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.