Understanding Earned Leave Calculation: How Do You Handle Salary and Absences?

Dear All,

Can anybody suggest to me how to calculate earned leave:

1) Is it based on basic salary or gross salary?
2) We give 15 EL days in a calendar year. If it is proportional, how can we calculate if an employee is absent for 60 days?
3) In cases where there is no salary structure but EL has been given in advance, the gross salary is affected. When we give encashment, the amount paid will be less than the advance.

Regards,
Lalit

Calculation of EL

Total working days (i.e., worked by an employee in a Calendar Year): 20

Regards,
Sanjeev Kwatra

Dear Friends,

For the calculation of ELs: Total working days (Physical presence only) excluding Sundays, National & Festival Holidays, and any leave days divided by 20. (i.e., an adult employee who works 20 days in a month will be eligible for 1 day as EL).

Regards,

PBS KUMAR
9848499629

I would like to add one thing to the reply of Mr. PBS Kumar: the employee who was present for 240 days in the last calendar year is only eligible for EL. For the purpose of calculating present days, weekly offs, national and festival holidays, and leaves must be considered.

Narendra

Dear Narendra ji,

Your answer is true that taking into consideration the EL calculation, 240 days are mandatory. However, as per Section 79, Explanation-2 of the Factories Act, it states that "The leave admissible under this sub-section shall be exclusive of all holidays whether occurring during or at either end of the period of leave." Regarding other leaves such as CL/SLs, they generally should not be clubbed with the ELs. (PLEASE REFER TO THE BOOK OF HL. KUMAR'S "A BOOK ON LEAVES, ABSENTEEISM").

Regards,
PBS KUMAR