Compensatory Time Off (CTO) – Sprout Solutions

With our new feature, Compensatory Time Off (CTO), you may now convert an employee's overtime hours to leave credits! The great news is HR Champions wouldn’t need to add leave credits manually for employees who have rendered OT hours!

Upon its release, you will notice an additional Leave Type named Compensatory Time Off under Leave Types and Policies (Maintenance > Company > Leave Types and Policies) which Administrators have the option to activate.

Note:

Before the plan can be created, please send in a Change Request Form to enable the CTO policy.
- Once enabled:
  - Newly created companies under the account: The Compensatory Time Off leave type is found as an inactive leave type
  - Existing companies under the account: The Compensatory Time Off leave type must be created as a new leave type that is named exactly as "Compensatory Time Off"

1. Activate Compensatory Time Off leave:

2. Once activated, you will be taken to a set up page where you can set rules for CTO. After setting up the leave policy, Admins can now assign employees to the leave policy just like with other leave types.

Employees can now earn leave credits for the excess time they rendered by first applying this as Overtime. Though you're probably wondering how are the overtime hours converted into CTO credits. Well, Compensatory Time Off credits are computed by dividing the number of hours of the applied overtime over the number of hours to work excluding the break from the Employee Profile. Let's take a look at a sample scenario below:

Schedule Type: Normal Shift

Shift Schedule: 8:00 AM to 5:00 PM with a break from 12:00 PM to 1:00 PM

Total hours to work (including the break hours): 9

Biologs: 8:00 AM to 7:00 PM

Given this, the employee would have earned 2 hours worth of overtime as they would have completed their required hours to work (including the break hours) by 5:00 PM. Using the formula, the computation would be as follows:

Overtime hours / total hours to work (excluding the break) = CTO credits

2 hours / 8 hours = 0.25 credits

As such, the employee will now gain 0.25 Compensatory Time Off credits. In order for them to use this, they must first file the overtime work as Compensatory Time Off.

3. Apply overtime hours as Compensatory Time Off.

There will be a new OT classification in the dropdown - “Compensatory Time Off” that should be selected. Only employees who are assigned to the CTO leave policy will see this additional option in the OT dropdown.

Note: Biologs should be required in filing OT applications in order to use the CTO OT Classification. If biologs are not required, the employee will not be able to file their overtime and convert the excess work hours to credits.

4. Once an employee has sent an OT application tagged as CTO and his supervisor approves, OT hours will then be automatically converted to leave credits.

Upon conversion, the countdown of the credit expiration would begin and would depend on the number of days set on the leave policy. For example, the expiration of credits is set to 2 months after conversion; once the overtime application (tagged as CTO) has been approved by the immediate supervisor, the system would now begin to count the calendar days until the credits expire.

Pretty easy, right? Though, here are a few reminders to take note of regarding the Compensatory Time Off:

OT applications will follow the same policies of the regular OT (e.g. Minimum and maximum hours to be applied, and the number of days before and after for applying)
Biologs must be required for the overtime application to be credited as CTO credits
The minimum applicable leave would still be 0.5 credits and the rules for applying will be based on what was set in the Compensatory Leave policy
The Import Credits button (bulk upload of credits) will not apply to the CTO leave plan as overtime hours are automatically converted to credits. Though the leave plan would still be included in the generated Excel file.

Note: As of now, this is only applicable to Normal Shift, Flexible per Day, and Supervisor Shift Schedule Types. Though please note that for Compressed Work Week, the system will consider the revised total required hours to work based on the new setup.

Rest assured, we'll keep you posted for more updates regarding the Compensatory Time Off feature of Sprout HR!

Related Articles: How to Create CTO Leave Plan

If you have further concerns, please don't hesitate to reach out to us at experts@sprout.ph!

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