Adding and Managing Time Off Policies

Purpose

Time off policies define how your employees earn, carry over, and use paid and unpaid time off. A policy holds the accrual schedule, waiting periods, balance caps, reset rules, and the approver. You create policies once at the company level and then assign them to employees.

Everything downstream reads its rules from the policy you build here: request validation, balance maths, what employees see on their pay stubs, how approved time off is paid through payroll, and the payout at termination. The decisions on this form are the ones worth slowing down for.

Who can do this: Users whose role includes the company-level Time Off permission. This is typically the Employer Administrator, but any custom-role admin granted that permission can create and edit policies. Assigning policies to individual employees is a separate, employee-level permission (see Assigning Time Off Policies).

When to use which options

• Policy Type. Pick Paid Sick for sick leave. It is a distinct type, not a renamed personal policy. Pick Unpaid when time should be tracked but not paid. Pick Paid Personal for everything else (vacation, general PTO).
• Accrual method. Use a calendar cadence (Weekly through Yearly) when everyone earns at a fixed rate. Use Work Anniversary for grant-on-anniversary designs. Use At the end of Waiting Period for a one-time grant once the employee becomes eligible. Use Flat Amount on Hours Worked when earning should track hours actually worked; this requires UZIO Payroll and is how safe and sick leave laws are usually modelled for hourly workforces. Use Unlimited for untracked "take what you need" PTO. Unlimited policies never accrue and never reset.
• Days vs Hours. This choice controls request granularity for the life of the policy. Employees on a Days policy request in whole days. Only an Hours policy accepts partial-day (hourly) requests. Pick Hours if partial days matter to you.

Steps: Create a policy

1. Go to Time Off > Policies. The screen has Time Off and Holiday tabs. The Add Time Off Policy and Time Off Import buttons sit directly on the page.
2. On the Time Off tab, click Add Time Off Policy.

1. Basic Details

2. Accrual Schedule

1. Choose the Accrual Method. The options: Weekly, Bi-Weekly, Semi-Monthly, Monthly, Quarterly, Yearly, Work Anniversary, At the end of Waiting Period, Flat Amount on Hours Worked, Unlimited.
2. Enter the Accrual Amount (how much time each accrual adds) and pick the unit: Days (default) or Hours.
3. Answer the schedule's questions:

1. Click Add Another Accrual Schedule to build tenure tiers. For example, 10 days per year for years 1 and 2, then 15 days per year from year 3.

When a policy has multiple accrual schedules, the on-screen rule applies: "the schedule that has the smallest waiting period will be picked up first, followed by the schedule with the next smallest waiting period... If an employee's waiting period coincides with multiple accrual schedules, the schedule will be selected as per the order defined when creating the policy." Two schedules cannot share the same waiting period. Saving that combination is rejected with "The waiting period cannot be the same across multiple accrual schedules."

[Screenshot: Accrual Schedule section with multiple tenure tiers]

#### How Flat Amount on Hours Worked accrues

This method does not run on a calendar. Time accrues from the hours UZIO Payroll pays. When a payroll is approved, UZIO takes the employee's paid hours for that paycheck, divides by the "hours worked" figure you set on the schedule, and multiplies by the Accrual Amount.

Example: the schedule grants 1 hour for every 30 hours worked. A paycheck with 80 paid hours accrues 80 ÷ 30 × 1 = 2.67 hours. The Maximum accrual and Maximum balance caps apply to the result.

By default the hours that count as "worked" are Regular Wage, Overtime, Double Overtime and Holiday Premium. Whether you can change that set on the policy form has not been confirmed; treat it as the standard behaviour. Proration does not apply to this method. Accrual simply starts with the first payroll approved after the waiting period ends.

3. Additional Details

[Screenshot: Add Time Off Policy form showing the Additional Details section]

#### First Usage Anniversary: the rolling per-employee reset

The other three reset options reset everyone on a fixed date. First Usage Anniversary runs a personal 52-week cycle per employee, anchored on the leave date of their first approved request. When that anchor plus 52 weeks passes, any remaining balance is forfeited and a fresh grant equal to the Accrual Amount is issued. The next cycle does not start until the employee's next approved request. It exists for rolling-year statutory leaves; the auto-created NY State Prenatal Leave policy works this way. The system enforces these constraints at save:

• "First Usage Anniversary policies must have exactly one accrual schedule."
• "First Usage Anniversary policies require accrual method 'At the End of Waiting Period'."
• "Carryover is not supported when Balance Reset Frequency is set to 'First Usage Anniversary'."

