WFM UK: Configuring Overtime and Lieu Hour Settings

Overview

This article explains how to configure Overtime and Lieu Hours within the HR module, including how to enable the features, set rules in contracts, apply location settings and ensure calculations flow through correctly to HR and Payroll.

Contents

• Overtime & Lieu Hours
  • Enabling Lieu Hours 
  • Configuring Contracts
  • Other Configuration Settings
    • Lieu Hour permissions in HR
    • Rota Global Settings
    • Multiple Employments from other Locations
    • Permissions in Rotas
• Overtime / Lieu Calculations
  • Overtime Vs Lieu Hours
  • Including Absence or Holiday Hours
  • Overtime calculation
• Four Weekly & Fortnightly overtime 
• Submitting rotas to Payroll
• Scheduling Lieu Hours to be paid within Rotas
• Submitting Schedules to Payroll

In this article, the term 'Overtime' refers to both overtime and lieu hours, as the calculation for both are the same. The difference between the two is how they are dealt with after their calculation.

Overtime & Lieu Hours

Different types of overtime can be set up for various reasons. For example, once an employee has worked their contracted number of hours, they can either be paid for the additional hours, accrue lieu hours, or both.

Overtime is enabled on all customer portals, as standard.

Enabling Lieu Hours

To enable the Lieu Hours functionality, go to:

• HR > Administration > Global Settings > Edit Default Employee Settings
• Locate and tick the Enable Lieu Hours? box, and then Save (bottom right corner)

Fig.1 - Enabling the Lieu Hours Functionality

Some additional configuration is then required so that lieu hours are set to accrue and pay for employees.

• Go to HR > Company Admin > Locations and select the required Location
• Use the yellow arrow drop-down and select Lieu Day Settings
• Select the Lieu Type of Hours
• A lieu Expiry Rule can be set in place to set the number of Weeks/Months until the Lieu Hours expire by selecting Do Lieu Days/Hours Expire?
• Select either Weeks or Months in Expiry Rule to set at what frequency lieu hours expire
• Enter a value in Weeks until Expiry to sent the number of weeks or months that the lieu hours will stay active for
• If expired Lieu Hours should be automatically paid to the employee upon their expiry date, select Auto-Pay Expired Lieu On Rota Submission
• For Rota module users, to see the available Lieu Hours on the rota, select Display Available Lieu Time On Rota Day Content Page
• Lieu Pay Rate should remain at zero, and the Lieu Hours functionality will calculate and pay according to the configuration set within the contract
• Save the changes

Fig.2 - Edit Lieu Day Settings

Configuring Contracts

• To view a Contract, go to HR > Company Admin > Contracts > Select Contract (for guidance on how to create a contract, see here).
• To create Overtime rules, select the yellow drop-down arrow > Overtime Settings 

Fig.3 - Create Contract

• From the top of the screen, select Create Overtime
• Enter a Description for this Overtime
• Use the Start Band drop-down to select the point at which the overtime will start - either Contracted Hours or FTE.

Note - FTE is set in the Job Title Configuration (Edit default Holidays), or for part-time employees, on their employment details page against Override FTE.

• If an employee does not have any Contracted Hours, enter the number of hours in the Default Start Band if No Contracted Hours that the overtime will start from
• The Overtime Payment can either be a multiple of the employee's salary (Pay Rate * Factor) or a set amount per hour
• If the overtime applies to all hours worked, select Ignore Contracted Hours
• Ireland Overtime Calculation refers to old functionality no longer available to configure. Please ignore
• Overtime Frequency - select if the overtime should be calculated over 1, 2 or 4 weeks. 2 or 4 weeks will result in overtime calculations being made on a fortnightly or four-weekly basis using a total of hours worked within the selected period
• Negative Lieu Hours - select if negative Lieu Hours are to be created if the employee does not work their contracted hours

Bands can be set up to pay overtime or create lieu hours when a specific number of hours has been reached. The bands in Fig.4 show that the contract will pay overtime to employees at their normal pay rate for all hours worked between 20 and 25 hours. For hours worked above 25 hours, overtime will be paid at 1.5 * the normal pay rate.

