Benefits>>Leave>>Leave Transactions>>Pay in Lieu of Leave Taken
Pay In Lieu of Leave Taken
The application allows for Pay in Lieu (of Leave Taken) transactions i.e. the employer ‘buys out’ an employee’s unused Leave at full price or at a negotiated price. Once a Pay in Lieu transaction is entered, the employee’s leave balance is affected and is adjusted accordingly.
This feature is useful when an employee is leaving the company has to be paid for unused Vacation Leave.
How does it work?
Before we can enter Pay in Lieu records, however, there are a few prerequisite steps:
- Setup the Pay in Lieu Transaction-Payroll Link. Navigate to: Payroll>> Process Payroll>> Employee Transactions>> Transactions-Payroll Linkages OR Personnel>> Personnel>> Transactions
- Setup the Leave-Payroll Link
- Ensure that the employee has an active Pay Profile record (Payroll>> Employees>> Pay Profile)
Step 1: Enter the Transaction-Payroll Linkage (if not already done)
Payroll>>Process Payroll>>Employee Transactions>>Transactions-Payroll Linkages
This will allow for the application to calculate the employee’s Pay in Lieu.
Module Code/Name: Select the module being linked to the payroll transaction.
Link Description: Enter a user defined description for the linkage.
Link Transaction: Select Pay in Lieu of Leave Taken.
HR Code/Description: Select the leave code being linked to the payroll transaction.
Payroll Type: Select the payroll type for the payroll code.
Payroll Code/Description: Select the payroll code that is being paid.
Pay Group/Name: Select the pay group for the transaction.
Remember, Transaction-Payroll Linkages must be created for each Pay Group.
Step 2: Ensure the employee has an Active Pay Profile Record
POWERpay>>Employees>>Pay Profile
Step 3: Enter a Pay In Lieu of Transaction
Number of Days Bought: Enter as per the agreement with the employee.
Percent to Apply: Days can be bought at 100% of the value (the employee’s hourly rate x the number of days bought x the number of hours per day ) or at any percentage agreed upon by the employer and employee.
Cycle to Pay Employee: Enter accordingly.
Click on the diskette icon to save
Step 4: Post the Record
Posting the record triggers an entry into the Cycle Changes for the Cycle selected so that the employee can be paid. Note, you cannot update, delete or unpost a posted Pay in Lieu of Leave record. All changes must be done before the record is posted. Once the record is posted, it will be archived and you will not be able to make changes
Once successfully posted, the application will notify you.
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