You are on page 1of 8

HRMS PTO Accrual Plan Setup

Revised 05/30/17

Application: Human Resources

Setup Item: PTO Accrual Plans

R2i Checklist Step: HR-70, HR-71, HR-72, HR-73

Oracle Guide Step: HR-99-105

Accrual Plan Administration

Accrual plans permit eligible employees to accrue PTO (paid time off) each year to use for vacation,
personal time, or sick leave. Oracle Human Resources has no restrictions on the number of plans you
can set up, each with its own units of accrued time (hours or days) and its own rules.

Just as elements constitute the underlying structure of absence types, they also provide the structure for
accrual plans. To set up an accrual plan, you first set up absence recording for the plan, including an
element to hold information about absences taken under the plan. There is also an element for the plan
itself, which you use to enroll participants in the plan. With absence recording in place, you can enter
information for setup of the accrual plans. For more information regarding set up absence management,
see the HRMS Absence Management Setup document.

Prerequisites: Define and link element for the plans absence type. Also, define an absence type for the
plan and associate it with its absence element if you expect to use the Absence Detail window for
recording accrued time taken.

Define New Accrual Start Rules

The seeded PTO_PAYROLL_CALCULATION formula allows accrual of PTO to begin on a fixed date
each year (01 January). For each plan that uses this formula, you can select a value in the Accrual Start
field of the Accrual Plan window. This specifies when newly hired employees start to accrue PTO.

There are three seeded start rules:

Hire Date
Beginning of Calendar Year
Six Months After Hire Date

If you need other start rules, define them as values for the Lookup Type
US_ACCRUAL_START_TYPE. You must add a line to the seeded formula to calculate the accrual
start date using the new start rule.

Page 1 of 8
/var/www/apps/conversion/tmp/scratch_4/356502676.doc
Copyright 2000 KPMG Consulting, LLC
All Rights Reserved
HRMS PTO Accrual Plan Setup
Revised 05/30/17

The other seeded formulas (PTO_SIMPLE_MULTIPLIER and PTO_ROLLING_ACCRUAL do not


use values in the Accrual Start field. For plans using these formulas, new hires begin accruing on their
continuous service date, if this date has been entered. If there is no continuous service date, they begin
accruing on their hire date or plan enrollment date, whichever is later.

If you are writing your own accrual formulas, you can choose whether to use the Accrual Start field on
the Accrual Plan form to specific start rules for new hires. This is only useful if you are using the same
formula for several accrual plans with different start rules. Otherwise, you can specific the start rule
within the formula.

Decide on Accrual and Carry Over Formulas

Decide which Accrual and Carry Over formulas you want to use. You can use the seeded formulas,
customize them, or write your own. (See Formulas for Accrual Plans, Managing Compensation and
Benefits Using Oracle HRMS for detailed information regarding this procedure.)

Write Ineligibility Formula

If your Accrual formula defines a period of ineligibility and you want to use Batch Element Entry (BEE)
to enter absences against the accrual plan, define an Ineligibility formula. BEE calls this formula to
check whether an employee is eligible to use accrued PTO. They accrue time at the usual rate during
this time, but it is not registered on the system until the Period of Ineligibility expires. If pla participants
take vacation or sick leave during this period, the system displays a negative value for accrued time.
Many enterprises set up an absence type for approved but unpaid leave to use for absences taken
during periods of ineligibility.

You can enter the period of ineligibility on the Accrual Plan form. The seeded Accrual formulas
illustrate how a formula should use the entered values. They calculate the period of ineligibility from the
continuous service date if it was entered) or the employees hire date. Alternatively, you can define the
period of ineligibility within your Accrual formula.

If you want to use Batch Element Entry (BEE) to make absence entries against the accrual plan, the
BEE validation process must be able to check when the ineligibility period expires. If you record the
ineligibility period for the plan on the Accrual Plan form, BEE retrieves the ineligibility period directly
from the table. It then interprets it as a period of time from the employees continuous service date or
hire date. If the period of ineligibility is defined within your Accrual formula, you must associate an
ineligibility formula with the plan. BEE calls the formula, which returns Y or N to indicate whether the
employee is eligible to use accrued PTO on the date supplied by BEE. This formula should calculate the
end of the ineligibility period in the same way as the Accrual formula for the plan.

