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LD-Payroll – Feature Focus: No Negative Leave

Caroline Mulroney - Jan 12, 2023

Background: For permanent employees, Employers are required to provide paid leave for a number of different reasons.  Some of these reasons have annual allowances and are earned by working for the organisation.  The most common are: Annual Leave (AL) for holidays, and Personal (or sick) Leave (PL).  In this modern age, Personal Leave is able to be used for the employee in question or their close family member in that the employee would need to care for them when they are unwell, e.g. a child or spouse/partner who is too unwell to care for themselves.

While the annual allowances – typically 20 days for AL and 10 days for PL – are set by the Award or other employment legislation relevant to the Employer, the leave is earned by working. For example, if AL allowance is 20 days per annum, for each full-time week worked, 0.3846 days of leave is earned (assuming an 8 hour work day, this translates to 3.0769 hours).

With that said, why is a feature of ‘No Negative Leave’ useful?  To answer this question, lets ask another: what happens if an employee needs to take more time off than they have earned?

The Employer may choose to book and pay leave as if the employee had enough leave owing.  In this case, the employee will end up with a negative leave-owing balance.  There are many reasons why an Employer may be uncomfortable with this, such as an unreliable employee who frequently just doesn’t turn up, or a brand-new employee who has not proved themselves yet.

Before this feature was introduced, if the Employer didn’t want a resulting negative leave-owing balance, the Payroll Officer would need to work out how much Leave was expected (as the employee would earn some more in the current pay period) and book just enough leave to consume it.  Such a long-hand approach is very tricky and prone to errors – so very quickly, Logical Developments introduced the ‘No Negative Leave’ feature.



How does it work?
    • The ‘No Negative Leave’ is applied to the potential 4 leave types that have allowances that are earned:  Personal or Sick/Carer Leave; Annual Leave; Conference Leave; and Time Off in Lieu (TOIL).
    • The Payroll Officer can book the Leave according to the actual ‘calendar’ time absent and what type of Leave the employee is actually using, e.g. Annual Leave.  This will then clearly show in the Payday records as being away.
    • In the Payday calculations, the system will calculate the amount of leave accumulated according to legislated rulings, add this to the existing balance owing and compare to the leave booked.  If ‘No Negative Leave’ is flagged, then the lesser is paid – either the amount of leave owing or the time booked.
    • Other factors taken into account (whether or not ‘No Negative Leave’ is flagged) are normal work days and public holidays.  The Payroll Officer books the leave based on the calendar period the employee is away.  LD-Payroll analyses the employee’s standard work days, e.g. they don’t work on the weekend and there are public holidays.  So, they may be away for 2 weeks, i.e. 14 days, but their AL is only reduced by 8 days.

To further assist the Payroll Officer, the function may be turned on and off as needed.  A typical scenario would be a relatively new employee.  They have started their employment with ‘No Negative Leave’ enabled.  They come to the Employer as a family member needs their care but this would fully consume their owed leave and create an unfavourable financial situation.  The Employer agrees to allow a negative leave balance owing for a temporary period.  When the crisis finishes and the employee returns to work, the ‘No Negative Leave’ is re-enabled.  As the employee works from week to week, the negative balance owing slowly returns to positive amounts.


If you'd like to read about other quality-of-life improvements we've made for our clients, check out the 'News' section of our website – and if you have questions or a problem in need of a logical solution, get in touch!  We'd love to hear from you.