Training Session 14 05 02 2021 Payroll 2 annual leave 1

Summary

The script discusses the importance of annual leave for employees, emphasizing its accrual nature and the need for proper management to avoid large balances. It highlights the challenges of encouraging valuable employees to take time off and the financial implications of leave accumulation, especially when promotions occur. The speaker suggests adopting Serbian practices for leave planning and stresses the benefits of taking breaks for employee well-being and financial management.

Takeaways

• 📊 Annual leave is an entitlement for non-casual employees, accruing monthly and shown on pay slips.
• 🔢 A full-time employee is typically entitled to four weeks of annual leave per year.
• 🗓 There are regulations in some countries, like Serbia, about planning and taking leave within certain periods, which is not common in Australia.
• 🚫 In Australia, there's a lack of rules enforcing the use of annual leave, leading to some employees accruing excessive leave balances.
• 💡 It's crucial for employees to take leave to prevent stress and maintain a healthy work-life balance.
• 📉 High leave balances can be problematic, as they are difficult to reduce once accumulated.
• 💼 Finance professionals should be aware of high leave balances when reviewing clients' reports, as they can impact financial planning.
• 💰 When an employee gets a raise or promotion, their accrued leave is revalued at the new salary rate, increasing the company's financial liability.
• 🔄 Active management is required to ensure employees use their leave, especially for valuable employees who are hard to replace.
• 🏖 Taking a holiday is important for employee well-being and productivity, and should be encouraged by employers.
• 📈 For companies, reducing leave balances is important for financial health, especially when considering promotions and salary increases.

Q & A

What is the meaning of 'accrued' in the context of annual leave?

In the context of annual leave, 'accrued' refers to the process of earning a certain amount of leave each month that is added to an employee's leave balance, which is then shown on their pay slip.

How is annual leave typically shown on an employee's pay slip?

Annual leave is typically shown on an employee's pay slip as a separate item or as part of the pay advice, indicating the amount of leave that has been accrued and is available for use.

What is the standard amount of annual leave for a full-time employee?

A full-time employee is typically entitled to four weeks of annual leave per year, as mentioned in the script.

Why is it important for employees to take their annual leave?

It is important for employees to take their annual leave to prevent burnout and stress, as well as to maintain a healthy work-life balance, which is beneficial for both the individual and the company.

What challenges might arise if an employee accumulates too much annual leave?

If an employee accumulates too much annual leave, it can lead to difficulties in managing their leave balance, potential stress from not taking breaks, and financial implications for the company if the leave is not taken and has to be paid out at a higher rate later.

What is the situation in Serbia regarding planning and taking annual leave?

In Serbia, there are rules around planning and taking annual leave within a certain period of time, which is considered smart and something that could be beneficial if implemented in other countries like Australia.

Why is it difficult to manage the leave of highly valuable employees?

It is difficult to manage the leave of highly valuable employees because they are often needed all the time, making it challenging to encourage them to take time off without disrupting the workflow of the company.

What is the financial implication of an employee's leave balance when they receive a pay raise or promotion?

When an employee receives a pay raise or promotion, all of their accrued leave is recalculated at the new rate, which can have a significant financial impact on the company.

How can finance professionals use the information about an employee's leave balance?

Finance professionals can use the information about an employee's leave balance to assess the financial health of a company, plan for future payouts, and ensure that employees are taking their leave in a way that is financially prudent.

What is the potential consequence of not actively managing an employee's leave balance?

The potential consequence of not actively managing an employee's leave balance is that it can lead to a large accumulation of leave, which may become difficult to reduce and could result in significant financial liabilities for the company.

How can companies encourage employees to take their leave?

Companies can encourage employees to take their leave by actively promoting the importance of taking breaks, setting up policies that require or incentivize the use of leave, and creating a culture that supports work-life balance.

Outlines

00:00

📅 Annual Leave Entitlement and Its Importance

This paragraph discusses the concept of annual leave, which is a right for employees who are not casual. It explains that annual leave is accrued monthly, meaning employees earn a certain amount of leave hours each month that are added to their total balance. This balance is reflected on their pay slips, which they receive with each payment. The speaker mentions that a full-time employee is entitled to four weeks of annual leave per year. They also highlight the issue of employees not taking enough leave, which can lead to a large accumulation of leave hours. This can be problematic, as it can affect both the employee's well-being and the company's finances. The speaker suggests that there should be rules similar to those in Serbia, where planning and taking leave is more structured. They also touch on the financial implications of leave balances, particularly when employees are promoted or their salaries are increased, as the old leave hours are then paid at the new, higher rate.

Keywords

💡Annual Leave

Annual leave refers to the time off granted to employees each year, separate from public holidays. It is a fundamental employee entitlement that allows for rest and relaxation. In the script, it is mentioned that annual leave is accrued, meaning employees earn a certain amount of leave each month, which is shown on their pay slip. The concept is central to the video's theme of work-life balance and employee welfare.

💡Accrued

The term 'accrued' in the context of the script refers to the accumulation of annual leave hours that an employee earns over time. It is directly related to the employee's continuous service and is a key aspect of the discussion on how leave is managed and utilized. The script highlights that as employees work, they bank these hours, which can be used for annual leave.

