Many employers must use the by hours worked accrual rate to satisfy state and local sick time requirements. The laws that require employers to offer sick time also mandate the way in which that time accrues.
But that’s not its sole purpose. It is also a useful accrual rate for part time or temporary hourly employees because it helps keep employees from earning too much time off at times when they may not be working a regular schedule.
For example, an hourly employee might earn two weeks of vacation each year. For a regular full time employee, that would mean 80 hours off each year. A regular part time employee, working 20 hours per week would get 40 hours off each year (two part time weeks). But what do you give an employee that works a variable schedule? This is where the by hours worked accrual rate comes in handy.
Why It’s Useful
Employees working a variable schedule:
Employees with a schedule that varies from week to week or month to month can earn time off based on the actual number of hours they work.
The only tricky thing about this accrual rate for most online time clock systems is that when employees with variable schedules work more than full time, employees could end up earning more time off than is reasonable.
Obviously, this is a rare case. Employees who work full time aren’t usually tracking with this method, and usually when employees work more than full time but still use the by hours worked accrual rate, their employer actually wants to compensate them with extra time off based on the extra hours they put in.
But if you’re one of the employers that uses the rate and wants to ensure employees never earn above a specified amount, setting a cap on this accrual will be important to you.
Employers with sick time requirements:
Employers with mandated sick time that must accrue based on hours worked definitely fall into this category. It is often the case that these employees work enough hours to earn more than the amount required by law. At this point, employers need a system that shuts off the accrual.
Our system includes a setting which caps the amount of time off that can be accrued in a given year based on a selected date.
An Accrual Rate on the Rise
The need for the rate is growing as more localities implement sick time requirements. More and more states and cities each year require employer paid sick time.