Oracle HCM Cloud (Australia) : Absence Management Setup and Usage

Oracle HCM Cloud (Australia)
Absence Management Setup and Usage
October, 2020 | Version [1.03]

Copyright © 2020, Oracle and/or its affiliates
Public
PURPOSE STATEMENT
This document provides guidance on the localization specific setup and usage of Absence Management for the
Australian localization. More general information on Absence Management implementations can be found at the link
below and should be used in conjunction with this document.
Implementing Absence Management
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2 Oracle Human Capital Management Cloud (Australia): Absence Management Setup and Usage | Version [1.03]
Copyright © 2020, Oracle and/or its affiliates | Public
TABLE OF CONTENTS
Purpose Statement 2
Disclaimer 2
Overview 4
Create Absence Plans and Absence Types 5
Implementing Leave 6
Annual Leave 8
Sick Leave 9
Long Service Leave 10
Unpaid Leaves Affect Accrual 12

Other Leave Plans 14
OVERVIEW
Absence management allows you to manage worker absences and corresponding entitlements. You can create absence
types based on predefined absence patterns, and associate them with absence plans. You can associate an absence
element with an absence plan to transfer the following information for third party payroll processing:
 Payments for annual and long service leave
 Payments for absent time during parental leave, long term sickness and many other types of leave
 Absence liability amounts
The following is the sequence for setting up absence management:
 Add new values to lookups, value sets, and flexfields based on your requirement. Write fast formulas to include
rules in the absence objects in addition to the predefined ones. Create rate definitions to define payment rates
for absence plans.
 Create absence plans to define rules for time accruals and entitlements. Create certification requests that you
want workers to complete to continue receiving entitlements during absence periods. Create absence reasons
that you want workers to select while recording absences.
 Create absence types, such as sickness leave or vacation, and associate each type with the relevant plans,
reasons, and certifications.
 Create absence categories, such as personal leave or medical leave, and associate them with the relevant
absence types for reporting purposes.
Absence Plans and Absence Types are the only mandatory steps for Australia but you may want to use other steps to
allow for more configuration options.
Currently there is no Australian localized payroll product available in HCM Cloud so the payroll interface may be used to
transfer the information to a third-party payroll application for processing monetary payments.
CREATE ABSENCE PLANS AND ABSENCE TYPES
Absence plans determine the following:

 How entitlements are calculated
 The timeframes used in the calculations
 The actual parameters of the entitlements
 The relationship to payroll
Absence plans are of these types:

 Accrual - Accrual is the entitlement time that is earned by the employee on a periodic basis. An accrual may
not mean that the specific time may be available for the employee to use. Accrual implies that the entitlement
time is given under predefined conditions at continuous points of time during the life of the plan. For example,
you use the accrual plan for annual leave, long service leave, and sick leave.
 Qualification - A Qualification Plan is a form of Absence Plan in which the employee’s entitlement to time off is
not earned on a periodic basis but is granted to them. Non-accrued plans are typically used for entitlements
other than vacation. For example, you can use the Qualification plan for jury duty, study leave, parental leave,
or army reserves.
 No Entitlement – A plan which has neither Accruals nor Entitlements defined. Usually used to track leaves
without pay.
 Agreement - Create absence plans of this type in accordance with statutory rules for use under an agreement.
For example, create a shared parental leave agreement for a worker and qualified parental partner to allocate
paid or unpaid time off among parenting partners. Commonly not used in Australia.
 Donation - Create absence plans of this type, if applicable, to track donated time that a worker receives.
Workers can donate their accrual plan balance to a co-worker who needs additional time off and is eligible to
receive the donated time.
 Compensatory - Create absence plans of this type to track earned compensatory time that can be used for
time off. Compensatory time is offered as compensation for working outside of regular work schedules. Instead
of paying overtime, an employer can create a policy to give paid time off; for example, time off in lieu.
After you define an absence plan, you can associate it to one or more absence types. These are some of the absence
types that you can create:
 Annual leave
 Sick leave
 Parental leave
 Long Service leave
 Bereavement leave
 Unpaid leave
You may need one or many plans per type if eligibility differs. For example, unpaid sick leave may be eligible to all but
unpaid study leave may not be.
When you create an absence type, such as sick leave, you include rules to determine when users record or manage an
absence of that type. For example, you can restrict workers so that they can record absences only of a particular
duration. An alert appears if the entered duration exceeds the maximum value.
You can also decide which fields or sections you want to show or hide for specific user roles when they record or
approve a specific absence type.
IMPLEMENTING LEAVE
The following information helps you in making decisions on how to implement different types of leaves for your
company. It does not provide information about all the options but those commonly used in Australia. Information on
other options and how to use them is available in the link provided in the Purpose Statement. You must review your
rules/awards and make your decisions on how things work best for your organization.
You may need a number of absence plans and types to meet all of your organization’s requirements.
This table provides a guide for the decisions that you may need to consider when implementing leaves.
Decisions to Consider Example Answers
Who is eligible for this plan? All workers
What unit of measure should this plan Days

