Understanding Earned Leave Policies: Is There a Standard Limit or Does It Vary by Company?

Dear all,

Kindly guide me on the policy for Earned Leave in the organization. Is there any limit decided for the same, like 18 EL in a year? Or does it differ from company to company? Looking forward to your replies.

Thanks & regards,
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Swapna
Member CiteHR

Subject to provisions of the Factories Act/ Shops and Establishments Act/ Plantations Labour Act/ Mines Act, and certified Standing Orders of the respective organization, earned leave will differ. Therefore, if an establishment covered by the Factories Act allows EL at the rate of one day for every 20 days worked in the previous year, an organization covered under the Shops and Establishments Act (a State Act and therefore, subject to change) may have to give 12 EL every year and so on. An organization may give EL better than that provided under the basic Acts in this regard provided the same is embodied in the Standing Orders. For firms not having standing orders also, this can be applied. In short, EL policy is purely an internal matter guided by the general policy of the organization. The only thing is that EL should not be less favorable than what is provided in the Factories Act, Shops and Establishments Act, or Plantations Labour Act, as the case may be.

Regards, Madhu.T.K

Dear SJJ,

We provide 1.25 days of EL/PL per month if an employee has completed 1 year of service (they must have worked at least 240 days in that year) to be eligible for EL/PL, i.e., 15 EL's per year. Moving to the factory side, it is 1 EL/PL for every 20 days, which totals to 18 EL's.

A minimum of 240 working days is required to be eligible for EL/PL under the Shops and Establishment Act, with 1.25 days per month, resulting in 15 EL/PL after completing one year.

Under the Factories Act, it is 1 day per 20 days, leading to 18 EL/PL after completing one year.

Thank you.

Dear Madhu Sir/Sriharsha Sir,

Thank you for the information provided on PL/ELs.

I would like to know whether an employee who is still in service with the company can encash his ELs. If yes, please tell me the procedure. I am aware that PL/ELs are given to an employee at the time of his/her relieving.

For example, if an employee accumulated (didn't use) 15 days of PLs from last year and is eligible for another 15 days this year. Now, the employee wants to encash his last year's 15 days of PLs. Is he eligible to do so now? What is the procedure for this?

Kindly provide the information on this.

Thank you in advance.

Sujatha

EL/PL can be either accumulated subject to a maximum fixed (as per Factories Act it is 30) or encashed. It is not necessary that it shall be encased only at the time of leaving service but it can be done while in service also.

Regards, Madhu.T.K

Dear Sriharsha,

Under the Factories Act, one Earned Leave (EL) is granted for every 20 actual working days, with a minimum requirement of 240 days of working. The EL cannot be limited to 18 days because it is assumed that individuals will not work for 360 days straight. This is due to the provision of a minimum of 7 Casual Leave (CL) days, 53 weekly offs, and 7 public holidays which all employees are entitled to.

Thanks and regards,
Kameswarao

Swapna,

It's totally wrong information. One cannot get 18 EL in one year. In 20 working days, one gets one EL. EL is encashed if you have a balance of EL after completing the year.

Thanks,
Sukumar Sahoo

Hi,

I have an additional question regarding EL. I would like to understand the calculation logic of Saturdays and Sundays during earned leave. If someone goes on earned leave for 20 days, can we calculate weekly offs that fall in between EL, or otherwise?

Pravin

Dear Swapna,

It differs from state to state. Go through the Shop & Establishment Act of your state; you will find the minimum numbers of EL, SL, and CL as allotted by the Act. You may design your leave policy beyond the allotted days, but you can't minimize the same from the fixed days.

Regards,

Amit Seth.

Hi, this is Chaithanya, and I am working as an executive. I have a small doubt. Can anybody clarify this?

Employees shall be entitled to 45 days of Earned Leave every year.

In the case of new joiners, employees will be eligible for leave only on completion of one year of service.

"Year" shall mean the year starting on 1st Jan every year with effect from 1st Jan 2007.

Leave earned in the previous year is credited to the employee's account on 1st Jan every year. I joined on 1st May 2008. When will I become eligible to get Earned Leave?

It is fine and great that you have 45 days of earned leave (EL) every year. An employee joining on any date other than the 1st of January will be eligible for EL proportionately. For example, if your joining date is May 1st, you will be eligible for 30 days of EL, calculated based on 3.75 days for 8 months (from May to December).

Regards, Madhu T.K.