Vacation Liability Negative Payout

Vacation liability is the minimum amount of vacation pay an employee is legislated to receive in a given year according to the provincial statutory requirements.

When an employee is terminated and if the vacation liability balance is negative, you can reclaim vacation liability from the terminated employee. This may occur when employers allow vacation payout payments prior to the employee accruing the vacation liability, otherwise known as advance payments.

Use the input value called Allow Negative Payout on the vacation payout element to enable the option. The values for this option are:

• Yes

• No

To process negative vacation liability, set this value to Yes in the payout element entry.

Note:

• You must create a new vacation payout element to use this new functionality.

This table outlines the behaviour and highlights the differences depending on the values of the Pay Value and Allow Negative Payout input values.

Allow Negative Payout and Pay Value Behaviour

Allow Negative Payout (Yes/No)	Pay Value (Positive/Negative)	Behavior
No	Positive/Negative	Negative vacation liability not processed. No change to existing vacation payout behavior.
Yes/No	Positive	Negative vacation liability not processed. No change to existing vacation payout behavior.
Yes	Negative	All previous terms with negative accrued vacation liability are consumed. Any negative vacation liability payout balance left is processed in the current term.
Yes	Blank	Sum of all previously accumulated liability (negative or positive) processed as payout.