have an exception to the rule. For example if an employee has an extra day of entitlement than his colleagues. Another example is if an employee has a special leave approver because he's working on a special project.
The available customizable options are the following:
- Entitlement: value and tolerance
- Carry forward: value and expiry
- Past application
- Max application in advance
- Max consecutive days
- First approve
- Second approver
Click on a customization type to start the process. For any customization you will follow the same process:
- Select the employee(s) to customization and click next
- Choose the value or setting you would like to apply to them
- Check the impact of your customization and approve
Note: If you change someone's policy, all customizations applied to him are lost.