• To create or delete bands, use the plus and minus buttons
• To set the band to create lieu hours, rather than overtime, select the checkbox labelled Create Lieu Hours
• When ready, select Save and then Save again on the next screen (which is 'Assign Job Titles' but this can be done later)

Fig.4 - Overtime settings and Bands

If paid absences should be included as Worked Hours for the purpose of calculating either Overtime or Lieu hours, Absence Types can be assigned within the overtime setting page to be included.

• To include absences in overtime calculations, select Assign Absence to Overtime
• To include absences in lieu hours calculations, select Assign Absence to Lieu Hours

Fig.5 - Different 'Assign' options

Note - the applicable button(s) will be available to select based on the settings within the bands. If the bands are to calculate overtime, Assign Absence To Overtime will be available, and if the bands are to calculate Lieu Hours, Assign Absence To Lieu Hours will be available.  If the bands contain a mixture of both overtime and lieu hours, only the Overtime option will be available, and absence assigned here will be included in both the overtime and lieu hour calculations

• Select the applicable absences from the Available section of the selection box, and using the arrows, move the selected absences to the Assigned section > Save

Fig.6 - Assign Absences to Overtime / Lieu Hours

If the overtime calculations apply to only a small number of job titles that have the same contract assigned, specific job titles can be assigned

• To assign job titles, from the Edit Overtime Settings page, select Assign Job titles

Fig.7 - Assign Job Titles

• Select the applicable Job Titles from the Available section of the selection box, and using the arrows, move the selected Job titles to the Assigned section > Save

More information about creating and assigning contracts can be found here.

Other Configuration Settings

To get the most out of the functionality, other settings within HR and Rotas should be configured.

Lieu Hours Permissions in HR

An additional setting in the HR Module allows the ability to disable the user from marking Lieu Hours as taken directly from an employee's record:

• To find this setting, go to HR Module > Administration > Global Settings > Edit Default Employee Settings
• Locate the Do not allow users to mark Lieu Hours as taken from with the employees record? setting and enable if required:

Fig.8 - Lieu Hours Global Setting - Restrict marking Lieu Hours as Taken

There are two permissions on the HR Template relating to Lieu Hours

• To view the permissions, go to HR > Users > Templates
• Select the applicable Template > Assign Permissions > Administration
• The first permission is Lieu Day Description, which allows the user to create the reasons for accruing the Lieu Hours
• The second permission is Lieu Hours and gives the user access to the Lieu Hours screen within the employee's Hr record

Fig.9 - 'Lieu Hours' and 'Day Description' permissions

Rota Global Settings

In the Rota module, the Global Setting for Overtime needs to be switched on:

• To enable the Overtime Global Setting, go to Rotas > Administration > Global Settings > Edit Rota Settings
• Select Enable Overtime

Fig.10 - Rota Global Settings - Enable Overtime

Once selected, a number of additional settings will appear.

Enabling Include Multiple Employment in the Cost Calculation of Overtime allows hours from multiple employments to be included in the calculation of both Overtime and lieu Hours. Enabling this will present further settings for consideration:

• To associate all overtime costs, in the wage cost, to the employee's main employment, select Apply All the Overtime Cost at Main Location
• To associate overtime costs, in the wage cost, to the actual location the employee worked, select Apply Overtime Cost Proportionally between Main Location and Multiple Employment Location(s)

Fig.11 - Rota Global Settings - Multiple Employment related Overtime Settings

Enabling Include Paid Holidays in the Calculation of Overtime allows paid holiday days to be considered worked hours in the Overtime calculation.

Fig.12 - Rota Global Settings - Including Paid Holidays in Overtime

Include Multiple Employments from Different Locations

It is possible to include hours worked in multiple employments at other locations in the overtime calculation.  To enable this setting, go to:

• Rota Module > Administration > Global Settings > Edit Rota Settings
• Locate the Include Multiple Employments from other locations in Overtime and Lieu Hours calculations? setting, and enable if required:

Fig.13 - Rota Global Setting - Include Hours from Multiple Employments

With the setting enabled, upon submission of each schedule/rota, the overtime calculation will consider hours worked at each employment, within the same week, regardless of where they were worked.

