WFM UK : Holidays: Incremental Holiday

Overview

Holiday increments are additional days of annual leave that employees are awarded based on their length of service with a company. This is a common practice in many countries, but it is not required by law.

This article provides guidance on the configuration of incremental holidays in Fourth's Workforce Management solution. This would typically be carried out by a system administrator who has access to Job Title and Global settings.

Configuration Options

Holiday increments are created against Job Titles. They specify how many extra days holiday are earnt, and when. Once set up, further configuration is done via Global Settings.

Job Title Settings

• Go to HR > Company Admin > Job Titles > select a Job Title and Edit Default Holidays

Fig.1 - Edit Default Holidays

Full and Part-Time Employees

• To add an increment for full and part-time employees, go to the section 'Holiday Settings For Full Time And Part Time Staff' and select Add Yearly Increment

Fig.2 - Add Yearly Increment - full and part-time staff

A pop-up window will appear.

• Enter values for:
  • Years Of Service - how many years of employment need to be worked for employees with this job title to earn the specified allowance. This can be further specified in Global Settings, explained later in this article
  • Allowance - the holiday allowance (in days) that employees with this job title will have after the 'years of service' is reached
  • Maximum Allowance (if shown) must be used to override the Global Setting Set Default Maximum Days Allowed ? for flexible workers only - leave unticked/blank for full and part-time workers
• Then Save

Fig.3 - Adding a yearly increment

Separate increments will need to be created for each increase. So, for a Job Title to 'earn' an extra holiday day for additional years of service, the steps above must be repeated as required.

The example shown in Fig.4 shows the 'Barista' Job Title as having 28 days for its Basic Holiday Allowance.
Employees with that Job Title will then earn an extra day's holiday for each year of service, up to 31 days for 3 years.

Fig.4 - Yearly holiday increments

Flexible Employees

To add an increment for flexible employees:

• Again, go to HR > Company Admin > Job Titles > select a Job Title and Edit Default Holidays
• Under the section 'Holiday Settings For Flexible Staff', select Add Yearly Increment 

Fig.5 - Add Yearly Increment - flexible staff

A pop-up window will appear.

• Enter values for:
  • Years Of Service - how many years of employment need to be worked for employees with this job title to earn the specified allowance. This can be further specified in Global Settings, explained later in this article
  • Allowance - the holiday allowance (in days) that employees with this job title will have after the 'years of service' is reached
  • Maximum Allowance (if shown) must be used to override the Global Setting Set Default Maximum Days Allowed ?
• Then Save

Global Settings

The following explanations are based on a Job Title being set to receive 1 additional holiday day for each full year of service (as shown in Fig.4).

Three different configuration options can be used to determine when the extra days are applied.

Option 1 - 'Use Annual Holiday Allowance Increments'

This option is the most straightforward. Employees earn an extra holiday day for every full holiday year that they are employed. Each extra holiday day is applied on the first day of each holiday year.

For example:

- Job title settings - Years Of Service

The holiday year runs from 1st January to 31st December
- An employee starts in May 2023
- They will earn an additional day for 1 year's service on 1st January 2025 - having been employed for the full 2024 holiday year

To apply the setting,

• Go to HR > Administration > Global Settings > Edit Default Holiday Settings > Holiday Calculations
• Tick the box against Use holiday allowance increments and then Save

Fig.6 - Global Settings - 'Use holiday allowance increments'

Option 2 - 'Taken from Employee Start Date'

Using this option, employees earn extra pro-rated holiday at the start of the new holiday year.

For example:

- The holiday year runs from 1st January to 31st December
- An employee starts on 5th August 2023
- The Job Title increment is set up for 1 additional year for each year of service
- An additional day for 1 year's service is pro-rated according to the remaining time in the holiday year from their anniversary date

Calculation (and example days)

Number of days between holiday year start date and anniversary date (217 days) ÷ Number of days in holiday year (365)
x
Employee's 'Holidays Allowed' (28 days) = 16.65

+

Number of days between anniversary date and holiday year end date (148 days) ÷ Number of days in holiday year (365)
x
Employee's incremental allowance (29 days) = 11.76

16.65 + 11.76 = 28.41

This is rounded up to the nearest half day, so 28.5.

The employee will receive an extra half-day holiday at the start of the next holiday year (1st January 2024).

To apply the setting,

• Go to HR > Administration > Global Settings > Edit Default Holiday Settings > Holiday Calculations
• Tick the box against Taken from employee start date and then Save

Fig.6 - Global Settings - 'Taken from employee start date'

Option 3 - 'Taken from Employee Start Date + Fourth Back-End Setting'

With this option, employees earn a full additional day's holiday on their anniversary date, during the holiday year in which they reach the relevant number of years service.

For example:

- The holiday year runs from 1st January to 31st December
- An employee starts on 15th May 2023
- An additional day for 1 year's service will be added on 15th May 2024

To apply the setting, please liaise with your Fourth Contact.