What Effects Does the Contract End Date Have on the Employee Profile?

 

This article explains the effects that storing a contract end date has on the employee’s profile in Personio. Use this attribute for fixed-term employment contracts.

Having a set Contract end date does not necessarily mean that the employment will be terminated on that date. Rather, this is the key date on which the employment must either be extended or terminated. Additionally, the Contract end date is also used to calculate an employee's leave entitlement for the year in which they leave the company. Find out more about the prorated leave entitlement calculation here.   

If you have defined a Contract end date for an employee, it will appear as a to-do on your dashboard, as long as you have the corresponding Access rights. You will then have the following options:

dashboard-contract-end-reminder_en-us.png

 

Contract Extension

If you would like to extend the current employment contract with the employee, navigate to the green action button Prolong contract.This takes you to the employee’s profile.  In the Personal data section, click on Edit (blue pen) to enter the newly agreed contract end date. Click on Save. As a result, your employee continues to be in Active status.

In the case where a fixed-term employment turns into permanent, you can leave the contract end attribute blank and delete the contract end date that was originally stored.

Please note that the employee's leave entitlement will be recalculated because the Prorated calculation is based on the contract end date. 

 

Contract Termination

You can use this option to terminate the employment on the previously determined Contract end date. To do so, navigate to the Terminate employment action button. This will take you to the screen where you can terminate the employment of the employee in question. Enter the employment end date and the termination type. You can also optionally enter the date on which notice was given, the date of the last working day and the reason the employment was terminated.

After the data has been entered, the total accrued annual leave based on the contract termination is automatically calculated and displayed. If necessary, this may be manually adjusted by clicking on the little pen.

Click on Terminate to complete the process.  The employee’s status automatically changes to inactive, and the termination of the employee is stored.

The employee remains in Active status until a specific action (contract extension or termination) has been performed.

employee-profile-contract-termination_en-us.png

 

Vacation Leave Calculation

The prorated vacation leave entitlement is calculated based on the contract end date that has been entered. The legal provisions for this are based on Section 5 of the German Federal Leave Act (Bundesurlaubsgesetz; BUrlG).

1st half of calendar year (01.01. - 30.06.) 

If the contract end date is in the first half of the year, the accrued leave entitlement is automatically calculated pro rata.

Example:

Calculation based on January 1.

  • Annual leave entitlement: 24 days
  • Contract end date: June 30.
  • Leave entitlement: 24/12 * 6 = 12 days 

2nd half of calendar year (01.07. - 31.12.)

Employees who were employed for more than six months of the current calendar year automatically receive the full year’s entitlement.

Example

Calculation based on January 1.

  • Annual leave entitlement: 24 days
  • Contract end date: October 31.
  • Leave entitlement: 24 days 

Contract ends during waiting period

If the contract end date is within the waiting time period, the employee receives, independent of the half year in which the date falls, 1/12 of the total annual entitlement for each full month worked.

Example

  • Annual leave entitlement: 24 days
  • Hire date: July 1.
  • Contract end date: November 30.
  • Leave entitlement: 24/12 * 5 = 10 days 

Please note that the above examples refer to the accrual policies in the absence settings (Settings > Absence > Accrual policies > New absence policy).

absence-accrual-policies-new_en-us.png

 

Reminders

By default, administrators, as well as employees with an edit right for the section HR Information, receive a reminder of the contract end 30 days + the total of pro rata accrued leave before the corresponding date (e.g. 30 days + 5 days of remaining leave entitlement = 35 days prior).

 

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