Changing an employee's Normal Hours per week

ANSWER ID:22752

The Holidays Act 2003 stipulates that employees are entitled to a minimum of four weeks annual holiday each year. Ensuring that all employees receive their full entitlement each year is an important part of an employer’s obligations under the Act. MBIE states that when an employee’s work patterns change, it is important to ensure that existing holiday entitlements that are held in days or hours are accurately updated to reflect the employee’s new work pattern. If this is not done, there is a risk that an employee may not be given their full entitlement based on their current work pattern. To see MBIE’s wording and guidance on this, refer to the example on page 32 of the MBIE Holidays Act guidance document:

https://www.employment.govt.nz/assets/Uploads/d53229842c/holidays-act-2003-guidance-holidays-leave-.pdf

An employee's Normal hours / day and Normal days / week values make up their Agreed Definition of a Week, which is used to manage entitlements and calculate rates for the payment of leave. When you update an employee’s Agreed Definition of a Week, MYOB Payroll will either ask or automatically recalculate the existing balances in days or hours, to reflect the new working pattern and keep the balances in weeks unchanged.

To set how the system will handle changes to Normal Hours

Go to the Tools menu and select Options.
Go to the Leave tab.
Under Behaviour when changing Agreed Definition of a Week, select one of the following options:
- Always ask whether to recalculate the Annual Leave Balance - When you change the Normal hours / day, a confirmation message will appear. This message lets you choose to recalculate the employee's hourly/daily Annual Leave balances and entitlements, so that the weekly values stay the same, or recalculate the weekly values so that the hourly/daily values stay the same.
- Always recalculate the Annual Leave balance in Days/Hours - When you change the Normal hours / day, the system will automatically recalculate the employee's hourly/daily Annual Leave balances and entitlements, so that the weekly values stay the same.
  - You can tick the Ask only when Annual Leave balance in Days/Hours would be reduced to display the confirmation message when the change to the employee's Normal Hours would reduce their entitlement, and recalculate the hourly/daily values automatically otherwise.

Before you begin

Print the affected employee's accrued leave report for your records prior to making any adjustments. This report can be accessed by going to Reports > Employee Reports > Employee Holidays.

To reduce an employee's Normal Hours per week

Go to the Maintenance command centre and click Maintain Employees.
Select the applicable employee.
Click the Leave Details tab.
Enter the required values in the Normal days/week and Normal hours/day fields. This will adjust their Normal Hours per week.

If the system has been set to ask you when the Normal Hours values change, a confirmation message will appear:

Click Yes to recalculate the hourly/daily Annual Leave values, leaving the weekly values the same.
Click No to leave the hourly/daily Annual Leave values the same, which will recalculate the weekly values instead. This is not recommended, as it can result in the employee's entitlement being set to less than their required entitlement under the Holidays Act.
Click Cancel to discard the changes to the Normal days/week and Normal hours/day fields. No recalculations will be made.