Am in to hospitality sector (Under KSCE-1961) I wanted to clarify the leave encashment confusion whether it is paid on gross / Basic+DA. Under the act its defined wages means Basic+DA but in my last assignment we had paid on Gross salary, as well as present company says pay on BA+DA. Kindly advice
Encashment of leave is only on Basic & D.A as per Act, if organisation willing to encash on whole salary including allowances then it is fine (up to the policy of company).
Keep in mind the calculation should be based on 26 days.
It is good practice to pay leave on gross wages becuase sometimes we adjust EL into employee absentism (if employee wants to adjust his/her Earned leave from the leave account) then adjustment is on gross one day wages against one day leave.
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