New to HR: How Should I Classify and Manage Employee Leave Accruals?

Hi, I am new to the HR field, still pursuing my MBA in HR while working with a company as an HR Executive. Now, I need to create a leave policy for the company.

Currently, the policy states that an employee, after completing the probation period, will accrue 1.5 days of leave at the end of each month. I am seeking guidance on how to categorize this 1.5-day leave as casual leave and sick leave, and how to determine whether a leave should be considered paid or unpaid.

I would appreciate it if someone could provide more information on this matter.

Regards,
Nithya

Hi Nithya,

Please clarify a few doubts before I reply. 1.5 days in a month means your company allows a total of 18 days in a year. People are not given any leaves during probation, so are they entitled to all 18 days of leave for the next 6 months after confirmation, or are they given only 9 days of leave for the remaining 6 months?

First, you need to decide on your privilege and casual leaves. Casual leaves are short leaves usually taken for emergency purposes, which could include short sick leaves. Any leave beyond 3 days automatically becomes privilege leave. Privilege leaves are usually carried forward to the next year, but casual leaves in most organizations are not carried forward.

Finally, the leave structure will again change as per the company policies. But first, begin with defining privilege and casual leaves, decide on the number, and then allocate them accordingly.

I hope you now have some idea to start.

Regards,
Pooja

Hi Nithya and Pooja,

As Pooja said, it is better to decide the number of leaves and then go ahead with classification of leaves. I would like to share something that I knew. Casual leaves and sick leaves can be given equally, i.e., 0.5 each. Among these, casual leaves can neither be carried forward nor be encashed, whereas sick leaves can be carried forward but cannot be encashed. Finally, the privilege leaves can be carried forward and encashed. However, the encashment limit can be set as preferred by the employer. As it is 1.5 leaves a month, it is better to share this equally to all these three leaves, that is, 0.5 CL, 0.5 SL, and 0.5 EL monthly. Eligibility of these leaves may vary accordingly. Casual leaves and sick leaves can be availed after confirmation, and privilege leaves can be allowed only after a year or so.

Hope this will be useful for you, Nithya.

Regards,
Krithika

Hi Pooja,

I am a bit confused here. Is it mandatory for an employee to be granted privileged leave, sick leave, and casual leave?

During the probation period, which is typically three months for some employees and six months for others, they are entitled to 13.5 days of leave, earning 9 leaves.

How should I distribute these leaves as PL, CL, SL?

I would appreciate your help with this matter.

Thank you.

Dear Nithya,

Now you have confused me. First, tell me what are the yearly leaves declared in your company. Since leaves are always calculated on a yearly basis and pro-rata basis when the person joins midway. So first decide your yearly leaves.

But at the same time, it is not compulsory to define PL, SL, CL. Some companies have fixed yearly leaves which they distribute in monthly form and the employees can avail it in any form. But this is usually not a very good idea since at the end of the year the company will not know how many leaves to carry forward and how many can be encashed. According to industry standards, CL cannot be encashed. So, I think you should frame your leave policy in a more organized manner even if it requires you to change the policy of your organization.

Regards,
Pooja

Hi Nithya,

The policy we are currently following states that an employee, after confirmation, starts earning 1.5 days of leave at the end of every month. If the employee doesn't utilize the leave, it is carried over to the next month. As a result, there are certain employees who have around 12 to 18 days of leave accrued.

It's important to note that this leave is not classified into casual leave, privileged leave, or sick leave. If you need help structuring this leave policy, please let me know.

Regards,
Pooja

Dear HR,

I am very much confused regarding the leave policy and holidays as per the Bombay Shop Establishment Act. Could you please clarify?

Our company provides 1.5 leave days for every month along with 10 holidays.

Please let me know.

Regards,
Anamika

Dear Nithya,

Leave rules vary from company to company, and as per CLRA, if an employee works for 6 days, the 7th day will be a holiday. Each company will fix leave rules according to their convenience only. Normally, one day of leave will be given to an employee for every 20 days of work. For professional companies, CL can be availed on a pro-rata basis. SL and EL can only be available after completion of 12 months of service by the employee. The SL and EL will be fixed by the organization and will vary from organization to organization.

With regards,
L. Kumar

Dear all,

I have recently joined a new company where there are no specific policies in place for taking leave. They have mentioned to follow the standard procedure. How should I go about requesting and categorizing my leaves? Are Casual Leave (CL) and Sick Leave (SL) included in Earned Leave (EL), or should they be treated separately?

Regards,
Sharan

Dear All,

The following leaves are mandatory:

1. 4 National Holidays (which everyone is aware of)
2. 6 local holidays (as per the government)

In addition, the top IT guys have the following leaves:

1. Earned Leave - EL - 15 days
2. Sick Leave - SL - 6 days
3. Maternity Leave - ML - As per the act
4. Wedding Leave - WL - 3 days
5. Paternity Leave - PL - 3 days
6. Adoption Leave - AL - 2 weeks
7. Bereavement Leave - BL - 3 days
8. Special Leave - SPL - 1 day.

Out of all the above, only EL can be carried forward. There might be slight changes according to the policies.

Regards,
Dasa

Dear Dasa,

Thanks, but still I have some doubts regarding CL & SL. On what basis do we calculate it to give? For example, some companies provide 7 days of SL and 7 days of CL. Could you please clarify this?

Regards,
Sharan

Hi Rohini,

I have to prepare a leave policy for my organization. Apart from Indian holidays, how many days of leave can be given to employees and under which category? Please share your views.

Thanks,
Rohini

Dear All,

All these comments are 3 to 4 years old. Can anybody tell me if the leave policy is still the same or if there have been any amendments or changes made to it?

Regards,
Shradha

I would like to know what the rule is for forwarding privileged leaves. I want to understand how many leaves can be carried forward to the next year as privileged leaves.

With Regards,
Ms. Dhanya

Hi,

I am working in a small company where we have 20 employees at the moment. Our leave policy includes CL (6) and PL (12) leave for employees as we operate as a 5-day working company. All leaves are calculated on a pro-rata basis. CL starts from the date of joining itself, and PL starts after confirmation, i.e., after 3 months.

My question is: if someone takes sick leave, can they apply for CL since we do not have a clause for "SL"?

Regards,
Nidhi