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Annual leave in advance vs LWOP

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#1 Lees75

Posted 05 February 2013 - 07:08 PM

Our company has always allowed leave without pay when requested, rather than annual leave in advance. Typical scenarios have been new staff with a holiday already booked, or more recently, an army wife whose husband was granted last minute leave from his overseas deployment, etc Noone has ever requested annual leave in advance and we have never really given it any thought, assuming that LWOP made better business sense.

But our new office manager has challenged my thinking, so my boss and I have some decisions to make before we go changing policies.  The office manager's thinking was...
1. You are paying the annual leave and loading at the current rate of pay, rather than at the rate of any pending pay-rises......makes sense.
2. You don't get staff away from the business for weeks at a time over multiple occasions during the year - I.e. 4 weeks unpaid leave plus 4 weeks annual leave.....makes sense.

How do other workplaces do it?

What would employees prefer?

What do managers/payroll/business owners prefer?

Does anyone have any links to info comparing the 2 systems?

#2 msro82

Posted 05 February 2013 - 07:13 PM

Our workplace does not offer leave in advance. We have a leave without pay option and we can also purchase additional leave (obviously advance thinking is needed here).

From a business perspective leave in advance is quite smart, what happens if that person leaves without paying it back? Does the business have a way to recoup this?

#3 Wigglemama

Posted 05 February 2013 - 07:25 PM

At my workplace, we have annual leave which is an entitlement, so earned and remaining in our balance after the starting date anniversary or "pro rata" annual leave, so leave currently being gained at each pay fortnight but not cleared as "entitled annual leave" until the starting date anniversary-this I guess would be "annual leave in advance". You can use it but only when you have  exhausted all your entitled annual leave.

I work for NSW Health as a midwife.

#4 SeaPrincess

Posted 05 February 2013 - 07:57 PM

The issue with annual leave in advance is that someone might leave the company owing money.

LWOP isn't an entitlement, so you don't have to authorise it (although under the circumstances stated, I would think that it probably would be bad form not to).  I would be more inclined to try to get LWOP viewed as something to be used in exceptional circumstances rather than being an option to access extra leave on a regular basis.

#5 -Emissary-

Posted 05 February 2013 - 08:45 PM

Our company offers both.

It depends on what the employee wants - whether they want to accrue the leave for another holiday down the track or whether they want to be paid so it doesn't disrupt their cash flow.

On your 2nd point - can't someone just still take 8 weeks - 4 weeks of their leave and 4 weeks of leave in advance? It's a matter of whether the boss will approve it, no?

Payroll? No idea. It's all done through the system and our payroll officers just reconcile it to ensure people did the right thing through their time sheets. The system calculates the entitlement based on whether the person used the Annual leave code or the Unpaid leave code.

I don't think my FC or my MD really cares how people accrue and request their leave. They only get concerned when people accrued too much leave and won't take it..

#6 Peppery

Posted 05 February 2013 - 08:49 PM

As previously stated, if an employee leaves with a negative leave balance it would be difficult to recover the money.

1. Staff are not allowed to accrue huge leave balances. We believe staff should take 4 weeks a year to recharge. Yes, pay rises increase the value but managing the amount of leave owing negates this.

2. Leave without pay is not an entitlement, if the business is not in a position to offer it then don't. We don't have blanket leave without pay rule, if a staff member asks we assess and if rejected then we explain why

#7 GoBack2Bed

Posted 05 February 2013 - 09:01 PM

I've worked at places that allow you to accrue up to two weeks leave in advance on the basis that if you leave the money owing would be recouped with your two weeks notice.

Also important to note that your employer cannot force you to take lwop if the closure is enforced, ie Xmas leave because whole business closes for two weeks.

#8 au*lit

Posted 05 February 2013 - 09:14 PM

I've never worked anywhere where LWOP was the norm. It's usually only been available when all other options are exhausted. For holidays, leave in advance has been preferred.

If the person leaves before earning the leave, it's taken out of their final pay.

#9 YodaTheWrinkledOne

Posted 05 February 2013 - 11:06 PM

How do other workplaces do it?
In the wokrplaces I have been in, I could only access LWOP if I had exhausted all my available annual leave.  And there was/is not automatic approval for LWOP - person requesting has to make reasonable case.

DH has never been able to access annual leave in advance.  If he has no annual leave, he asks for LWOP.  He normally gets it.  (This hasn't really happened so much once he had access to long service leave)

What would employees prefer?
Probably LWOP.  Means employees are not in debt to their bosses.

What do managers/payroll/business owners prefer?probably that staff just use the leave that they have an don't ask for extra.

Does anyone have any links to info comparing the 2 systems? Nope

In several workplaces I have been in, the leave loading was paid as a lump sum for all staff in a pay period each December.  You could request to have it paid in advance when taking your leave through the year, but I don't know anyone who did.  Most people liked the extra money just before Xmas.  And thus the liability of leave loading payments was discharged annually by the employer.

We are not allowed to accrue more than 8 weeks of annual leave at any one time.  They prefer it to not go past 4 week though. HR starts sending out warning letters when it hits 6 weeks and you must show how you will reduce your leave in the next 6 months.

#10 Julie3Girls

Posted 06 February 2013 - 07:00 AM

Our company recently stopped leave in advance. I'm assuming it was a bottom line on paper kind of thing ... We are part of a large organisation, lot of people. Lots of budgets, goals etc. 4 weeks leave is always budgetted in for the year and when budgets are tight, last thing they wanted to be doing was paying for people to go on holidays, getting paid when they haven't accrued the leave.

LWOP is an option when no leave is left.  But it's all at managers discretion, and excessive leave, even with your direct managers approval will be picked up on reports and will need to be justified. I think in general, the policy allows for 2 weeks of LWOP before you need to really start justifying.  Of course, that is going to depend on your position, how much work you have etc.

#11 rocketsurgeon

Posted 06 February 2013 - 07:46 AM

We have LWOP, leave in advance and purchased leave. They are only options when the leave balance is exhausted. The employee has the choice and subject to organisational needs, it is not usually a problem which option they choose. With leave in advance, if the employee leaves then their final pay is adjusted.

The issue management is most concerned with is large accrual of leave. A former colleague had the dubious honour of having the highest leave balance in the organisation – 65 days. She kept ignoring HR’s recommendation to take leave, finally HR directed her to take 5 weeks in the middle of winter, to reduce it to 40. How anyone can have such a large annual leave balance is beyond me.

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