use to process absences?
What is the start date and length of Start on January 1 and restart the same day in the following year.
the accrual plan term?
When can workers start accruing 1 month after hire date

leave time on the plan?
When can workers start using the 2 months after hire date
leave time that they accrued
How much leave time can workers Workers who belong to grade A and B accrue at the rate of 15 days each accrual
accrue in a term? term. They can carry-over 5 days to the next term.
Workers who are grade C and D accrue at the rate of 12 days each accrual term.
They can carry-over 2 days to the next term.
Do you want workers to accrue time Accrue time each pay period.
for the whole term at once or accrue
in increments?
What is the maximum leave time that 40 days

workers can accrue?
Can workers use more time than their Yes, up to 5 days

standard accruals during the plan
term?
How do you want to calculate cash 50 percent of the salary amount determines the payment for a unit of absence.
disbursals of partial accrual balances
at any time?
How do you want to calculate final The salary amount determines the payment of a unit of absence.
balance payments for a terminated
worker?
Annual Leave
Annual leave in Australia is a basic 4 weeks per year. However, annual leave is complex because there are many
variables that may affect these basic 4 weeks per year. These are some guidelines and suggestions on how you can
configure items to implement annual leave.
 Plan Type – Accrual.

 Accrual unit - Most commonly hours.
 Plan Term Type - This determines the period of the accrual year. Anniversary year would be used because
generally Australian annual leave accruals are every year on a certain date.
 Anniversary Event Rule – Determines what the date of the anniversary year is. Use Hire date for a standard
new employee. However, you can use Rehire or Adjusted Service Date for returning employees or those
with valid previous service. You can use a formula if you have complicated rules around anniversary years.
 Accrual Definition – The accrual definition would be Matrix for simple accruals. An accrual formula may be
required if you cannot meet your requirements using the accrual matrix and the accrual formula in the
Matrix. If you are using an Accrual Formula, the matrix information is not available.
 Accrual Method – Incremental as annual leave is accrued throughout the year not just once a year.
 Vesting Rule – None (not normally used for annual leave).
 Balance Frequency Source - determines how often the employee receives their accrual. Select Person
Primary frequency to accrue leave for employees for their normal pay frequency. You can also select
Repeating Period. This allows you to determine the frequency of accrual. It could be monthly or weekly or
whatever else you define. Please note however that daily accrual is not supported in HCM Cloud.
 Matrix - You need to define the matrix rules as per your organization’s requirements using the frequency
you selected above. For example, a very basic weekly accrual for 160 hours a year would look similar to this:
SEQUENCE EXPRESSION EXPRESSION ACCRUAL ACCRUAL EFF START DATE EFF END
BULIDER RATE FORMULA DATE
10 3.076923 01-Jan-2000
Using the Expression Builder, you can add more complexity. For example, adding bands for length of service or
adding different accrual rates per grade.
SEQUENCE EXPRESSION EXPRESSION ACCRUAL ACCRUAL EFF START EFF END

BULIDER RATE FORMULA DATE DATE
10 [LengthOfService.LessThan5] 3.076923 01-Jan-2000
20 [LengthOfService.GreaterThan5] 3.84615 01-Jan-2000
 Leave without pay - An accrual plan does not automatically reduce its accrual when unpaid leave is taken.
A Matrix Accrual Formula is required. See section Unpaid Leaves Effect on Accruals.
 Enable Transfers – Select if you want annual leave balances to be available for transfer to another plan.
 Enable Adjustments – Select if you want HR to be able to adjust leave balances.
Currently there is no supported Australian HCM Cloud payroll product. As such, you will need to review your
interface with your payroll product to determine how payment of annual leave should be processed.
Sick Leave
Sick leave in Australia can vary but generally it is 10 days per year. However, there are many variables that may
affect these 10 days per year. These are some guidelines and suggestions on how you can configure items that may
assist you in implementing sick leave.
 Plan Type – Accrual