For example:

Fig.14 - Example

• Without the setting enabled, the employee would receive 0 overtime. This is because only hours worked in a single location are being used for the calculation
• With the setting enabled, the calculation will recognise that across both locations, the employee has worked a total of 50 hours and is due 10 hours overtime

Please note - The calculation is done upon submission of a schedule/rota and considers hours already submitted for the employee. In the above scenario, overtime would not be calculated until the second location is submitted and the total 'submitted' hours for the employee exceed the contracted number

Permissions In Rotas

Two rota permissions need to be enabled so that users can see and authorise overtime and lieu hours upon submission of the rota to payroll

• To view the permissions, go to Rotas > Users > Templates 
• Select the applicable Template > Assign Permissions > Creating & Completing Rotas

Fig.15 - Rota Permission Template

• Additional Payments allows the user to see the Additional Payments screen upon submission of the rota. 
  • The Additional Payments Screen details the hours worked, contracted hours, overtime and/or lieu hours and cost per employee
• Authorise Additional Payments allows the user to authorise the payment of overtime or accrual of Lieu Hours upon submission of the rota
  • When the rota is submitted, overtime payments will feed into the employee's payroll record, and lieu hours will accrue and be stored in the employee's lieu hour page within HR

Note - Both of these permissions must be assigned to the user for overtime and lieu hours to pay and accrue correctly

Overtime / Lieu Calculations

There are three ways to configure overtime and Lieu Hour calculations within a contract: Weekly, two weekly and four weekly. All calculations are done upon submission of the rota. 

Overtime Vs Lieu Hours

The calculation for the number of overtime hours or Lieu is the same. The only difference is the way they are dealt with after the calculation.

Overtime Hours are calculated and paid to employees in the next available pay run after the submission of the applicable rota to payroll.

• For hourly employees, their payslip will show the total number of hours worked under the pay type of Hours.  Overtime will display in the payslip as a separate line if the overtime due is above the standard pay rate.
• For salaried employees, overtime will only display and be paid  for hours over the contracted/FTE

Lieu Hours are calculated and stored in the employee's Lieu Hours record in HR for them to be taken at a later date.  If the overtime settings are set to calculate lieu hours at above the standard hourly rate, the number of hours worked over set hours will be multiplied by the factor set within the contract.

• For hourly employees, if lieu hours are taken, they will be paid at the employee's main hourly rate
• For salaried employees, if lieu hours are taken, they will not be paid to the employee, but included in the salary payment in a similar way to holiday pay

Including absence or holiday hours

Depending on the configuration of contracts and global settings, holiday and absence hours may be included in the calculation of overtime and lieu hours.

• Absence Hours are calculated according to either the employee's FTE or the averages that are calculated according to the Flexible employee average calculation.
• Holiday Hours are calculated by either the employee's FTE or the averages, in the same way as absence hours, for employees who take their holidays in days. For employees who take their holidays in hours, the actual number of hours requested will be used. 

Overtime Calculation

When the weekly calculation is selected, the overtime and lieu calculations will use a single week's actual hours when calculating what is due to be paid or accrued.

Upon submission of the rota to payroll, the calculation is made to compare the actual worked hours against either the employee's contracted hours or FTE

Example 1 - Overtime at main employment

This employee is contracted to 40 hours per week, but has worked 50.  According to their contract, any hours worked between 40 and 45 per week are paid at a single rate, but any over 45 are paid at double rate.

Fig.16 - Weekly Overtime at main employment

Example 2 - Overtime at multiple employments within the main location

When an employee has a multiple employment, hours from both employments are used to calculate overtime.

Fig.17 -Weekly Overtime at main employment

Please see the configuration options for information about multiple employments from a different location

Example 3 - Overtime including Absence and Holiday Hours

When absence and/or holiday hours are included in the calculation, they are simply included in the total actual hours.

