Considerations for Processing Vacation Liability
Consider these factors to ensure proper processing of vacation liability payments.
Enroll Employees in Absence Plans
Use the Absence Records task in the Person Management work area to enroll employees in a vacation absence plan.
Create Employee Absence Records
Employee vacation absences reduce the vacation liability balances. When you record a vacation absence for an employee, by default, the current vacation period’s accrued vacation liability amount is reduced by the paid absence.
To reduce the vacation liability in a prior term, use the Vacation Accrual Reduction Date on the absence UI. This reduction date is only used in special scenarios and specifies the vacation period (or term) to reduce the accrued vacation liability balance by the vacation payment.
If both earnings and vacation absences are processed in the same run, the earnings add to the liability first, before the vacation absence reduces it. Depending on how the wage basis rules are defined, a vacation absence element can also contribute to the liability.
Assign Vacation Liability Plans to Employees
In order for vacation liability to calculate, the employee must be enrolled in a vacation plan and be assigned a Vacation Liability plan.
View Wage Basis Rules for Vacationable Earnings
The wage basis rules determine if an element is included in vacation liability calculations. A check mark in the Use in Wage Basis column for the component Vacation indicates the earning is included. The rules create a vacation earnings balance.
Wage basis rules are predefined for all delivered secondary classifications but you must create them for user-defined secondary classifications.
Use the Component Group Rules task in the Payroll area to view the vacation earnings rules for each province.
- Navigate to the Payroll area and select the Component Group Rules task.
- Select a Legislative Data Group and click Search.
- Select the Regional node and navigate in the tree structure to Regional > Wage Basis Rules > Vacation.
- View the vacationable earnings rules for each province.
Configure Earnings Elements
- Is this a vacation payout element?
- Vacation Payout defined by the Vacation Payout rule value selected during element creation.
- Vacation Accrual Reduction Date you enter, that determines the vacation term balance that's reduced.
Override Length of Service
The employee's hire date determines how the length of service of the employee is calculated. If the employee's hire or rehire date isn't the date that should be used to calculate the length of service for vacation pay purposes, use the Vacation Service Date on the employee's calculation card to specify a different date. If the Vacation Service Date is entered, it's used to calculate the employee's length of service.
Override Vacation Liability Province
The Province of Employment on the employee’s calculation card captures the province used for vacation liability calculations. If an employee has a US or ZZ province code and their earnings should be included in Vacation Liability calculations, you can override the province. To override the province for the employee, populate the Vacation Liability Province Override using the Payroll Relationships task under Payroll.
Pay Vacation Liability in Every Payroll
Employees not entitled to vacation time off, for example, part time or casual employees may have the vacation liability paid to them every pay period. You can enable this by introducing a recurring payout element that's processed every pay period. The payout element pays the vacation liability amount accrued in same pay period in which the element is processed.
Assign a Payout Element
Vacation payout earnings reduce the vacation liability. When the vacation liability balance is to be paid to an employee, assign the payout element to them.
Use the Element Entries task in the Person Management work area to assign the element to the employee.
If the payout is for the current vacation term, the Vacation Accrual Reduction Date isn't required. This is the default behavior. If no date is provided, all accumulated liabilities in prior terms are paid out.
If you have to payout the vacation liability for a specific previous term, use the Vacation Accrual Reduction Date on the Entry Values of the Element Entries page. This reduction date is only used in special scenarios and specifies the vacation period (or term) to payout the vacation liability balance.
To process the payout for multiple assignments, assign the payout element to each assignment.