Anonymous
Dear All, As per the policy, we are crediting EL only after the employee completes one year of service. Crediting of 15 days of EL happens in January of every year.

When an employee resigns in the middle of the year, say, 1st Oct,
• We are deducting the leave on a pro-rata basis, in this case for 3 months (OND) which is 3.75 days and
• Encashing the balance left.

Is this practice correct? or should we add the current year's leave also during FNF and pay the employee for the balance left of the previous year + the leaves of the current year (from Jan to Oct in the above example)


On termination of employment, the encashment of Earned Leave called by whatever name is a statutory terminal benefit in almost all the establishment-specific Labor Laws subject to the ceiling on its accumulation fixed therein. Accumulation of the EL is a continuous process over the years based on the leave earned and availed by the employee every year.
In case of termination of employment occurring before the completion of a year, the eligibility for earning leave becomes available only when the outgoing employee having completed 240 days of service within the spell of service before termination.
In such a situation, the leave earned during the spell of the year has to be computed and added to his leave balance for the purpose of encashment. Otherwise not necessary.

From India, Salem

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