You need not pay contributions on leave encashment under both the acts.
(22) “wages” means all remuneration paid or payable, in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes 35[any payment to an employee in respect of any period of authorised leave, lock out, strike which is not illegal or lay-off and] other additional remuneration, if any, [paid at intervals not exceeding two months], but does not include—
(a) any contribution paid by the employer to any pension fund or provident fund, or under this Act;
(b) any travelling allowance or the value of any travelling con¬cession;
(c) any sum paid to the person employed to defray special ex¬penses entailed on him by the nature of his employment; or
(d) any gratuity payable on discharge.
Refer the attached files
Excellent HR Services,
Sharing practical not theoretical exp. in general language Leave encashment is paid on annual basis and any amount which is not paid on monthly basis doestn't comes under any deductions also this is not a salary /wages so no deduction is to be made. But You can make deductions(Only ESIC not PF) on Incentives if it's paid on monthly basis since the payments gap is less than 3 months. PF deductions are made only on Basic salary and not on any other benefits provided to employee.
Any Corrections towards this are welcome.
Here I am trying to give some practical experience in encashment of leave.
Based on the Company Policy/Standing Orders you can take either Basic+DA or total components.
For both cases you have to divide it by 30 to arrive encashment for one day.
Then you can multiple it with the no of days to be en- cashed. Please note that this encashment will attract IT as the case may be.
Hope it is clear.
Excellent HR Services,
My company is a BPO company, and we had a annual limit of 15 PL per year. My query is that if I resign the company say after 4 years what would be the PL balance ( in case i had not taken any single PL in 4 years), will the PL payable to me is 15*4 = 60 days or it would be 15 PL's only. As per my company policy at the end of FY my previous PL will get lapsed. Is it correct , can my company do that.
Please revert as soon as possible. It is a bit confusing ( why should an employee suffer due to this company policy) And if this can be done can you please provide any document for this. My company is under Delhi Shop and establishment act.
Pls ignore earlier Thread.
Our company gives Leave with wages @ 6% to the employees .... My question is that should we deduct E.S.I & P.F on leave with wages provided to employees ?
They are paying leave encasement every year in April.
Do you thing that they have to pay PF ESIC on leave encasement also?
For total employees offering only 15 days leave is it correct as per low?
Paid holidays are separate ant it will declared every year Jan.
As per the order of the Hon'ble Supreme Court of India, EPF contributions not be paid on leave encashment, my question is if the daily wages worker has worked for 25 days and has been given 2 days leave encashment against his absenteeism, in this case weather contribution on EPF and ESIC is to be paid or not.
Also if the leave is being paid on monthly basis to the employee, though he does not require it, what would be the circumstances for EPF and ESIC.
As per my understanding Earned leave under the Factory Act or in any Act is the discretion of the worker who has earned it, employer can not impose payment of leave with his salary on monthly basis.
Request all seniors and learned council to explain each point.
Consultant & Advocate Bhopal M.P.
In concern to Leave Encashment, we are clearing the amount in every six months, would like to know if it covers under the ESI deduction or not. If yes, then we'll start the encashment on annual basis, hope then ESI deduction will not be applicable.
Kindly request to please guide on the same.
Thanking you all in anticipation
Appreciate the response