Fig.18 -Weekly overtime including absence and holiday hours

Four Weekly & Fortnightly Overtime

When configuring a contract, there is an option to select the overtime frequency with the options for 1 week, 2 weeks or 4 weeks.  This setting denotes how the calculation for overtime and Lieu hours will be made.

Fig.19 - Overtime Frequency

As detailed above in the Overtime Calculation, if 1 week is selected, the calculation will use the set hours per week when each weekly rota is submitted to payroll.

If either 2 weeks or 4 weeks are selected, the calculation is slightly different.  Rather than calculate after every rota, the calculation is made after every second or fourth rota is submitted to payroll.

If 2 weeks is selected, and an employee is contracted to 40 hours a week, for example, the calculation will use:

Total actual Hours over 2 weeks - total contracted hours for 2 weeks (80) = overtime due

Similarly, if 4 Weeks is selected, and an employee is contracted to 40 hours a week, the calculation will use

Total actual Hours over 4 weeks - total contracted hours for 4 weeks (160) = overtime due

When 2 weeks or 4 weeks are selected in overtime frequency, a new option to Define Rota First Week (see Fig.20). This will be used by the calculation to determine when the 1st rota of the period starts.

Fig.20 - Define rota First Week

Submitting Rotas to Payroll

Once all configuration has been completed and actual hours have been confirmed within the rota, the rota can be submitted to payroll. It is at this point that the overtime and lieu hour calculation will be completed.

• To submit a rota to payroll, go to Rotas > View rotas > Select Rota
• Ensure all days have been Completed > select Submit rota to payroll

The user will be taken to the Additional Payments screen, where they will see a breakdown of any overtime or lieu hours that have been calculated.

Fig.21 - Additional Payments

This page displays the following information, relating to Overtime and Lieu Hours calculations:

• FTE/Contracted Hours - This is the number of hours that is assigned to the employee in either the contracted hours of FTE fields
• Actual - The actual number of hours worked (including holiday and absence hours)
• Overtime - the number of hours overtime (if overtime is due)
• Lieu - the number of lieu hours (if lieu hours are due)
• Lieu Taken - if accrued lieu hours are taken by an employee the number of hours requested is displayed here
• Absence - the number of absence hours included in the overtime or lieu hours calculation
• Pay Amount - the amount being paid to employees in terms of overtime
• Lieu Amount - the value of the lieu hours being accrued

To complete the submission of the rota, the user should either Authorise or Omit each employee's additional payment, before selecting Submit to Payroll

Scheduling Lieu Hours to be Paid Within Rotas

If an employee has Lieu Hours accrued, it is possible to schedule them within a rota so that the hours pay out in the next available payroll.

• To schedule Lieu hours to be paid via the rota, go to Rotas > View rotas > Select Rota
• Select the day in which the Lieu Hours will be taken by the employee

Fig.22 -Schedule Lieu Hours

Alongside the employee's actual times, there are two columns associated with Lieu Hours

• Lieu Hours - this shows the number of Lieu hours accrued by the employee and are available to schedule
• Lieu Hours icon - to be selected when lieu hours are scheduled.  When selected a pop-up box will be displayed (fig. 18)

Fig.23 - Take Lieu Hours

• Enter the number of Lieu Hours an employee wishes to take > select Save

Once requested, the number of Lieu Hours on the rota page will reduce by the number requested, and the icon will change colour

Fig.24 - Lieu Hours Scheduled

Upon submission of the rota, the Additional Payments Screen will display the number of Lieu Hours scheduled for an employee for the week.  These will be paid to the employee in the next available pay run

Submitting Schedules to Payroll

For Scheduling Customers, Lieu Hours can be added to the Schedules via the Scheduling page. More information can be found here

When Overtime or Lieu hours are enabled and configured, additional permissions within scheduling are required so that the user can authorise the additional payments screen when submitting to payroll.

• To set the permission, go to Scheduling > Users > Templates
• Select the Template > Assign permissions > Creating and Completing Rotas > Authorise Additional Payments > Save

Fig.25 - Scheduling Permission Template