Public Holidays can often be a challenge for payroll officers. One of the biggest reasons for this difficulty is due to having the values based on the Wage Regulation Order of the company's industry, as well as differences in contracts. The way Public Holidays are dealt can vary in a multitude of ways.
This article aims to give you some information on how to deal with Public Holidays in Buddy. It is advised that you inform yourself on how your industry and company should tackle these to select the most appropriate settings for your company.
Basic Pay
Full-Timers and Fixed Hour Employees
In each payroll, full-time employees are paid a fixed basic salary per pay period based on the Pay Schedule used, for instance, a fixed monthly pay. The employee tends to get paid the full amount, regardless of the hours in that period. For example, if you are paying per month, you pay the same monthly salary, whether it is February (a shorter work period) or a month with more working days. This is to ensure that the Salary is averaged out throughout the year in order to reduce volatility in pay.
Public Holidays are automatically included in this basic pay, and there should be no adjustment required for most employees when the public holiday is not worked.
Showing a separate Public Holiday Leave entry in the payslip assures employees they are being paid accordingly.
Variable Hour Employees
When part-time employees work irregular hours, their basic pay is often dependent on the hours they work within a given period. This may often affect their available hours in a period which includes Public Holidays on typical workdays. Hence, similar to Government bonus and leave entitlements, employees on irregular hours are still entitled to Public Holidays on a pro-rata basis. This is generally averaged out based on their worked hours in the last 13 weeks.
Since for Variable Hour employees, the basic salary is dependent on hours worked and leave taken, employers should account for a pro-rata portion of any Public Holiday that falls during the working week. With Buddy, unless you are adding these leave applications yourself, you can select the Auto-Create Public Holiday Leave in Leave Settings to automatically add these.
Overtime Calculations
One thing that the Public Holidays may affect is the overtime and other timesheet calculations. For instance, if you are paying overtime for anyone working 40 hours per week, but you are not including the Public Holiday as a worked timesheet or as a paid leave, then, you might be under calculating the Overtime hours.
The easiest solution is to ensure a standard policy where you add a Public Holiday leave in your Leave Management. One way to add this on Buddy is to also use the Auto-Create Public Holiday Leave in Leave Settings to automatically add these for your employees. (As per above screenshot)
Auto-Create Public Holiday Leave
When a Public Holiday falls under one of the working days (as chosen in the Salary Details), Buddy will automatically create a leave entry of Public Holiday type for it to be shown in the payslip. (This will not impact the Vacation Leave balance).
This feature has three main uses:
- For employees on Variable Hours, as the Public Holiday will be averaged out based on the basic hours of the last 13 weeks (or in the case of Buddy, based on the average hours in the payslips of that period).
- For full-time employees whom you Process Timesheets for, so that overtime is calculated more fairly.
- For typical employees who would like to see Public Holiday listed separately in their payslip
Excluding Public Holidays from Target Hours
This option, found in the Time & Attendance Rules in the Company Settings, is only applicable for those processing timesheets on Buddy. If you have any timesheet rule where you are paying a specific overtime (e.g. Overtime at x2) for Public Holidays, enabling this option will then exclude the Public Holidays from the target hours.
In other words, overtime will be recalculated based on hours excluding public holidays. Let's take an example. Let's say Victor is paid overtime for any hours over 40 hours per week. In this specific week, between Monday to Thursday he worked 36 hours, and then he worked an additional 5 hours on Friday, a Public Holiday. When this option is enabled, Buddy will calculate the following:
- 5 hours on the Public Holiday overtime rate
- 36 hours - 32 hours = 4 hours of overtime in the regular rate
Public Holidays in Leave Balances
In Malta, Public Holidays falling on weekends are not lost, but they are given as an additional vacation leave day to the employees. Therefore, for employees working on the standard Monday to Friday, their vacation leave hours for 2024 would be 192 standard hours + 48 hours in lieu of Public Holidays on weekends. On Buddy, the default entitlement for full-timers will be of 240 hours or 30 days for this reason.
For part-timers, including those on casual hours, Buddy will assign a pro-rata entitlement of the 192 hours.
Add Public Holidays to Leave Balance
When employees work Monday to Sunday, including Public Holidays, one of the standard procedures is to automatically add all the public holidays in the vacation leave balance at the start of the year. This can be done on Buddy by ticking the Add Public Holidays to Leave Balance option in the Leave Settings from the Company Settings page.
By doing so, employees will have 304 hours of leave entitlement, or a pro-rated amount if they are working less than 40 hours per week / part-time employees. This methodology allows employers to avoid having to add Public Holiday leave entries for employees that did not work on a specific day, and rather have a more consistent approach to Public Holidays.
Calculating Backdated Public Holiday as TOIL
Another option is to automatically assign non-worked Public Holidays as a TOIL adjustment, increasing the vacation leave balance.
This can be done from the Leave Adjustments page, working for employees without a fixed weekday structure: See: Calculate Backdated Public Holiday (TOIL) for details.
The calculation estimates different shift-lengths based on the latest timesheet entries, and hence requires the input of timesheets and leave to provide an accurate result.
Responsibility to Check
The above three are all the options provided by Buddy with regards to handling Public Holidays. It is important to review both the contracts and company policies you have agreed upon with your employees, as well as the Work Regulation Orders, to ensure that you pay your employees fairly, without overpaying them at your company's cost.
Often times, public holidays can often be forgotten when setting up your everyday rules. It is recommended that you properly check and trial run any changes in leave or time and attendance settings, as at the end of the day, it is your responsibility to ensure work regulation orders and employment agreements are adhered to in the payslips that you calculate and issue.