Why "First Year AL Entitlement round up to integer"?

According to the Concise guide to the employment ordinance Hong Kong, Chapter 4,  if an employee has not been employed for 12 months in the common leave year, the employer should calculate his leave entitlement on a pro-rata basis, and any fraction of a day resulting from the calculation should be counted as a full day's leave.

To disable this behavior, you can uncheck the First Year AL Entitlement Round Up to Integer (for Calendar Year Release Entitlement) checkbox in the Leave Module Setup, Annual Leave tab.

When the First Year AL Entitlement Round Up to Integer (for Calendar Year Release Entitlement) is enabled, here's what happens:

• Assume an annual leave entitlement of 10 days per year (C – In Advance).

• If an employee joins the company mid-year, the entitlement is calculated proportionately based on the days worked in the first year.

For example:

• An employee joined on 2019/03/06 and their first leave year ends on 2019/12/31.

• The period from 2019/03/06 to 2019/12/31 spans 301 days.

• Eligible entitlement is calculated as follows:  

(10 days × 301) ÷ 365 = 8.25 days

With the rounding option enabled:

• The first-year entitlement is rounded up to the nearest whole number, resulting in 9 days.  

• The additional 0.75 days (difference) is added to the entitlement.

In summary, enabling this setting ensures that first-year entitlements are rounded up, granting employees a slightly higher allowance for their initial leave period.

For Actual Entitlement, 

Actual Entitlement is accumulated day by day, each day 10/365 days. 

So at the end of the leave year, it becomes 10 x 301 / 365 = 8.24657534, rounded to 2 decimal places becomes 8.25. 

As of 2020/01/01 (Start of Next Leave Year),

For Actual Entitlement, it is calculated on a daily accumulation basis, with each day contributing 10 ÷ 365 days towards the entitlement. Here's the breakdown:

1. At the end of the first leave year (2019/12/31):

• The period from 2019/03/06 to 2019/12/31 is 301 days.

• The entitlement accrued over this period is calculated as:  

     (10 × 301) ÷ 365 = 8.24657534

• Rounded to 2 decimal places, this becomes 8.25 days.

2. As of 2020/01/01 (Start of Next Leave Year):

•  The accumulated Actual Entitlement from the first year transitions to form the starting balance for the next leave year.

•  Any additional entitlements or adjustments for the new year would be based on company policies or the employee's specific leave structure.

It is important to note that the Brought Forward (BF) for “Current Year (Actual)” incorporates the First Year Round Up Difference of 0.75 days, which is distributed throughout the first leave year and included in the BF calculation.