💡Pay Slip

A pay slip, also known as a pay advice, is a document provided to employees that details their earnings, deductions, and the net amount paid. In the script, it is mentioned as the record that shows the accrual of annual leave hours, emphasizing its importance in tracking employee entitlements.

💡Full-Time Employee

A full-time employee is someone who works a set number of hours per week, typically more than part-time or casual employees. The script specifies that full-time employees are entitled to four weeks of annual leave per year, which is a standard benefit that underscores the importance of work-life balance.

💡Leave Balance

Leave balance refers to the total amount of annual leave hours an employee has accumulated but has not yet taken. The script discusses the issue of employees accruing more leave than they use, which can lead to a high leave balance, a situation that organizations need to manage actively.

💡Stress

Stress is a state of mental or emotional strain or tension resulting from demanding circumstances. The script mentions that not taking holidays can lead to stress, which is detrimental to both the individual and the organization, highlighting the importance of taking breaks for mental health.

💡Promotion

Promotion in the workplace refers to an advancement in job rank or status, often accompanied by an increase in pay. The script notes that when an employee is promoted, their accrued leave is recalculated at the new, higher pay rate, which is an important financial consideration for both employees and employers.

💡Financial Perspective

The financial perspective in the context of the script pertains to the cost implications of leave management for a company. It is important for finance professionals to consider the financial impact of leave balances, especially when employees are promoted or their salaries are raised, as this can affect the company's payroll costs.

💡Employee Welfare

Employee welfare refers to the well-being and satisfaction of employees in the workplace. The script emphasizes the importance of taking annual leave for employee welfare, as it contributes to reducing stress and maintaining a healthy work-life balance.

💡Work-Life Balance

Work-life balance is the equilibrium between an individual's work responsibilities and personal life. The script discusses the significance of taking annual leave as a means to achieve this balance, which is crucial for preventing burnout and maintaining overall well-being.

💡Leave Management

Leave management involves the administrative processes related to employee leave, including accrual, tracking, and utilization. The script touches on the need for active leave management, especially for high-performing employees who may be reluctant to take time off, to ensure a healthy balance of work and rest.

Highlights

Annual leave is an entitlement for employees that is accrued monthly.

Each month of work earns employees a certain amount of leave hours.

Accrued annual leave is reflected on the employee's pay slip.

A full-time employee is entitled to four weeks of annual leave per year.

There are rules in Serbia about planning and taking leave within a certain period.

In Australia, there is a lack of structured planning for taking leave.

Employees can accumulate excessive leave hours, such as 400 hours or more.

It's challenging to encourage valuable employees to take their leave.

Taking a holiday is crucial for reducing stress and maintaining well-being.

Accruing more leave than taken can lead to a difficult-to-reduce balance.

Finance professionals should consider leave balances when reviewing client reports.

Leave balances can affect financial considerations, such as salary increases.

When an employee's salary increases, their accrued leave is recalculated at the new rate.

It's important for clients to manage their leave balances to avoid financial implications.

Employees starting at a lower salary and progressing can have their leave recalculated at a higher rate.

Active management is needed to reduce excessive leave balances among employees.

The importance of taking breaks and resting is highlighted from both a personal and financial perspective.

Transcripts

um okay so uh

one of the entitlements that you would

have seen that everybody who

isn't a casual employee is entitled to

is annual leave

and annual leave is um accrued

and by accrued i mean um each month that

you work

as an employee um you get a certain

amount of hours which are banked

so to speak for you um and it's shown on

your pay slip

your pay slip is the pay advice that you

get when you get a payment

and then um you get to add to that um

tally each month and then as you take

and you'll leave

you're actually reducing it when we're

setting it up next week i'll show you

um you know what the rules are around

setting it up but just for now

know that a full-time employee will get

four weeks of

annual leave per year um i mentioned to

you before that in serbia there are

there are rules around

planning and taking your leave within a

certain period of time i think it's

actually quite smart

and i think that we should do something

like that in australia but unfortunately

we don't

we spend a lot of time planning and

encouraging

employees to take their leave so that

they don't end up with

400 hours like christina and i ended up

with 500 hours

because we never took leave but that's a

different case

we have some employees who entered up

with three 400 hours

we have to actively manage um getting

them to reduce it

generally they're the really valuable

employees that you need all the time

so it's really hard to give them up to

get them to take the leave but taking a

holiday is important

and when someone doesn't take a holiday

they get stressed it's not good for

anybody

and when you're not when you're accruing

more leave than what you're taking

you can almost never reduce the balance

so it's really important that

they do another consideration you know

as finance professionals for you to

consider when you're you know looking at

your clients

reports and some employees will just

send off a report

and not think about it but if you think

if you look at the numbers and you go oh

there's people here who have got a lot

of leave what you have to consider

um each time that you raise somebody's

pay or salary or they move into a

promotion or anything like that

all of the old leave that they had comes

out at the new rate

so it's another reason why i mean

there's a lot of reasons taking a break

and having time to rest is really

important

but also looking at it from a financial

perspective from your clients

perspective

it's important that they are reducing

that leave balance if they're

progressing people through their

um through through their company then

you know they might start off as a

junior on a very low salary

and work their way up after four years

and then all of those hours that they

didn't take

all are payable at the higher rate so