Accrual plans allow eligible employees to accumulate paid time off annually as they work, which can then be used for vacation or sick leave. Typically, accrual leave is quantified in hours, with employees receiving a designated number of minutes for each hour worked. While some companies may impose restrictions on usage, it can generally be utilized for any purpose.

The employee’s ability to accrue leave for each specific month or pay period varies depending on the company’s overall leave policy. Policies for accruing vacation time may be influenced by factors such as an employee’s tenure, their position within the organization, and industry standards.

Companies establish these policies to determine the appropriate amount of leave allocated for each month or pay period. It is crucial to set up adequate accrual plans in the Time Off module for allocations of this type, as these programs benefit employees by enabling them to accumulate paid time off. Employees receive additional time off allocations through these accrual programs based on specific guidelines.

Benefits of Accrual Plans:

Equitable Distribution of Paid Time Off:

Accrual plans enable businesses to maintain a fair and transparent distribution of paid time off. This helps prevent unexpected spikes in employee costs that can arise when numerous excessive leave requests coincide.

Preventing Discrimination and Inequity:

Regularly reviewing accrual records is vital to prevent potential issues like discrimination or disparities in rewards among employees of different ranks. It ensures that corporate policies align with the established accrual rate, promoting fairness.

Promoting Ethical Use of Paid Time Off:

Tracking entitlement is essential for businesses to uphold ethical utilization of paid time off. It ensures consistent adherence to accrual regulations and reduces unforeseen leave-related expenses.

Setting up a New Accrual Plan:

Time Off => Configuration => Accrual Plans

Within the “Accrual Plans” section, you can establish specific rules to automate the allocation of accruals for your employees.

Opening the Accrual Plans option, you can see a dashboard with columns for the accrual plan’s Name, Levels, Time Off Type, and Employees. By using the “New” button new accrual plans can be created.

In the “Name” field, provide a suitable name for the new accrual plan.

In the “Time Off Type” field, select the appropriate time off type from the dropdown list. Options may include Paid Time Off, Sick Time Off, Unpaid, Compensatory days, Extra Time Off, Extra Hours, Extra Legal Time Off, and more.

To set up the accrual plan’s levels, click on the “ADD A NEW LEVEL” button, immediately a new pop-up window opens to configure the levels.

You can opt for a specific time frame in the “Start after” section. The accrual plan will commence from the allocation start date following the specified period. Enabling the “Based on Worked Time” option, the settings will adjust the rate based on the type of time worked, especially when the type is designated as “Working Time.” In the “Rate” field, you can input the rate, which will then be multiplied by hours or days and added to the chosen time off type for the selected period.

Choose an appropriate “Frequency” such as Daily, Weekly, Twice a Month, Monthly, and so on. Then, establish a cap for each accrual using the “Limit to” field. If there are any unused accruals at the end of the current fiscal year, you can determine their fate by selecting an option from the “At the end of the calendar year, unused accruals will be” section. Additionally, you can specify the maximum number of accruals to retain at the end of a year by indicating it in the “Maximum amount of accruals to transfer” field. Once you have filled in these accrual plan details, save them by clicking the “SAVE & CLOSE” button or add another level by selecting “SAVE & NEW.”

Employees will receive extra time off via accrual programs that adhere to specific guidelines. These programs not only provide additional leave but also serve as a means to help employees alleviate stress after extended periods of demanding work and maintain a healthy work-life balance.

Join us on this journey of simplifying time-off accruals with Odoo, and let’s make leave management a breeze. If you have any questions or need assistance with Odoo implementation, customization, or training, our team of experts is here and ready to support you.