 Accrual unit – usually it’s in “hours” but can also be “days”
 Plan Term Type - This determines the period of the accrual year. Anniversary year would be used as
generally Australian sick leave accruals are every year on a certain date.
 Anniversary Event Rule – Determines what the date of the anniversary year is. Use Hire date for a standard
new employee. However, you can use Rehire or Adjusted Service Date for returning employees or those
with valid previous service. You can use a formula if you have complicated rules around anniversary years.
 Accrual Definition – The accrual definition would be Matrix for simple accruals. You can use an Accrual
Formula if you cannot meet your requirements using the Accrual Matrix and the Accrual Formula in the
Matrix. If you are using an Accrual Formula, the matrix information is not available.
 Accrual Method – Sick leave can be Incremental or Front-Loaded depending on your company rules.
Incremental would be used if employees accrue leave each period throughout the year. If you provide your
employees 10 days as soon they are eligible, then use Front-Loaded.
 Vesting Rule – You can use a vesting rule if employees need to complete a probation period before they
become entitled to sick leave. For this option you can use Elapsed Period or Formula.
 Balance Frequency Source - Determines how often the employee receives their accrual. Select Person
Primary frequency to accrue leave for employees for their normal pay frequency. You can also select
Repeating Period. This allows you to determine the frequency of accrual. It could be monthly, weekly, or
any frequency you define. However, note that daily accrual is not supported in HCM Cloud.
 Matrix - You need to define the matrix rules as per your organization’s requirements using the frequency
you selected above. For example, a very basic weekly accrual for 76 hours a year (76/52 = 1.4615) would
look similar to this:
SEQUENCE EXPRESSION EXPRESSION ACCRUAL ACCRUAL EFF START DATE EFF END
BULIDER RATE FORMULA DATE
10 1.4615 01-Jan-2000
Using Expression Builder, you can add more complexity. Doing simple things like bands for length of service or
different accrual rates per grade for example.

10 [LengthOfService.LessThan5] 1.46153 01-Jan-2000
20 [LengthOfService.GreaterThan5] 2.1923 01-Jan-2000
 Leave without pay - An accrual plan does not automatically reduce its accrual when unpaid leave is taken.
A Matrix Accrual Formula is required. See section Unpaid Leaves Effect on Accruals.
 Enable Transfers – Select if you want sick leave balances to be available for transfer to another plan
Currently there is no supported Australian HCM Cloud payroll product. As such, you will need to review your
interface with your payroll product to determine how payment of sick leave is processed.
Long Service Leave
Long service leave in Australia is complex and requires additional steps to implement. These are the basic guidelines
and suggestions on configuration that you can follow, or you can use a formula for accrual calculation.
Long service leave is divided into three distinct time periods, which ensures correct taxation on termination. In HCM
Cloud, we recommend that you create three accrual plans as follows:
 Long Service Leave Pre 78
 Long Service Leave Pre 83
 Long Service Leave Post 83

You must assign only those plans that are needed for the employee. For example, an employee who commenced after
1983 would only require one plan and those commencing or had service after 1978 would require two plans, and so on.
These three plans would be associated to one absence type, making booking of long service leave more streamlined.
The three accrual plans would be prioritized on a first-in first-out basis. This is achieved by the priority order of the plans
when they are assigned to the absence type. Plans are prioritized as follows:
1 - Long Service Leave Post 83
2 - Long Service Leave Pre 83
3 - Long Service Leave Pre 78
When looking at the employee’s accrual balance, a balance per plan will be displayed.
 Plan Type – Accrual
 Accrual unit – Can be in “weeks”, “days”, or “hours” depending on your requirements.
 Plan Term Type - Determines the period of the accrual year. Anniversary year would be used as generally
Australian long service leave accruals are every year on a certain date.
 Anniversary Event Rule – Determines what the date of the anniversary year is. Use Hire date for a standard new
employee. However, you can use Rehire or Adjusted Service Date for returning employees or those with valid
previous service. You can use a formula if you have complicated rules around anniversary years.
 Accrual Definition – The accrual definition would be Matrix for simple accruals. You can use an Accrual Formula
if you cannot meet your requirements using the Accrual Matrix and the Accrual Formula in the Matrix. If you
are using an Accrual Formula the matrix information is not available.
 Accrual Method – Incremental as long service leave is accrued throughout the year not just once a year.
 Vesting Rule – Formula. Create a Vesting Period Formula to cover the differing periods per state or group of
people with the differing conditions. For example, New South Wales (NSW) employees may take long service
leave (LSL) after 10 years whereas Australian Capital Territory (ACT) employees may take after 7 years.
 Balance Frequency Source – Oracle recommends that you select Repeating Period with a frequency of month.
This reduces any rounding errors when working with long decimals. However, you can use other options if
required. Note that daily accrual is not supported in HCM Cloud.
 Matrix - You need to define the matrix rules as per your organization’s requirements using the frequency you
selected above. Using Expression Builder, you can add more complexity. For long service leave you can set up
bands for each state’s differing requirements.

