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At this stage Xero doesn't recognise if an Employee is on Unpaid Leave.

Xero's default behaviour when an employee (that is assigned to a holiday group) submits a request for a period of Unpaid Leave spanning one or more public holidays, is to exclude those Public Holidays from the calculated Unpaid Leave hours.

This has the effect of allocating those Public Holidays as paid hours in a pay-run rather than as unpaid hours. This is not consistent with the Fair Work Act (https://www.fairwork.gov.au/employment-conditions/public-holidays/not-working-on-public-holidays)

If this is not picked up and adjusted before finalising a pay-run it can result in over-pay, with a knock-on effect in relation to super payments and the possible over-accrual of other leave entitlements which would need to be reversed using unscheduled payruns.

At present, manual adjustment of the calculated unpaid leave hours prior to posting/finalising a payrun is the only viable preventative solution since other workarounds such as removing an employee from a holiday group would have undesirable consequences for the way public holidays are treated for paid leave types.

The need for manual checking and adjustments just add to the administrative burden.

A better and simple solution would be for Xero to either:
• change the default behaviour to include public holiday hours in the unpaid leave type, or
• add a payroll-admin selectable option to include or exclude public holiday hours from leave types