Hi All,
Need your help to know about Earn leave encashment in Full and final calculation as per Mumbai shops & establishment act.
Earn Leave enchashment is calculated on current (last drawn) basic +DA or on Gross salary per month. In Factory's act 1948 sec. 80 it is stated as rate equal to daily average of his full time earning. Please guide.


13th June 2017 From India, Mumbai

Dear Kshitija,

As per Shops & establishment act for mumbai you can encash earned leaves on Basic + DA. Some companies to extend an facility to the employees to encash it on gross. But this is completely Management call.
13th June 2017


As per section 36 of the act the payment should be made on gross wages. The section is reproduced here.

36. Pay during leave.-Every employee shall be paid for the period of his leave at a rate equivalent to the daily average of his wages for the days on which he actually worked during the preceding three months, exclusive of any earnings in respect of overtime.

Manoj, you stand corrected.
13th June 2017 From India, Mumbai

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