10 [[Person.Location] = "NSW" AND .495623 01-Jan-2000

[LengthOfService.LessThan10]
15 [[Person.Location] = "NSW" AND .568912 01-Jan-2000

[LengthOfService.GreaterThan10
20 [[Person.Location] = "QLD" AND 0.505575 01-Jan-2000

[LengthOfService.LessThan10]
 Leave without pay - An accrual plan does not automatically reduce its accrual when unpaid leave is taken. A
Matrix Accrual Formula is required. See section Unpaid Leaves Effect on Accruals.
 Enable Transfers – Select if you want long service leave balances to be available for transfer to another plan
 Currently there is no supported Australian HCM Cloud payroll product. As such, you will need to review your
interface with your payroll product to determine how payment of long service leave is processed.
UNPAID LEAVES AFFECT ACCRUAL
An accrual plan does not automatically reduce its accrual balance when unpaid leave is taken. You need to use a formula
to define what to include and not include for adjustments and how each will affect the accrual of leave.
Leave Types
Create a Leave Type for Unpaid Leave and then reference it in an accrual formula.
To differentiate between unpaid leave types, create Leave Reasons. These can be added at the time of booking the
unpaid leave to classify what type of unpaid leave it is. This allows you to only reference one leave type in the accrual
formula rather than having to include many types.
If you have unpaid leaves that do not affect accruals, you need to create another type separately.
Unpaid Leave Formula

The formula to reduce accrual for unpaid leaves (for example, an employee taking 5 days of unpaid leave would not
accrue for those 5 days) can be part of the Accrual formula or a part of the Matrix definition Accrual formula. You will
need to determine the approach that works best for you.
Here’s a sample formula that you can use in annual, sick, or long service leaves to reduce the accrual for unpaid leave.
This formula only reduces accrual for unpaid leave that falls within the accrual period. So only absences which START in
the Accrual Period will be processed. Also, absences with an End Date after the Accrual Period End Date will have the
entire Absence Duration counted in that accrual period. Note that the following is just a part of the formula for the
reduction of unpaid leave.
/******************************************************************************
FORMULA NAME: Sample_Unpaid_Leave
FORMULA TYPE: Global Absence Accrual Matrix
DESCRIPTION: Implementing Accrual Stops
Change History:
Name Date Comments
-----------------------------------------------
Oracle 12-Aug-2015 Initial Version
*******************************************************************************/
DEFAULT FOR IV_ACCRUALPERIODSTARTDATE IS '4712/12/31 00:00:00' (date)
DEFAULT FOR IV_ACCRUALPERIODENDDATE IS '4712/12/31 00:00:00' (date)
DEFAULT_DATA_VALUE FOR ANC_PER_ABS_ENTRS_ABSENCE_ENTRY_ID_ARR IS 0
DEFAULT FOR ANC_ABS_ENTRS_ABSENCE_TYPE_ID is 0
DEFAULT FOR ANC_ABS_ENTRS_ABSENCE_STATUS_CD IS ' '
DEFAULT FOR ANC_ABS_ENTRS_DURATION IS 0
DEFAULT FOR ANC_ABS_TYP_NAME IS ' '
DEFAULT FOR ANC_ABS_PLN_PLAN_UOM IS 'H'
DEFAULT FOR PER_ASG_STANDARD_WORKING_HOURS IS 0
INPUTS ARE IV_ACCRUALPERIODSTARTDATE (date), IV_ACCRUALPERIODENDDATE (date), IV_ACCRUAL (number)
ln_unpaid_amount = 0
i=1
CHANGE_CONTEXTS(START_DATE=IV_ACCRUALPERIODSTARTDATE, END_DATE=IV_ACCRUALPERIODENDDATE)
(
WHILE ANC_PER_ABS_ENTRS_ABSENCE_ENTRY_ID_ARR.exists(i) /* Fetches all absence entries that start
between the contexts START_DATE and END_DATE */
LOOP
(
CHANGE_CONTEXTS (ABSENCE_ENTRY_ID = ANC_PER_ABS_ENTRS_ABSENCE_ENTRY_ID_ARR[i])
(
CHANGE_CONTEXTS (ABSENCE_TYPE_ID = ANC_ABS_ENTRS_ABSENCE_TYPE_ID)
(
IF (ANC_ABS_TYP_NAME = 'Unpaid Leave' AND ANC_ABS_ENTRS_ABSENCE_STATUS_CD = 'SUBMITTED')
THEN (ln_unpaid_amount = ln_unpaid_amount + ANC_ABS_ENTRS_DURATION)
)
)
i=i+1
)
)
/* Check Unit of Measure for Plan */
/* Days and Hours supported. */
if (ANC_ABS_PLN_PLAN_UOM = 'D') THEN