#### Hour Increment (Hours-unit policies only)

Policies tracked in Hours can enforce an Hour Increment. Employees must then request time in exact multiples of the increment. An increment of 1 means no 2.5-hour requests. Enabling it on a Days policy is rejected: "Hour Increment is only available when Leave Calculation Unit is Hours." The value must be positive and cannot exceed the policy's Standard Daily Working Hours ("Hour increment cannot exceed the policy working hours per day (8.0 hrs)."). First Usage Anniversary policies additionally require a whole number: "First Usage Anniversary policies require Hour Increment to be a whole number (e.g., 1, 2, or 4) - not 0.5 or 1.5." What employees see when they get it wrong is quoted in Common problems.

1. Click Save and Continue to proceed (next you assign employees), or Cancel to discard.

Expected outcome

• The policy appears on Time Off > Policies as a tile showing its Policy Type, Status, and Effective Date, with View Policy and View Employees links. A policy stays Incomplete until employees are assigned, then becomes Active (assign policies).
• Assigned employees accrue automatically. A daily job processes each policy's accruals (by default at 8:00 AM, server time), so an accrual dated today appears during the morning rather than at midnight. Balances, accruals and usage appear in each employee's Time Off History and on reports.

What the policy feeds downstream

• Payroll (paid time off). Approved time off is paid through UZIO Payroll only when the policy is linked to a company earning. On a Vacation or Sick earning (or Unpaid Time Off for unpaid policies) under company-level earnings, the Time Off Policies selector lists your policies; pick the policy or All. Each pay run then pulls the approved time-off dates that fall inside the pay period onto that earning as hours. Days policies are converted to hours using Standard Daily Working Hours or the employee's work schedule. Without the link, approved time off is tracked but never reaches the pay run. See Setting Up Company Level Earnings.
• Payroll (accrual). Flat Amount on Hours Worked accrues when a payroll is approved. Voiding that payroll reverses the accrual automatically (details).
• Pay stubs. With Display balance on employee paystubs? = Yes, each pay stub shows the policy in a Paid Time Off Details section: policy name, amount accrued in the pay period, and balance.
• Termination. With Balance Payout on Termination? = Yes, the remaining balance becomes a PTO Balance Payout earning on the final paycheck (details).
• Approvals. The approver setting decides whether requests land in the Reporting Manager's queue (manager article) or with the Employer Administrator.

Common problems

Why is my new policy still "Incomplete"?

A policy stays Incomplete until at least one employee is assigned, then flips to Active automatically. Assign employees (how). There is no separate "activate" step. Incomplete and Expired policies never accrue or reset.

Why can't employees request time off right after I assign the policy?

Two policy settings gate early requests. Both produce the same on-screen message with the earliest allowed date filled in: "Time off request dates should be on or after MM/DD/YYYY as per the policy setup."

• A usage waiting period: requests must start on or after the hire date (or Adjusted Service Date) plus the waiting period. Accrual may still be running in the background.
• The policy effective date: no requests dated before the policy starts.

If the date in the message surprises you, check those two fields on the policy.

Why was an employee's request rejected for balance?

"You cannot request leaves more than your available balance." The policy has Is there a negative PTO balance allowed? = No, and the request exceeded Available Balance (Current minus Scheduled). Either the employee waits to accrue more, or you allow negative balances on the policy, or an admin adjusts the balance.

Why won't my policy save with First Usage Anniversary or Hour Increment?

The save-time guards and their exact messages are listed in the two sections above. First Usage Anniversary demands exactly one accrual schedule, the "At the end of Waiting Period" method, and no carryover. Hour Increment demands an Hours-unit policy and a positive value no larger than the daily working hours.

An employee's requests are being rejected in odd hour amounts

If the policy has an Hour Increment, employees see: "This policy requires leave in 1-hour increments. Offending day(s): 2026-08-27. Please enter a value that is a multiple of 1 (e.g., 1, 2, 3)." (with your configured increment substituted). They need to re-enter hours as a multiple of the increment, or you relax the increment on the policy.

Approved time off is not showing on the pay run

The policy is not linked to a payroll earning. Open the Vacation, Sick or Unpaid Time Off earning under company-level earnings and add the policy in its Time Off Policies selector. Runs created after the link is saved pick the hours up; a run already in progress needs the hours entered on the grid.

Related articles

• Assigning Time Off Policies
• Understanding Accruals, Carryover, and Balance Resets
• Managing Holiday Calendars and Policies
• Setting Up Company Level Earnings
• Automatic PTO Balance Payout on Employee Termination