Time Tracking: Creating policies

Table of Contents:

Basics
Breaks
Work Hours
Overtime
Absences

When creating Time Tracking policies, it’s important they are set up to meet your organization's needs and legal requirements. Hence, policy creation is restricted to platform Super-admins and Admins. Super-(admins) can start creating policies by navigating to ‘Time Tracking’ > ‘Policies’ > ‘Actions’ > ‘New policy’.

Basics

The first policy creation tab is titled ‘Basics’. Here, you’ll define the basic definitions and rules for the policy. The fields containing asterisk next to them are mandatory:

• Policy name* - define the name of this policy for clear structure and organization of your policies.
• Add description - this is optional, yet useful to give a brief understanding of what the policy includes.
• Cycle frequency* - the available options are weekly, biweekly or monthly. The cycle frequency defines the frequency at which timesheets need to be submitted.
• Cycle start* - cycle start determines when the new timesheet gets created. The cycle will then repeat every either week, or 2 weeks or every month on this chosen day (the repeat frequency depends on the one chosen in ‘Cycle frequency’). Cycle start date can also be a date in the past.
• Submission deadline* - define the number of days after the cycle ends for the timesheet submission deadline.
  • For example, let's say it's a weekly cycle that starts on Monday and ends on Sunday. The submission deadline is 3 days. This means timesheets can be submitted next Wednesday.
• Submission reminder:  An automatic reminder will be sent to the employee and approvers this many days before the submission deadline (defined above) to ensure time sheets are submitted and approved on time.

By default, the toggle for break inclusion in the Time Tracking policy creation is off. However, should you like to define break rules for your organization, simply click on the toggle for it to turn purple. When setting up the break rules, you’ll have to:

• Minimum duration* - this is calculated in minutes. Each break that employees record must meet the minimum break duration requirement. In the settings below, you can choose whether employees will or will not be allowed to submit a sheet with a shorter break than defined here.

Break rules

These are guidelines set by Super-(admins) to ensure employees take necessary rest periods during their workdays. Multiple rules can be added. To start creating them, click on ‘New break rule’:

• Work duration* - this is the time worked on a given day. Define the number of hours that must be tracked before the break duration rule applies.
• Break duration* - the number here should be greater than or equal to the minimum break duration that’s set above.

Break rule format examples. Let's say we created two break rules:

1) The first rule defines the work duration as 6 hours and the break as 30 minutes. Employees who work more than or equal to 6 hours must record at least a 30-minute break. If employees work less than 6 hours, there are no mandated break duration requirements.

2) The second rule has a work duration of 9 hours and a break of 45 minutes. The second break rule only applies if the employee records more than 9 hours of work that day. If they do, then they must take an additional 45-minute break on that day. Therefore, the total amount will be 45 minutes + 30 minutes if work hours exceed 9 hours. It can be broken down into multiple breaks as long as each satisfies the minimum break duration.

• For instance, if someone starts their day at 8 AM, they must take a break by 2 PM at the latest, adhering to the requirement not to work more than 6 consecutive hours without rest.

Please note: Break duration is cumulative; therefore you can take multiple smaller breaks as long as the total break amount meets the break duration requirement. Multiple breaks can be recorded as long as each break period is equal to or greater than the the minimum break duration.

Break settings

• Allow employees to submit time entry even when break rules are not met - even if defined break rules aren’t met, employees will still be able to submit their time tracking entry if this setting is enabled. However, employees will be notified that break rules aren’t met and a warning will be shown at the time of the sheet submission so that approvers are informed.
• Restrict employees from submitting time entries if breaks rules are not met - if this setting is enabled, employees won’t be able to successfully submit their time tracking entry because they haven’t met the break rules. Employees will be notified about this.
• Automatically add breaks if they are missing or don’t meet the break rules - if this setting is enabled, the required break gets deducted from the tracked working time to automatically meet the break rules. In this case, employees will see a warning that a shorter-than-expected break time was submitted. They will be able to save these entries, as well as edit the entry and the auto-applied break.

Please note: Break rules settings are only enabled when at least one break rule is defined. 

Work Hours

• Maximum work duration* - here, set a maximum number of hours worked per day. Please note: the hours here cannot exceed 24.
• Allow employees to submit hours worked over the limit - if this option is selected, employees will be able to successfully submit their overtime hours.
• Restrict employees to submit hours worked over the limit - if this option is chosen, employees can only submit a number of hours that's lower or equal to the maximum.

Overtime

The toggle for overtime in the Time Tracking creation policy is off by default. However, should you like to define overtime rules for your organization, simply click on the toggle for it to turn purple.

• Overtime cliff* - This is the number of overtime hours covered by the salary. They won't count towards the overtime balance. The overtime cliff is defined on the basis of the cycle frequency that is set up in section 1 (‘Basics’); therefore, if it’s a monthly cycle, the overtime cliff is set on a monthly basis.

How is the overtime cliff calculated?

•  
  • For example, the standard hours are 40 hours/week:
  • Overtime cliff = 5 hours
  • If you work 44 hours, you get no overtime.
  • If you work 46 hours, you get overtime for 1 hour: 46 (hours worked) - 40 (standard hours) - 5 (overtime cliff) = 1.

Overtime threshold 

An overtime threshold is the number of hours an employee needs to work before the time worked is counted as overtime. You can choose between options ‘Based on the employees work schedule’ or ‘Based on fixed threshold’.

How is the overtime threshold calculated?

• For example, the standard hours are 40 hours/week (this is the threshold):
• If you work 44 hours, you get overtime for of 4 hours (44 - 40)
• If you work 50 hours, you get overtime of 10 hours (50 - 40).

Based on the employees work schedule - in Leapsome, you can have a work schedule attached to a user’s profile. The work schedule defines the days and the times that an employee usually works. Overtime starts accumulating if the employee worked over their set work schedule.

Based on fixed threshold - in this option, admins define the number of hours/minutes per day that the employee needs to work for the work time to be called overtime. For example, if its set as 8 hours, then anything above 8 hours is overtime.

Overtime limits

This is the total extra hours you've worked that haven't been paid out or taken as time off yet. It can accumulate (until perpetuity) and get carried over to the next cycle. Overtime occurs when the time worked is beyond the standard scheduled working hours as defined by the policy. Overtime limits are set to ensure compliance with labor regulations, prevent employee burnout, and manage extra wage costs efficiently. 

How is the overtime balance calculated based on the limit? For example:

• The previous overtime balance = 10 hours
• This week’s overtime = 8 hours
• New overtime balance = 10 + 8 = 18 hours

Maximum overtime balance* - Overtime above the maximum overtime balance may not be recognized as overtime and might not be compensated; however, can still be submitted with a warning. 

You can also enable undertime. It can occur when an employee works fewer hours than their scheduled or required hours. Undertime can happen for various reasons, such as leaving early, coming in late, or taking longer breaks than allotted. Undertime is calculated by determining the difference between the scheduled working hours and the actual hours worked when the actual hours are less than the standard hours. Here’s a simple way to understand and calculate it:

How is undertime calculated?

Under time = Hours for the day set up in the work schedule − Hours Worked

Absences

In this section, Admins can define which absences get included and what are the implications. When creating a Time Tracking policy, you can include the following absences in compensable hours:

• Paid time off - based on the Activity type (Working or Non-working (paid)) of the respective Absence policy
• Public holidays - according to the assigned holiday calendar

Please note: The 'Absences' tab is only applicable if your organization has purchased the 'Absence' module.