The By Hours Worked accrual rate is one that some employers must use 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. By hours worked is the fairest accrual rate for all types of employees and the one that employees must use to be compliant.
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. A regular full time employee would get 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, our new feature will be very useful to you.
Employees earning mandated sick time:
Employers with employees that earn sick time 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.
This is why we’ve added a setting to cap the amount of time off that can be accrued in a given year based on a selected date.
An Accrual Rate on the Rise
This accrual rate is definitely not used for most employees in most scenarios but for those that do need it, our update is a welcome addition.
The need for the rate is growing, in fact, as more localities mandate employer paid sick time. Employer paid sick time is required in more and more states and cities each year.