Is It Right To Deduct Leave Or Salary In Lieu For The Days (i.e. Sunday Or Holiday Or Weekly Off) For Which We Are Not Paying.? - CiteHR
Saswatabanerjee
Partner - Risk Management
GOD_LEO19
Jr. Hr Manager
Taran Bhawsar
Manager Hr
+1 Other

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Dear all,

I am working as HR in an IT company from last 3 months. I am the first and only HR of the company, before me there was no HR Department in company. Earlier the Director of the company, himself calculated the salary by formula total salary/total no. of working days, but from last 3 month i was calculating salary by formula total salary/total no. of days in that month. Here is the conflict arrises and I and the Director had a healthy discussion over this topic, he told me to find out written rule in any of acts for calculating salary. Then I search on net, read Employments Acts like Minimum Wages Act, Payment of Wages Act, Company Act, Shop and Establishment Act etc. and even on citehr and found nothing in proof to support my view or boss view. From CiteHR discussions I concluded that both the method for calculating salary is right in their ways.

Now the confusion arrises in my mind ,It is mandatory to count any sunday or holiday or weekly off as leave if comes in sactioned leave period.

Now If we calculate salary by dividing total no. of working days (i.e. 26 days in general) that means we are not paying for sunday or holiday or weekly off.

Is it right to deduct leave or salary in lieu for the day (i.e. sunday or holiday or weekly off) we are not paying.?

I think its wrong, because ethically we should not deduct salary for day for which we are not considering in salary calculation.

Please help me out to clear my concepts.

Thanks & Regrads,

Taran

Salary is always fixed for per month/per annum basis, it is not fixed for working days. The Leaves are counted on yearly basis and is counted irrespective of Weekly Off/Holiday etc.
Last but not the least Leaves are not deducted from salary but it is paid as salary. Only LWP/LOP is deducted and that is counted only on working days and not on weekly off/ holidays

Somehow, i am not clear on what exactly you are asking. However, based on my understanding, I am putting down the options you have.

1. Salary is for a month (or year) as Saji said. So it means anyone who works for the entire month, gets the full salary irrespective of number of working days, weekly offs and holidays where the unit was closed.

2. Where a person took approved paid leave, he will still be eligible for the full salary

3. Where a person was absent or on Leave Without Pay, then you need to compute the amount to be deducted for number of days absent. This working is done by first computing a per day rate (Salary / 26) and multiplying that by number of days absent.

In the above working, since you are taking 26 working days, you are automatically paying for the weekly off by excluding it from the computation. Meaning, you are increasing the cost per day, to account for those not worked. There are a number of judgements on this saying that per day rate is computed by dividing salary by 26 days not 30 / 31 days. Even most of the minimum wages notifications issued by the state providing for dividing salary by 26 days.

You can opt for dividing salary by 30 days, but then you must count all weekly off and holidays as working, even though the employee has not come to work. In most cases, following this will mean that the employee gets more salary (do the mathematical working, you will understand). However, this is not the generally accepted practice in law.

In the end, you are in a small company and the employees are not going to raise an issue about a few rupees lost on either methods.

dear taran,
above all ans is right
i give u one example
if my salary is 10000
formula total salary/total no. of working days
=10000/26(excluding weekoff) =384.61 (near about 385)
and
formula total salary/total no. of days in that month
=10000/30 or 31 (including weekoff) =333.33 (near about 333)
so difference is 385-333=52
so that daily wages is increase Rs. 52/day.
if any other query or suggestion tell me.

Respected Saswata Banerjee,

Futher to discussion, as you said in your 3rd point,

"Where a person was absent or on Leave Without Pay, then you need to compute the amount to be deducted for number of days absent. This working is done by first computing a per day rate (Salary / 26) and multiplying that by number of days absent."

That I know and I agree with it.

but my concern is

My Boss is saying same as you said in point 3rd, that means we are excluding sunday or any Holiday of the month (and we are not paying for sunday or holiday) right? now if an employee went on leave (let assume it all leave without pay) from any saturday to next tuesday, so how much days of LOP I have to deduct from salary, My boss says 4 days (i.e. Saturday, Sunday, Monday & Tuesday) he supported his point by saying the labour officer from labour office instructed to include sunday or holiday in Leave in such cases, than I put my point that we should not deduct salary for the days we are not paying i.e. forsunday or any holiday with supporting point that it is not ethically right that if we are not paying for sunday or holiday how can we deduct for the same.

Hope my concern is much more clear to you. please give me your opinion and suggestions

Regards

Taran

My Dear Friend, LOP (Loss of Pay) LWP (Leave without Pay) are counted only for Paid days and not for Weekly Off's. Hence Sunday will not be taken as part of LOP/LWP.
LOP/LWP are only counted excluding the Weekly Off's.
If you still need any further clarification please feel free to call on the undersigned.

Thank you MR. Saji and Mr. Mayur for your opinions, please go through my previous comment and give me your valuable opinion and comments regarding my concern. Regards Taran
I have gone through your comment, just understand that Leaves (EL/PL) are counted/adjusted against No. of days (including W/Off and Holidays) as per the eligibility. But LOP/LWP are counted/deducted from the Salary only for Paid/working days (excluding W/Off and Holidays) I hope your query must have resolved. Please feel free to call me at 9586350505/9913895645 for any further clarification if required,
Thank you Mr. Saji,
Regarding LOP & LWP It is very much clear to me now, but in respect of EL/SL/PL is it ethically correct to Include week offs/ or holiday falls in leave period for counting or adjusting remaining Leaves if we calculate per salary as dividing by 26. this cost an extra EL deducted from employee's account for week offs or holiday that we are excluding in salary?
Regards
Taran

Hi Tarun. Please note regarding the concept of salary. It is not on per day worked basis- unlike in case of daily waged workman. For example, let us assume that my monthly salary is 50K. My office allows every weekend as off. I work whole of month July. In that case I will get whole 50K as my salary (here for the sake of a simple example lets assume there are no deductions); even though actual days worked would be 23.
In most simple terms, formula to calculate salary would be, total CTC (yearly) divided by 12. This amount will give you monthly salary. This needs to be paid out. If you divide this amount by 26, then you are in fact paying for less days than you are supposed to.
Any employee is entitled to weekly offs and it is as such a paid off-day. Hope I have made it clear to you.


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