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What Earned Leave Means

Earned leave is a type of paid time off that employees accumulate based on the hours they work. Instead of receiving a fixed number of hours at the start of the year, employees earn leave gradually as they log time on their timesheets. This structure is especially useful for organizations that want leave accrual to directly reflect employee activity, tenure, or workload.

Earned leave policies are common in industries where:

  • Employee schedules vary week to week.
  • Leave benefits must be proportional to hours worked.
  • Compliance requires tracking accruals tied to actual labor hours.

In Hour Timesheet, earned leave is fully configurable so administrators can tailor accrual rates, carryover rules, and maximum balances to match company policy or contract requirements.

Key Components of an Earned Leave Policy

An earned leave policy typically includes four major elements:

1. When the Leave Rule Becomes Effective

This determines when an employee begins earning leave. Hour Timesheet supports:

  • From Hire Date — Accruals begin immediately on the employee’s hire date.
  • After a Waiting Period — Accruals begin only after a specified duration (e.g., 90 days after hire).

2. How Leave Is Earned

This defines the accrual rate based on hours logged. For example:

  • Earn 1 hour of leave for every 30 hours worked.
  • Set a maximum number of hours that can be earned per year.

This structure ensures accruals scale with actual time worked and prevents employees from exceeding annual limits.

3. Carryover Rules

Carryover determines what happens to unused leave at the end of a cycle.

Hour Timesheet allows you to configure:

  • Carryover frequency (typically yearly).
  • Carryover date (e.g., January 1).
  • Carryover limits, such as:
    • Carry up to a specific number of hours.
    • Allow unlimited carryover.

The system automatically delays carryover if the employee’s previous period timesheets are not submitted or approved, ensuring accurate balances.

4. Maximum Balance Limits

This sets the ceiling for how much leave an employee can accumulate at any time. Options include:

  • Limit balance to a specific number of hours.
  • Allow unlimited accumulation.

Maximum balance rules help organizations manage financial liability and ensure employees use their earned time.

How to Build an Earned Leave Policy in Hour Timesheet

Use the following steps as a guide when configuring earned leave using the settings shown in the screenshot.

Step 1: Set the Effective Date

Choose whether the leave rule starts on the employee’s hire date or after a defined waiting period.

Step 2: Configure Accrual Based on Hours Worked

Enter:

  • The number of hours earned.
  • The number of hours required to earn that amount.
  • The maximum hours that can be earned per year.

Example: Earn 1 hour for every 30 hours logged, up to 56 hours per year.

Step 3: Define Carryover Rules

Select the carryover frequency and date. Then choose whether to:

  • Limit carryover to a specific number of hours, or
  • Allow unlimited carryover.

Step 4: Set Maximum Balance Limits

Choose whether to cap the total leave balance or allow unlimited accumulation.

Step 5: Save and Assign the Policy

Once configured, assign the leave policy to the appropriate employees or groups.

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