My company has attendance and Payroll software. If proper In-Out punches are not applied and no leave is balance then automatically it calculates LOP for those days. In this case, the basic salary is also reduced in proportion to the absent days. What if an employee during the notice period deliberately takes leaves over and above available and also misses to punch for attendance, the salary for that month gets reduced ( i.e basic changed). So for calculating Gratuity, the last working month's basic will be considered (reduced) or the basic as per the CTC. (Service rendered is more than 7 years.)
From India, Pune
Labour Law & Hr Consultant
Partner - Risk Management
Deputy Commissioner Of Labour..a.p.


The gratuity is paid on the last drawn salary
It refers to the pay scale and not the actual amount of take home pay or the salary given by the employer.
LOP will not affect the gratuity amount payable.

From India, Mumbai

The wages/salary of the employee shall be affected for his absence from office which may be due to leave/absent owing to mis-punch.
The calculation of Gratuity is done on Basic rate of wages at the time of leaving service but not the basic wages paid out of attendance in last salary drawn.
The days of absence has got only impact on calculation of continuous service.

From India, Mumbai


It seems that your company is too harsh on employee's minimum rights. Who said to reduce the basic pay when he doesnot having leaves in his leave account. First learn and feed the computer biometric thumb impressioned Attendance.

Every company employee avails all yearly general casual leaves he can avail medical leaves for one month in a year. Your biometric machine does not feed with that information I think.

Never prefer to reduce basic even though he avails all medical leaves also. You have only right to deduct that absent days salary by calculating single day salary. For suppose his salary is altogether without monthly deductions is 13000.

Devide it by 26.then comes rs 500per day.

You can deduct that money multiply with Absent days and pay balance salary by deducting regular pf esi deductions.etc....

You have no right to reduce basic pays for LOP.

If he challenges in labour court he may win over you in Quasi Judicial Authority court. Because of illegal deduction of employees salary by doing unfair labour practices by your company.

I think this reduction of basic pay of employee for his LOP situation at the time of Appointment agreement order.

From India, Nellore

Dear friend,

LOP can also be authorised, if the employee specifically applies for it in advance and you just stop with proportionate salary cut. Therefore, no way it can affect the continuous service for the purpose of gratuity later.

If you want to exclude that absence as unauthorised one, you have to declare such unauthorised absence as break in service as per your service regulations

I am not a software expert to suggest suitable modifications in the software in this regard.

About the availing of leave during notice period by an exiting employee knowingly no leave at his credit, you can extend his notice period accordingly. It is better to inform the emp;oyees about their leave balance whenever they go on leave.

Regarding last drawn salary for the purpose of gratuity, it is the salary payable under the contract of employment on the date of termination of service giving rise to payment of gratuity and NOT that actually paid as rightlysuggested by our friends.

From India, Salem

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