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You are authorised to create users as per your subscription package. As mentioned above user types can be selected while creating user.

Enter all the valid details of user, Employment Id needs to be unique.

Is Department Head? This refers that created user is the head of the department and all the leave applications will be redirected to HR as well as to this user. Which states that head of department have right to approve or reject a leave application of the staff member from there department.