If the employee is not eligible, the BEE validation process creates a warning on the batch line for the
absence entry. If you use a custom method of entering timecard data, calling the Element Entry API,
you can add logic to call the Ineligibility formula.

Define New Accrual Categories

Page 2 of 8
/var/www/apps/conversion/tmp/scratch_4/356502676.doc
Copyright 2000 KPMG Consulting, LLC
All Rights Reserved
HRMS PTO Accrual Plan Setup
Revised 05/30/17

Several seeded accrual categories are available in Oracle HRMS. If additional categories are required,
define them as values for the Lookup Type US_PTO_ACCRUAL

Accrual Plan Setup Steps

To define an accrual plan:

Navigator: US HR Manager
Navigate To: Total Compensation>Basic>Accrual Plans

1. Enter the plan name (Vacation) and select an accrual category for it (Vacation).

Suggestion: Coordinate the names of the accrual plan, the plans absence type if any, and the
element used to record absences taken under the plan. For example, for the Vacation PTO Plan
for your hourly workers, you could name the absence type and its element Hourly Vacation PTO
Absence.

2. You can enter a description, summarizing the purpose and rules of the plan.

3. Select the Accrual formula and Carry Over formula to associate with the plan.

Page 3 of 8
/var/www/apps/conversion/tmp/scratch_4/356502676.doc
Copyright 2000 KPMG Consulting, LLC
All Rights Reserved
HRMS PTO Accrual Plan Setup
Revised 05/30/17

4. Optionally, select a start rule for the plan in the Accrual Start field. This rule determines the date
on which newly hired employees begin to accrue PTO. (Note: Some plans do not use this
value; it depends which Accrual formula you have selected. One out of three
(PTO_PAYROLL_CALCULATION) formula uses this value.

5. Select Days or Hours in the Accrual Units field. This selection must accord with the input value
units selected for the element that records accrued time taken under this plan.

6. In the Name field of the Absence Information region, select the element associated with the
plans absence type (Paid Vacation). The name of the elements input value that holds the entries
or hours or days absent appears in the Units field (Hours).

7. If the start rule for this plan is Hire Date or Beginning of Year, you can enter a period of
ineligibility, during which a plan participant can accrue PTO but cannot use accrued PTO. For
example, enter 3 in the Length field and select Calendar Month in the next field.

8. Optionally select an Ineligibility formula. This formula is called by the BEE validation process
for a batch line that enters an absence against the accrual plan. It checks whether the employee
is eligible to use accrued time on that date. (Note: If you enter the period of ineligibility in the
Length field, you do not need to select a formula. The BEE validation process gets this value
and interpret it as a period of time from the employees continuous service date.

9. Save your work. When you do this, the system generate three new elements for the plan, one to
represent the plan and one each to hold carried over and residual amounts of accrued, unused
PTO. The system create links for these elements to match the links you defined for the plans
absence element.

10. Choose the Accrual Bands button to set up length of service bands for the plan. This is optional,
but you need to set up at least one band if the plan uses the seeded
PTO_PAYROLL_CALCULATION formula.

11. Choose the Net Calculation Rules button to view or change the rules for calculating employees
net PTO.

Use the Accrual Bands window to define length of service bands for an accrual plan.

Navigator: US HR Manager
Navigate To: Total Compensation>Basic>Accrual Plans>Accrual Bands

Page 4 of 8
/var/www/apps/conversion/tmp/scratch_4/356502676.doc
Copyright 2000 KPMG Consulting, LLC
All Rights Reserved
HRMS PTO Accrual Plan Setup
Revised 05/30/17

Query an accrual plan name (Vacation) in the Plan Name field, then click on the Accrual Bands button.

1. For each length of service band applicable to this plan, establish the bands duration by making
an entry in the To field. The first band starts from zero years of service. If it extends for five
years, enter 5 in the To field. The system then sets the From field for the second band at 5,
because the second band starts after five years of service.

