For a small company with a few employees, keeping track of leave might seem fairly easy. An employee asks for time-off, the business checks this against their leave balance and entitlement, and either approves or denies the request. But factor in that different types of leave have different rules for calculating entitlements and payments – whether it's annual or public holidays, parental or sick leave – and suddenly the job of tracking and managing leave becomes a much more complicated task. Especially for a large enterprise or a company with employees that work irregular hours or schedules.
Under the Holidays Act 2003, businesses are legally bound to grant each employee their correct leave entitlements and pay them when they are entitled to it. Employers must also keep accurate records of the leave each employee accrues and takes, as well as the daily hours they work and the pay for those hours.
Having an accurate, efficient leave management system is crucial for reducing or eliminating errors and keeping your business on the right side of the law.
In recent years, there have been numerous high-profile cases of organisations coming a cropper by not managing and paying leave properly, and employers can end up owing large backdated leave payments or incur fines from the Labour Inspectorate or Employment Relations Authority (ERA) for not complying.
Aside from helping meet your legal obligations, effective leave management helps keep your company running smoothly and can lead to a reduction in costs.
Employees taking time-off has a significant financial impact on a company’s bottom line, with added expenses like finding, paying, and managing contractors or temporary workers, or having existing employees do overtime.
If you properly plan your team members' leave, you can do your utmost to ensure you have sufficient cover, rather than having to scramble and risk getting caught short. Your employees will likely forgive situations beyond management's control, such as a contagious flu, but no one wants to regularly take on extra work because the company didn't properly plan holiday cover.
Good planning will help the business maintain productivity and the quality of its goods or services, which will then keep your customers satisfied.
Ensuring your people get the right amount of time-off also keeps them healthy and happy. Taking leave from work is essential for everyone: it improves work-life balance, reduces stress (and unscheduled days off), and strengthens long-term performance.
If employees know their leave requests are handled fairly and that they are getting their proper leave entitlements, they will have more confidence and trust in your business, which will further motivate them to help you succeed.