Paid Leave Dilemma: Should We Grant Leave in the Current Year or Next?

I am trying to evolve the leave policy for our company. Some people tell me that the general practice of providing paid leave is to calculate the eligible paid leave days at the end of the current calendar year and then provide these days as paid leave during the next calendar year. Is it right to follow such a system, or should the eligible paid leave be provided during the current year itself? In that case, how does one manage the leave earned during the last month?

Regards, Uttam

Hi Uttam,

Regarding Paid Leave, it is better that it should be availed in the current year itself. I give you some guidelines regarding the Paid leave policy.

Hopefully, it would be useful to you.

Earned Leave

a) This is applicable to all permanent employees. This is leave that a person earns by virtue of actual work put in by him.

b) Earned leave is computed for the period of April-March. The maximum number of days of leave that a person can earn in a month is 2.5 days and in a year 30.

c) Since earned leave is related to the actual days worked in a month, the same is computed based on the following table:

Days worked EL earned

01 - 05 Nil

06 - 11 0.5

12 - 17 1.0

18 - 23 1.5

24 - 26 2.0

27 - 30/31 2.5

d) For determining the days worked, the days on which the staff is on EL, duly sanctioned with pay will also be considered.

e) Earned leave cannot be taken in more than 4 installments in a year (April-March).

f) An employee is not allowed to take earned leave exceeding the leave to his credit at the beginning of the month.

Regards,

Kiran.N

Hello Uttam,

Firstly, I must congratulate Kiran Namburu. The method for calculating earned leave was truly informative. Both policies are prevalent in different companies. The general practice is providing paid leave at the end of the year. However, I am an advocate of making EL payments at the end of the month.

By making payments to the employees at the end of every month, one ensures that the employees are rewarded for coming to work within a shorter span of time, i.e., one month, and are likewise punished for absenteeism. This encourages and motivates employees to come to work, especially in the case of those employees who face the Monday morning blues.

Thank you.

Regards,
Shyamali

Thank you for the responses.

Since our company is small, we will prefer to keep things simple and will probably go for an annually calculated paid leave days model.

A thought: Suppose an employee leaves his/her job during the last week of December, how does one provide or encash the paid leave if it is calculated on an annual basis? I mean, if the leave becomes available for use or encashment during the next calendar year at which time the employee is no longer in employment, will the ex-employee be eligible to get encashment of leave earned for the days which the employee is no longer in a position to enjoy?

Regards, Uttam.

Dear friend,

The resigned employee will be eligible to receive his leave encashment.

Regards,
Martin

Dear Uttam,

In our company, our leave policy states that we can accumulate earned leaves for a maximum of 2 years, after which they lapse. Encashment is at the discretion of the management or can be done at the time of the employee leaving the organization. Additionally, there may be a minimum number of earned leaves required for encashment. This practice is common in most companies.

Regards,
Julie