PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
KRISHAN KUMAR TYAGI
Corporate Hr Head
Dy.manager-hr & Ir
Manager - Finance & Hr
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As far as my knowledge goes... Leave deduction is done is the same manner across all level of employees in the org.
Leave Deduction is done on Gross where as leave encashment is done on Basic.
Hope this will be of some help to you.
From India, New Delhi
apintoAs a norm, Leave encashment is done on basic and deduction is on the Gross. However, from HR point of view, the employee, due to his work pressure, will abstain himself from enjoying the Earned Leave eligible to him and work in the interest of the company. Then, why should the company pay him only his basic ? Suppose he goes on excess leave, then his entire gross would be deducted.
I feel this is not fair. In my company, I have strongly put this point to my management, and they have accepted it as a motivating tool for all those who give extra mandays.
Fin & HR
From India, Mumbai
Happy Holi to you too, though it is a bit late for this Holi.
As regards your querry, in most organisations, deductions is made on the basic and then made applicable to the gross by deducting proportionate other components such as DA, CCA etc.
From India, Bangalore
amendonhey all...i am an mba-hr student.....can someone tell me about the entire leave deduction process. i.e how leave duductions as well as encashments are done in organisation.waiting for replies.
KRISHAN KUMAR TYAGIHi everybody,
When we recruit a person we expect him to work and in lieu we pay him salary and some other benefits. If the person is absent (i.e. he is neither present, nor on off, nor on holiday and nor he is on leave), he does not work for us on a day he should have been working.Therefore why should we pay him anything. Word leave deduction is not correct. As a matter of fact the employee is absent. He was recruited to work for the Company and get paid. He was not recruited to be absent. (Unauthorized absence from work is a misconduct inviting punishment).
As regards Encashment of Leaves, good Companies want their employees to take leave, enjoy, fulfil their social commitments and take proper rest so that when employees come back to work, they are fresh and their batteries are again charged up. But still they provide for encashment because law provided for it and it can also be a source of additional income for the employee. Argument that when we do not take leave, we work more is also not correct, because a sincere and responsible employee will finish his work before proceeding on leave even if he has to sit late.
So both the situations are not exactly opposite of each other. This is why in case of absence we deduct on the basis of gross while in case of encashment we pay only on the basis of Basic pay.
If we start paying for encashment on the basis of gross as has been suggested by Pinto then employees will come to work even in situations they should be taking leave, resulting in tiredness, lethargy, mental fatigue etc. Companny's productivity will go down, mistakes will increase and ultimately Company will loose instead of gaining anything.
From India, Delhi
amendonthanx a lot krishnan. your post seriously put some things in persective. its funny how we sometimes overlook factors like lethargy and stress in employees. wat are the maximum number of days that can be encahsed on your organisation or in general??
KRISHAN KUMAR TYAGIThanks Akshay for your encouraging words.
Encashment is directly linked to accumulation. Leaves are allowed to be accumulated for two reasons: 1. Suddenly employee may have to go on a long leave (like in case of sickness) and his annual entitlement may not be sufficient to meet this emergency.
2.There may be sudden demand for money. In this case encashment helps.
Therefore generally Companies allow encashment up to 50% only so that balance leaves are in reserve for sickness etc..
Minimum accumulation as per Factories Act is 30 days.
From India, Delhi
shveta1105Dear All, In my company management is deciding to deduct double salary per day of number of extra leaves. Do u think it is right? Please reply ASAP. regards shveta
From India, New Delhi
n_kumar_kHi Every Body I am newly joined member i want to clarify one thing for example my CTC is 1.20 lacs and the basic is 4000 ,if i am for 2 days then how this will be calculated
From India, Visakhapatnam