WFM UK: HR: Flexible Holiday Scheme and Calculations Explained

Overview

This article provides a guide on understanding the Flexible Holiday Scheme and relevant Holiday Calculations within HR & Payroll.

Flexible Employee Definition

• An hourly or shift paid employee who works regularly but does not have a standard weekly working pattern
• Does not have a minimum or maximum number of hours that they are required to work in a week
• When they are scheduled to work, their hours of work vary from week to week, dependent on the demands of the business
• A Flexible Employee is set up by selecting Flexible in the Employment Status field within the Employment Details page

Fig.1 - Flexible Employment Status shown on the Employment Details page

Holiday Pay for Flexible Employees

Holiday Pay Rate

This is the payment that a Flexible employee will receive for Holiday taken. 

The calculation is as follows:

(Holiday Days Taken in Current Pay Period) * (Average Summary Rate) * (Hourly or Shift Rate of Pay)

Examples

The above example uses the Fourth-specific concept of the 'Average Summary Rate'. Further information is detailed below:
 

Average Summary Rate

This represents the amount of hours an employee will be reimbursed for when a Holiday day is taken.

The calculation is as follows:

((Total Pay Over Previous 52 Weeks) / (Number of Days Worked Over Previous 52 Weeks)) / (Hourly or shift Rate of Pay)

Examples

Taking Holidays as a Flexible Employee

Days Allowed

This shows the number of available Holiday days an employee has in the current Holiday year.

The calculations are as follows:
 

• For employees who start before the Holiday year start date:

(Average Days per week) * (the number of weeks holiday allowed for employee) * (days difference between holiday year start date and holiday year end date/ days difference between holiday year start date and holiday year end date)

• For employees who start after the Holiday year start date:

(Average Days per week) * (the number of weeks holiday allowed for employee) * (days difference between employee start date and holiday year end date/ days difference between holiday year start date and holiday year end date)

Examples
 

If a flexible employee takes holiday in their first week before any hours have been submitted on a rota for them, they will not be automatically paid in payroll. This is because there is no calculation behind their average summary rate yet, and so no day rate can be calculated.​

It is a business decision whether to pay these holidays if they are allowed to be taken. They will need to be entered manually in payroll unless a flexible holiday override is added to the employee's HR record prior to the holiday being created and authorised on an open rota.

Further key fields related to holiday information for flexible employees:

• Days Taken - Shows the number of holiday days that the employee has taken.
• Days Booked - Displays the number of holiday days an employee has requested, that have been authorised.
• Days Remaining - The number of holiday days that an employee has remaining up to the current date.

The following calculation is used to derive the Days Remaining field:

(Days Allowed) - (Days Taken) - (Days Booked) – (Days Reserved)

Days Accrued

Displays the number of holiday days that an employee has earned up to the current date
It is calculated as follows:

• For those employees that started before the start date of the current holiday year:
  • Allowance x (days difference between holiday year start date to current date/ days difference between holiday year start date and end date)
• For those employees that have started after the holiday year start date:
  • Allowance x (days difference between employee start date to current date/ days difference between employee year start date and holiday year end date)

Example

Flexible Holiday Settings

Reporting on Flexible Employees

There are three Fourth-specific concepts used for reporting on flexible employees. These concepts are for reporting purposes only and do not impact pay received for holiday taken by flexible employees.

These are:

Average Hours/Week

• The Average Hours per Week is calculated looking at the number of hours an employee has worked in all jobs, including multiple employments per week within the last 52 weeks.

• It is calculated as follows:

Average Hours per Week = (Number of Hours Worked) / (52 Weeks)

Average Time per Day

• This shows the value of a holiday day in terms of hours per day. It is the closest estimate to what an employee would have worked were they to have worked on this day.

• It is calculated as follows:

Average Time per Day = (Average Hours per Week) / (Average Days per Week)

Example

Report Example

Average Time per day is used on the Rota page to show the estimated hours this employee would have worked, were they to have worked and not taken holiday on that day.

Fig.2 - Total Hours showing against holiday days on the Rota page

Average Days/Week

This field is used within the Day Rate and Average Time per Day calculations.
It is calculated as follows:

Average Days per Week = (Number of Days Worked) / (52 weeks)

Global Settings

The following Global Settings relate to flexible employees:

Fig.3 - Flexible Employee Global Settings

• Calculation of average number of days worked based on 52, 26 or 12 weeks?
  Set to default of 52 weeks. Allows for the average number of days worked for flexible employees to be based on previous 52 weeks as per current legislation.
• Set Default Maximum Days Allowed
  Allows the maximum number of holiday days entitlement for a flexible member of staff to be set.
• Set Default number of weeks flexible holiday entitlement.
  Allows for the number of weeks holiday entitlement for flexible employees to be specified.​

Back Pay for Additional Holiday Pay

A Global Setting is available to include any additional payments that are in the current pay run within the additional Holiday pay calculation.
 

• Go to HR > Administration > Global Settings > Edit Default Holiday Settings

• Select Holiday Calculations

• Under the Additional Holiday Pay section, the setting is titled Use payments within the current pay run within additional holiday pay calculation

Fig.3 - Use Payments in Current Pay Run Option

By turning the setting on, any additional payments that are in the current pay run within the additional Holiday pay calculation are included.
 

Job Title Settings

The following Job Title settings relate to flexible employees:

Fig.4 - Holiday Settings for Flexible Staff

• Number of Weeks Holiday Allowed for Flexible Employees
  Represents the maximum number of weeks holiday a flexible employee can earn.
• Holiday Pay Amount for Flexible Employees
  Enables the user to stipulate the maximum hourly holiday pay amount for a flexible employee.
• Maximum Number of Hours Holiday Paid Per Day for Flexible Employees
  Allows for the maximum number of hours holiday pay a flexible employee receives to be defined.
• Average Number of Days worked in a week for holiday calculation.​​​
  Allows for the maximum number of days worked in a week to be defined.

Key Reports for Information on Flexible Employees

Holiday Status Report

The Holiday Status Report shows a list of authorised, unauthorised, remaining and removed holidays for a specific location, division and date range as well as the status of each holiday taken.
 

Fig.5 - Holiday Status Report

Holiday Year to Date Report

The Holiday Year to Date report returns a summary of the employee’s holiday fields for a specific location, division and date range.

An employee’s Start Date, Holiday Allowance, Holidays Taken, Holidays Booked, Holidays Remaining and Holidays Accrued are also shown in the report.

Fig 6 - Holiday Year to Date Report

Also See

WFM - Flexible Holiday Articles

Casual Employment: High Level Overview
Glossary and Key Settings: Holidays
Flexible Holiday Calculations
Flexible Employment: High Level Overview
Part Time: High Level Overview
Full Time Employment: High Level Overview