The holiday season is over and by now all of your team has returned to work.
Although it may seem counter intuitive, now is a good time for businesses to examine employee Annual leave and, where applicable, Long Service leave balances.
Some employees stockpile their leave accruals and over time this creates a significant burden for employers. Outstanding leave balances also represent a significant financial liability to any balance sheet. Remember that when leave is taken or paid out, the rate of pay is the current one at the time when the leave is taken or paid, not the time at which it was accrued.
In fact, researchers, Roy Morgan previously conducted a study of Australian annual leave and found that employees had annual leave accruals of 123 millions days, worth in excess of A$33 billion in wages. This stockpiling of leave accruals by employees was attributed to such reasons as planning for longer holidays; job protection or relying upon their accrued leave as an “income protection policy” in case they lost their job.
Examining leave accruals at this early stage of the year provides you with the opportunity to sit down with your employee and together agree a plan around when and how much leave the employee will take that has lesser impact on your business.
In any of these discussions remember that your approach needs to be reasonable. You must also meet the standards outlined within the National Employment Standards (NES) and may need to meet conditions under a specific award or workplace policy.
Contact & Legal if you have any queries regarding leave accrual management or creation of workplace policy guidelines. We can help you implement strategies to reduce your liability and effectively manage your workforce, whilst maintaining viable levels of productivity.