(ln_period_duration = DAYS_BETWEEN(IV_ACCRUALPERIODENDDATE, IV_ACCRUALPERIODSTARTDATE) + 1 )
else if (ANC_ABS_PLN_PLAN_UOM = 'H') THEN
/* Default number of working days to 5 for example formula. */
(ln_period_duration = (DAYS_BETWEEN(IV_ACCRUALPERIODENDDATE, IV_ACCRUALPERIODSTARTDATE) + 1)
* (PER_ASG_STANDARD_WORKING_HOURS / 5) )
accrual = IV_ACCRUAL * ((ln_period_duration - ln_unpaid_amount)/ln_period_duration)

accrual = ROUND(accrual, 2)
if (accrual < 0) then (

accrual = 0
)
RETURN accrual
OTHER LEAVE PLANS
There are other leave plans that you will need to create for your organization to categorize leaves, such as Jury Duty,
Parental Leave, and Study Leave. The implementation of these leaves is similar to the information outlined in our online
help and do not have any Australia-specific recommendations.
Implementing Absence Management
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Oracle Human Capital Management Cloud (Australia): Absence Management Setup and Usage
October 2020
Author: Joy Hooper

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Oracle HCM Cloud (Australia)

Absence Management Setup and Usage

October, 2020 | Version [1.03]

Unpaid Leaves Affect Accrual 12

The following is the sequence for setting up absence management:

Absence plans determine the following:

Absence plans are of these types:

Decisions to Consider Example Answers

Who is eligible for this plan? All workers

What unit of measure should this plan Days

When can workers start accruing 1 month after hire date

What is the maximum leave time that 40 days

Can workers use more time than their Yes, up to 5 days

 Plan Type – Accrual.

SEQUENCE EXPRESSION EXPRESSION ACCRUAL ACCRUAL EFF START EFF END

10 [LengthOfService.LessThan5] 3.076923 01-Jan-2000

20 [LengthOfService.GreaterThan5] 3.84615 01-Jan-2000

 Plan Type – Accrual

SEQUENCE EXPRESSION EXPRESSION ACCRUAL ACCRUAL EFF START EFF END

10 [LengthOfService.LessThan5] 1.46153 01-Jan-2000

20 [LengthOfService.GreaterThan5] 2.1923 01-Jan-2000

 Long Service Leave Pre 78

 Long Service Leave Pre 83

 Long Service Leave Post 83

 Plan Type – Accrual

 Accrual unit – Can be in “weeks”, “days”, or “hours” depending on your requirements.

SEQUENCE EXPRESSION EXPRESSION ACCRUAL ACCRUAL EFF START EFF END

10 [[Person.Location] = "NSW" AND .495623 01-Jan-2000

15 [[Person.Location] = "NSW" AND .568912 01-Jan-2000

20 [[Person.Location] = "QLD" AND 0.505575 01-Jan-2000

 Enable Adjustments – Select if you want HR to be able to adjust leave balances.

Unpaid Leave Formula

if (ANC_ABS_PLN_PLAN_UOM = 'D') THEN

accrual = IV_ACCRUAL * ((ln_period_duration - ln_unpaid_amount)/ln_period_duration)

if (accrual < 0) then (

Implementing Absence Management

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