The rule type holds a subset of the work hour rules controlling the time and attendance calculation. The rules included are the overtime rule, the parameter list, and the relevant time balances.
The number of rule types you need is based on the number of employee categories and the various labor agreements effective within the company. Each variation between the agreements that affect the time and attendance calculation requires a separate rule type. You may also need a specific rule type for other situations, such as to keep track of contractors time.
The rule type is connected to the employee together with the employees schedule information. The connection is date effective.