An overtime and compensation policy defines how the extra or deficit hours generated by employees are calculated and what to do with them: whether they are compensated with time off, pay, or both (hybrid policy).
 

How to create a policy step by step

Go to Configuration >> Time management >> Compensation and click “+ Policy”.

Step 1 - General

Give the policy a name and a description. Use clear names (for example: "Night Shift - Metal Industry Agreement"); your future self will thank you, especially when you have several policies created.

Step 2 - Calculation and management

Define how time is calculated and what happens to accumulated hours:

• Choose between the different compensation modes available: hybrid (combines time off and pay), time off (days/hours off only), or pay (paid via payroll).
• Decide whether time worked will be compared against the assigned schedule/shift or against the theoretical contract hours.
• Select when overtime can be generated: on working days, on days off, or whenever the employee works.
• Enable the time off and late arrivals adjustment if you want to exclude unjustified time off and late arrivals from the time-off balance.

Step 3 - Overtime

Determine how overtime is processed before it is consolidated.

• View and manage positive and negative overtime separately
  • If you disable it, the balance is merged into a single net figure.
    Example: if an employee works +2 h on Monday and -1 h on Tuesday, you will see a single balance of +1 h.
  • If you enable it, you will see the balances separately.
    Example: following the previous example, you will see +2 h of positive overtime and -1h of negative overtime without them being subtracted automatically.
• Enable overtime validation
  • If you enable it, a responsible manager must approve the extra time before it is added to the balance or payroll (by default, it is assigned to the clock in/out validator).
  • If you disable it, the extra time is validated automatically and goes directly to the employee's accumulated balance.

Step 4 - Periods and expiry

Set how often the system "makes cut-offs" to review and settle hours.

• Management periods set the frequency; that is, whether the balance is accumulated daily, weekly, fortnightly, monthly, etc.
  Example: if you choose weekly, the system will close the count every week. You will need to decide whether accumulated hours are carried over to the next period to keep adding up, or whether the balance resets to 0 when the cycle closes.
• Annual limits set the maximum number of hours an employee can accumulate or compensate per year in time off or pay.

Step 5 - Visibility and access

Configure what the employee can see and do:

• Enable or disable the balance display options for the workforce.
• Decide whether the employee can request to use their accumulated balance (as time off or pay) without waiting for an administrator to decide.
• Turn on the "Require manager approval" toggle if you want employee requests to go through a prior check before being applied.

Step 6 - Notifications

Define who receives alerts and through which channel (mobile or email). Review the Administrators and Employees sections to enable only the alerts that add value.

When you are done, click "Save". The policy will be created, and you can assign it to the relevant employees.