Changes to Leave Entitlement Calculations – Buddy (MT)

Why is Buddy updating Leave Entitlement?

Vacation leave appears to be much simpler than it actually is. Although you may have a standard entitlement (e.g. 208 hours for full-timers in 2023), this is not completely precise for all employees

In reality, leave entitlement is much more nuanced. There are multiple factors that impact someone's entitlement, including the following:

the employee's schedule and average working hours
the number of public holidays falling on off days
pro-rata calculations for joiners and leavers
non-accrual of leave during unpaid periods

Rather than using a generic default entitlement for everyone, Buddy will be upgrading its vacation leave entitlement calculation to be more robust and accurate for as many employees as possible.

Why are these changes coming now?

Most of our customers Buddy know how keen we are on providing the most accurate calculations and results. During 2022, we have heavily invested in our AccuPay™ functionality to accurately process timesheets into payroll.

Although we wanted to implement leave changes earlier, we are aware that changes mid-year to leave balances would have caused more disruption than benefit. The change of year is the perfect opportunity for us to upgrade without negatively impacting our active user base.

What exactly is going to change?

There are two main changes coming to the following:

Public Holidays falling on non-working days will be calculated separately from the 192 standard hours
The working days in the Salary Details will impact how leave entitlements are calculated

Hours in Lieu of Public Holidays on Off Days

Up until 2022, we were including the hours in lieu of public holidays falling on weekends with the annual entitlement. This meant that for 2022, the annual entitlement for a full-timer was 224 hours. This would still be accurate for most employees working Monday to Friday, but vacation leave is much more nuanced.

From 2023, Public Holidays will be added to the balance based on the Working Days set in the employee's Salary Details. Therefore, an employee working Monday to Friday will have a different leave balance than an employee working Tuesday to Saturday.

Pro-Rata Calculation for Part-Timers, Joiners and Leavers

Since we are now separating the public holiday hours from the standard 192 hours, Buddy will now utilise the 192 hours as the base calculation for any pro-rata calculation. Buddy will also start calculating the days within the worked period based on the working days of the employee, rather than the defaulted Monday to Friday. This should slightly improve accuracy over the pro-rata calculation of sick leave as well.

For joiners and leavers who worked fixed hours, public holidays will still be added in lieu of their balance.

We suggest that you take a look at our updated articles for more detailed examples and explanations:

When will the changes take effect?

The first change has been included in our final December update and is only applicable from 2023 onwards. This will ensure that any employee logging into their portal from 1st January will see the updated balance, and these will not be updated during the year.

On the other hand, the changes to the pro-rata calculation could impact the leave balances of previous years. Since this will not impact existing employees, we have decided to publish this change on the 16th of January 2023.

This should give ample time for all our users to finalise their leave and payroll for 2022.

What do the users need to do?

By Friday 13th of January, we recommend that all active companies would have:

Finalised payroll and leave for 2022
Carried over any leave, if applicable (see: Carrying Over Leave into a New Year)
Downloaded Leave Situation Reports offline (see: Leave Situation Report)
Ensure that the Working Days are set correctly on the employees' Salary Details

Should you need to access balances from Monday 16th of January, you will only see balances that are using our updated calculation.

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