One tip to get those leave balances down over summer
O*NO! COVID hasn’t allowed everyone to travel and take the holidays they would usually take, and this means your employees (and probably you) have not taken much annual leave this year.
Whilst mental health issues and exhaustion are obvious side effects of 2020, one big thing agency owners need to keep an eye on is leave balances. Leave balances are edging upward across the country, putting pressure on your balance sheet.
Encouraging good mental health in the workplace
2020 has kicked us in the guts. Working non-stop in ‘normal’ times can be trying enough, but working without a decent break this year is burning us all out. Not only do we need to look out for each other, but agency owners have a duty of care to make sure they provide a safe workplace.
One way we can do that this Christmas is to make sure our staff have a decent break. Not only our employees, but agency owners need a break too!
If you haven’t already, start the conversation now around what everyone is looking forward to over the summer and start to plan when every one of your team, including yourself, will take time off to either spend time with their families or do the things that they enjoy.
Rules around taking annual leave
So, we know the basic rules – your staff are generally entitled to 4 weeks annual leave per year (pro-rated for part-time employees) unless you have been more generous in your employment contracts.
Annual leave is paid at the employees’ ordinary rates (plus holiday loading if applicable) and when employees leave, we must pay them out their annual leave entitlements.
But what happens when your employees have not taken any annual leave for a while and are starting to accrue large balances? Not only is it not good for their health as they have not had any time off, but it puts pressure on your balance sheet. Usually, you may only have one or two employees like this, but 2020 has been a year of firsts and you may now have MOST of your employees in this situation.
How to get leave balances down
For employees who are under the Real Estate Award, you can require them to take leave if you shut down over Christmas. That includes partial shutdowns where you go to skeleton staff.
Often, Principals will encourage staff to take leave over the shutdown period. However, this year we should be thinking about whether mandatory leave needs to be taken – not only to reduce your liability on the balance sheet but to help staff rest, recover and recalibrate after a rough year.
Also, if you have any staff that have accrued more than eight weeks of annual leave, you need to talk to that employee about how and when that leave balance will be reduced. If you can’t reach an agreement then you can direct your employee to take leave, provided you follow the procedure set out in the Award.
If you are unable to fully shut down over the break, try to stagger leave over the summer period so everyone can get some R&R.
Takeaway
Help both your balance sheet and your employees this summer by:
ensuring everyone gets a break to recalibrate after 2020
knowing the rules around annual leave
reducing your leave balances
Your next steps
Not sure about your legal requirements when it comes to your employees and leave entitlements? Book a FREE 10 min chat with us today to discuss your options.
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Boring legal stuff: This article is general information only and cannot be regarded as legal, financial, or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS - congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.