Step 6: Configuring Absences and Accrual Policies

Once you have created and assigned all the work schedules, it is time to configure the absences and accrual policies. Absences include, for example, vacation, sickness or parental leave. This article will first describe how to create absences without accrual policies (such as sickness), and then build on this to explain how to set up absences that are subject to accruals (such as vacation).

Absences Without Accrual (e.g. Sickness)

For absences that are not subject to accruals, you need to record the number of days rather than deduct absences from an accrual policy. To set up Sickness absences, go to Settings > Absence. There, you can either create a new absence type or rename an existing absence type and configure it as required.

First, define the absence category the absence type you have created should be assigned to. You can find further information on the effects and functions of absence categories here.

Please note that it is mandatory to define an absence category when saving your absence type's general settings.

You can then decide whether employees are allowed to enter half days and whether substitute requests should be optional, required or disabled. The option Allow employees acting as substitutes to request this absence specifies whether the chosen substitute may also request an absence, such as vacation, home office or sickness, during the employee's absence.

Validity Settings

In the Valid on section, you can use your work schedule to determine the days of the week on which the selected absence should apply. Absence days are calculated based on the overlap between the work schedule and the days on which the absence type applies.

Absences Count As Time Off

If you enable the Consider attendance days during absence period as overtime? function, all hours worked during a period flagged as an absence in Personio will be counted as overtime. We recommend that you enable this function for all absence types that are considered as actual absence periods in your company (e.g. Paid vacation, Sickness and Special leave).

You can find further information on the Consider attendance days during absence period as overtime? function and its effects in this article.

Absences With Accrual (e.g. Paid Vacation)

For absences that are subject to accrual, be sure to check the Build accruals checkbox. Once this has been enabled, you can set whether days from the previous year can(not) be carried over into the following year, or can only be carried over up to a certain point (usually March 31) in the following year. This is a company-specific decision that you only have to make once. You can then also decide whether substitute requests should be optional, required or disabled.

Please note: The import functionality for absences is only available if substitute requests are not set up as mandatory in the system. Once the absences have been imported into Personio, you can then select the "required" option.

Integrating Leave Entitlements Into Accrual Policies

Once accruals have been enabled for an absence type, you have to create at least one accrual policy. Rules can be assigned to accrual policies. Which rules you assign depends on how vacation days are allocated in your company. Questions to ask yourself include:

• How many different leave entitlements are there in the company?
• Is the total vacation allowance always allocated to all employees at the beginning of the year, or does this take place on their respective hire date?
• Do employees receive their total leave entitlement all at once or prorated every month?

Creating Absence Accrual Policies

There are three steps involved in creating an accrual policy. We explain these in detail below.

Step 1: Basic Information

In the first step, determine how many vacation days the policy should contain, the period for which it is valid and when it should accrue. If the entitlement always accrues at the beginning of the year, an employee who starts on November 1, 2018, for example, will initially receive 2/12 x 24 days = 4 days and then another 24 days on January 1, 2019.

You can also select the Enable waiting time? option. This option will only appear if you have selected the Grant entitlement every year option. In the screenshot above, an employee with 24 vacation days per year would be entitled to 2 vacation days per month. You can edit this number as required or accept the suggestion shown. You can find more detailed information on leave entitlement calculation during the waiting period here.

Step 2: Prorated Calculation 

If we assume that an employee does not start until November 2, they would, using the settings in the screenshot above, initially be assigned 1/12 x 24 days = 2 vacation days. Monthly prorated means that an employee is only entitled to vacation for every full month at the company. There is therefore no entitlement for November.

The Termination date setting allows you to determine whether your employees' leave entitlement should automatically be reduced if you enter a contract end date or a termination date that falls in the first half of the year.

If the contract end date/termination date is in the second half of the year, the employee always receives their full leave entitlement. A yearly accrual policy (step 1: grant entitlement every "year") is a prerequisite for this.

If the contract end date/termination date is within the first six months of employment, prorated calculation takes place regardless of whether or not you have enabled the waiting time function.

Step 3: Extra Days

In the final step, you define whether leave entitlements are to be increased depending on employees’ length of service with the company.

If you select Yes here, enter the number of extra day(s) per year of employment after the hire date. You can add any number of policies. The Grant extra days with the start of next entitlement period checkbox allows you to define the start date of the next entitlement period as the reference date on which the entitlement is to accrue instead of the hire date. The Add 1 extra day(s) 1 year(s) after hire date accrual policy would in this case result in an employee who joined the company on October 1, 2017, receiving an additional vacation day on January 1, 2019.

Assigning Accrual Policies Individually

Once you have created all your accrual policies, you can assign them to your employees. To do this, go to the Absence tab of the Employee profile and select the Set policy now/Change accrual policy option in the corresponding absence type, e.g. paid vacation.

When assigning a policy for the first time, select the Assign since hire date option. For detailed information on the different policy application rules, please refer to this article.

Bulk-Editing Accrual Policies

You can use bulk editing to assign the required accrual policy to several employees simultaneously.
To do so, simply use the checkboxes to flag all the employees who are to be assigned the same accrual policy (usually leave entitlement). You can then select the appropriate absence type (e.g. paid vacation) via Actions > Change accrual policy and assign the required accrual policy to the selected employees.

This absence policy is then assigned to each of the selected employees and, as a result, they each accrue the corresponding leave entitlement.

You can then see how many employees have been allocated a policy under Settings > Absences > Paid vacation.

Archiving and Deleting Accrual Policies

If you wish to prevent an accrual policy from being assigned to any employees or serving as the basis for any leave entitlements, you can delete the policy in the settings under Absence > Paid vacation.

Please note that accrual policies cannot be deleted as long as they are assigned to one or more employees. If you still wish to remove the policy as an option for future selection, you can archive it.

Archived accrual policies are no longer shown as an available option and cannot be assigned to employees. Archived policies can be found in Settings > Absences > Paid vacation > Accruals > Archive. The archive also shows details on when the accrual was archived and by whom, and how many employees the accrual is still assigned to.

Please note that archived accrual policies cannot be restored. If you want to restore an archived accrual policy, you will need to recreate it using Add accrual policy.