As put in by Sandeep, there is no hard rule to say that salary should be paid for 26 days or 30 days. But if you follow Factories Act or Shops and Establishments Acts, there are provisions for granting of one day off after every 6 days of work. Let it be like saying " no employee shall be allowed to work for more than 10 days without allowing him a day of rest". It is implied that it is obligatory on the part of employer to grant him a day of rest with pay. Therefore, it is 30 days pay and not 26 days irrespective of worker or supersior.

However, where ever relevance to daily rates of salary/ wages are quoted in the law, the same is calculated taking into account 26 days and not 30 days. Under Payment of Gratuity Act, the daily rate of wages is calculated by dividing the monthly salary by 26 and not by 30. This is applicable to all irrespective of designation and salary. This is because by calculating the gratuity by dividing the monthly sum by 26 the amount will be higher than that calculated by taking 30 days.

When a leave without pay is taken by an employee, the amount to be deducted from the salary will be decided by the same average rate of salary. The same will be the rate for Over time Wages as well. So, if you choose 30 days, it shall be applicable to all except to those who are daily rated.

Regards,

Madhu.T.K

From India, Kannur
Hi Gurus,
I just want to know about my company's struture as they are paying 22 days in a month because we work only 5 days in a week.
By paying 22 days what the benefits the employer is getting?and what the pros and cons for the employees?
Thanks in advance!
RajeshR

From India, Madras
If your organisation is paying for 22 days, then the average rate will be the sum paid monthly divided by 22 which will be higher when compared to average daily rate found after dividing the same by 30/26. While calculating Over time (if applicable) or encashment of Leave the amount receivable by the employee will be higher when 22 days is taken, whereas, when an employee absents himself without pay, the loss of pay will be high. Therefore, it is always better to have a common number of days which will be applied in all circumstance. As put in by me in my last post, it is mandatory that an employee be given weekly off. Then why should not we take it as 30 days instead of 26 or 22?
Regards,
Madhu.T.K

From India, Kannur
What about PL or EL. If EL(Earned Leave) is given 30 days in a year what is the basic rule in calculating EL. Whether CL is included in this 30 days leave or not? or if CL is not included how they calculate the EL
From India, Coimbatore
Hi Guru's
For gratuity calculation 26 days is taken into consideration.
but for calculation generally it is 30 days only. In case of daily wages workers it is taken as 26 days as they are on daily wages. But in other cases it has to be 30 days .sundays are paid holidays .
In terms of OT calculation also it is practicable and profitable to take it as 30 days.
regards
Rajeev

From India, Bangalore
Hi!

I was reading the discussion threads on this topic with curiosity because I thought I would find new ways of understanding the rationale behind the "monthly salary factor" and the "daily wage rate computation" basis. But, it looks like the relevant labor laws and practices in India relative to this subject matter are the same everywhere. Moreover, it seems that many HR practitioners do not have solid backgrounds on Compensation Management ---- hence the rise of such questions/ querries.

As we all know, the basic principle in compensation is: NO WORK, NO PAY!

There is no exception to this rule, except the policy on "earned leave credits" where the company has promised the employee to pay even if they don't work.

The number of working days and hours in a week is dependent on the country where your company is located. This matter is dependent on both culture, legal laws, and industry where the company belongs. Hence, the actual workdays can fluctuate from a low of four (4) days to a high of seven (7) days per week. Some countries in Europe are using the four (4) day workweek (with some using the compressed workweek scheme) while many utility companies (e.g. power plants) worldwide work on a seven (7) day workweek under a compressed work schedule where rest days are lumped together at the end of their shift schedule. Many countries use the normal five (5) days workweek with an eight (8) hours work per day.

The issue of which factor should be used is again the prerogative of the company, unless there is a specific regulation on the matter by your country's labor law. But, I don't think that governments will mess with this issue, because the lower the factor used, the better the pay policy becomes for the employee. The higher the factor, the lower the daily and hourly rate for the employee.

Why?

As already mentioned, when a company uses a lower factor, e.g. 26 days (vs 30 days), the resulting daily rate for the employee will be much higher than if the company uses the latter (30 days). As we all know, the daily rate becomes the basis for the hourly rate. And the hourly rate becomes the basis for overtime (OT) pay.

Hence, many companies I know use the 26 days factor even if they only have a five (5) days workweek. Ideally, companies adopting this work schedule should use only the twenty two (22) or twenty three (23) days factor. But they won't and their explanation is that they are paying the rest day. For seniors like us, we know that there is a lot of BS in this rationale. The deeper and real reason is the daily and hourly rate that would result when the factor is lowered. The two or three days factor difference is a lot of money, esp for companies with thousands of employees.

What employees (and HR) should pay attention to is the distinction between the concepts "gross", "basic", "guaranteed cash", and "gross compensation". You would do well to let the company define these concepts from their points of view---- before you compute your advantages, esp when deciding whether to transfer from one company to another.

Best wishes and God bless.

Ed Llarena, Jr.
Managing Partner
Emilla Consulting

(landline)
(mobile)

From Philippines, Parañaque
As per my Knowledge Monthly Salary calucation as follows :
Fixed Salary/No.of days in that month x No.of days in that month
i.e for example - If the fixed salary is Rs. 10,000/-
then 10,000/31x31 = 10,000/-
for examplethe salary is for 20 days = 10,000/31x20 for the month 31 days
for examplethe salary is for 20 days = 10,000/30x20 for the month 30 days
for examplethe salary is for 20 days = 10,000/29x20 for the month 29 days
Per day salary calucation is = Fixed Salar/No.of days in that month
Some people are calculating the salary by dividing with 26 days every month it is rong as per my knowledge.
Thanks & Regards
G. Srinivasa Ramanujam
Officer - Admin/HR

From India, Hyderabad
This thread reminds me of the story of six blind men touching an elephant and interpreting it in their own way; one who touches legs says, "Its like a pillar"; one who touches the tail, says, "Its like a rope" and so on and so forth.
Its amazing to find such a variety of responses from members who are practising HR's in various companies.
It seems most of the members are not well informed about even such basic facts. How can we call ourselves "Professionals" ?
Dear friend, the authentic answer to this type of question lies in the various Labour Acts - Kindly take some time off, and study the relevant sections on Leaves; Leaves with wages; Working hours etc..
HRM practice badly needs standardization and an Apex Statutory Body like the ones for other professions such as CA, ICWA, Engineers, Doctors, Architect, Lawyers etc.
I hope, Madhu Sir will agree with my opinion.
Warm regards.

From India, Delhi
So, if the company will not provide weekly off or will deny to pay salary for weekly off then there is a contravention of law...for reference please refer respective state law...for ready reference i can tell 1 act as Punjab Shops and Establishment Act for Gurgaon.
From India, Delhi
dear HR team,

Actually, I am working with XYZ company on third party payroll and I am planning for short leave for a personal reason and i mailed to my hr team for leaving but they said to me that we will give you leave but as per policy it will mark LWP (leave without pay),

i am confused that i have no right to leave why it's unpaid leave i am working in manufacturing company their only sunday off i am working whole week without leaving any personal leave.

i am on roll employee in xyz company.

can you explain me is it right?

why it's LWP

they are saying me you have no leave you have only sunday.

why i have no other leave? and benefit?

please review your experience with me.

please help me on this matter and suggest me what should i do?

he maild me like this please help me.

i want to leave without any salary detection.

From India, Mumbai

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