Page 5 of 8
/var/www/apps/conversion/tmp/scratch_4/356502676.doc
Copyright 2000 KPMG Consulting, LLC
All Rights Reserved
HRMS PTO Accrual Plan Setup
Revised 05/30/17

For the last band you enter, in order to cover all participants with any length of service beyond
the bands From entry, enter 99 in the To field. For example, if your bands cover service of 05
years, 510 years, and 10+ years, the third bands From and To entries should be 10 and 99.

2. For each band, enter in the Yearly Accrual field the number of hours or days that participants
whose length of service falls into this band can accrue each year. For example, if plan
participants accrue 80 hours of vacation per year during their first five years of service (band 0
5), enter 80 in the Yearly Accrual field.

3. If a band does not permit participants to carry unused accrued time over to the next year, leave
the Maximum Carryover field blank. Otherwise, enter in this field the maximum number of
accrued, unused hours or days that participants at this band may carry forward.

4. If a band has no ceiling that limits the total number of hours or days participants at this band can
accrue at any one time, leave the Ceiling field blank. Otherwise, enter the ceiling number for the
band.

5. SAVE your work.

Net Accrual Calculation Rules

Navigate To: Total Compensation>Basic>Accrual Plans>Net Calculation Rules

The rules for automatic calculation of employees net PTO appear in the Net Calculation Rules window.
You enter this window by choosing the Net Calculation Rules button in the Accrual Plan window.

Page 6 of 8
/var/www/apps/conversion/tmp/scratch_4/356502676.doc
Copyright 2000 KPMG Consulting, LLC
All Rights Reserved
HRMS PTO Accrual Plan Setup
Revised 05/30/17

The default net accrual calculation takes account of absences (entered on the Absence element) and time
carried over from the previous accrual term (entered by the Carry Over Process on the plans Carried
Over element). If your plans calculation needs to take account of other values (i.e., time bought or
sold), you ca change the calculation in this window.

To change the net accrual calculation:

1. Create any additional elements you need for the plan. For example, you might need an element
to store the amount of PTO an employee has bought or sold. Use the Information classification
for these elements, define them as nonrecurring, and give them at least two input values:

An input value with the same units (days or hours) as you selected for the accrual plan,
and
An input value with the units Date (to hold the effective date).

(Suggestion: Use names for these elements that clearly link them to the appropriate accrual
plan. For example, if the accrual plan is called Standard Vacation, you could name the element
Standard Vacation Bought or Sold.)

2. Query the new elements in the Net Calculation Rules window.

3. Select the input value that hold the day or hours you want to use in the net accrual calculation.

4. Select the date input value that holds the effective date for the accrual calculation.

5. For each input value, select Add or Subtract to determine whether the value should increase or
decrease the net accrual available to an employee.

6. Save your work.

You are now ready to enroll employees in the plan and record absences for plan participants when they
use time they have accrued.

Enrolling Employees in PTO Accrual Plans

Enroll individual participants in an accrual plan by entering for them the element generated to represent
the plan.

To enroll participants in a PTO accrual plan, do one of the following:

For enrollment of an individual employee, perhaps as a part of the hiring process, enter the
element representing the plan for him or her using the Element Entries window.
For enrollment of a batch of employees in a plan, perhaps a newly developed plan, use the
batch entry facility.
Page 7 of 8
/var/www/apps/conversion/tmp/scratch_4/356502676.doc
Copyright 2000 KPMG Consulting, LLC
All Rights Reserved
HRMS PTO Accrual Plan Setup
Revised 05/30/17

Overriding Length of Service

The default date for calculating length of service is the first day of the month of an employees hire date.
You can override this by entering another date when you enroll the participant in the plan. This is
relevant to plans that have accrual bands based on length of service. If you enter a date here, it is also
used, instead of the employees hire date, when the seeded formulas calculate the appropriate accrual
start date for the employee, i.e., if the plans start date rule is Six Months After Hire Date, accrual will
begins six months after the continuous service date you enter.

To override the default date for calculating length of service:

When enrolling the participant, enter the override date in the Continuous Service Date entry value of the
element representing the plan.

Page 8 of 8
/var/www/apps/conversion/tmp/scratch_4/356502676.doc
Copyright 2000 KPMG Consulting, LLC
All Rights Reserved