Leave Calculations for Contractor Employees: How Do You Handle Leave Encashment Policies?

Please guide me on the issue of leave calculations for contractor employees. We have outsourced contract employees and a provision for a leave encashment policy for them. I have a query regarding this. Generally, leave is calculated as 1 leave for every 20 days present (i.e., 1.5 for a month). Is it calculated like this for a 12-month period as 18 leaves, or is there any other calculation method? Please provide guidelines for the same.

Hello Deepak Kumar,

I am Deepak Kumar from Ranchi, and I am currently seeking a job in a reputed company. I would like to learn more about the HR department and personnel liaisoning, as well as obtain information about application formats.

Thank you,
Deepak Kumar
9798126255

Dear Deepak Kumar,

I am Deepak Kumar from Ranchi, pursuing a job in a reputed company as an HR Officer. I am interested in learning more about technical aspects of the HR department, liasioning, legal matters, and all application formats.

Thank you,
Deepak Kumar
9798126255

Dear Deepak,

It is not the answer to the question raised by someone. Please raise your query with a separate heading so that you can get a proper answer. The question was regarding leave calculation. In factories, it is one leave for every twenty days of work; however, under the Shop and Establishment Act, the rules are different. In factories, the maximum leave entitlement is 15 days in a year.

Thank you,
J.S. Malik

As per the Shops and Establishment Act (Mumbai), the establishment should provide for CL-6, Sick Leave-6, and PL/EL of 15 days to their employees in one year.

I am not sure if this varies from state to state. You may want to check with your state for clarification.

Your solution is here:

The minimum working days in a calendar year is 240. Take into account that when he is present and signed in the register, meaning physically he should work, ESI accident leave can be considered. If he does not exceed 240 days in a year, then he is not eligible for Earned Leave. This policy is for a factory. Since I am not familiar with your organization, if it falls under S & E regulations, please check the local act. Similarly, for S & E, we can consider this calculation.

Hi Sujit,

Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed, during the subsequent calendar year, leave with wages for a number of days calculated at the rate of:

A) If an adult, one day for every twenty days of work performed by him during the previous calendar year.
B) If a child, one day for every fifteen days of work performed by him during the previous calendar year.

Regards,
Pramod

For PL calculation under the Factories Act, 1948, if in the previous calendar year, there were 240 days of work (including all SL, CL, PL, weekly offs, ESIC leave, and holidays), then the employee is eligible for PL. For every 20 days worked, the employee is entitled to 1 PL. Could you please confirm if my understanding is correct?

Hi dear,

While giving a query, please mention the type of establishment, such as those covered under the Factory Act or the Shops and Establishment Act. Normally, if your establishment is covered under the Factory Act, the provisions of the Act apply to contractor workers as well. For this purpose, please refer to the provisions of Leave with Wages.

For the computation of 240 days of actual presence, accident leave, maternity leave, etc., are required to be considered. Layoff provisions will not be applicable to contract employees. Please refer to the State rules of the Factory Act as well.

Himanshu Pathak

R/S

Please explain what is "liaisoning" and where it is used. Also, provide details of HR admin personnel and IR.

Regards,
Manju

I am a contract-based employee in a company. I want to know how many leaves are allowed for a contract-based employee in a year.

Leave Encashment for Contract Workers

We have engaged contract workers in a factory environment and are governed by the Factory Act. According to the Contract Labour Act, if a worker works for 240 days in a calendar year, they are entitled to avail annual leave or leave encashment. However, the principal employer is insisting on making leave encashment mandatory even if the workforce has not completed 240 days of service.

I would like to know if there is any provision for leave encashment for contract workers. Can a worker be eligible for leave encashment even if they have not completed 240 days of service?

Please advise me on the above subject.

Regards