Understanding EL Calculation: Can New Employees Earn Leave from Day One?

Dear All,

Please help me in understanding the EL calculation. As I know, the EL calculation formula is:

15 x number of clear months + 2.5 x number of remaining days in the month
6 ... total number of days in the month

If a person is joining on 4th May 2009, his EL balance will work out to be 5 days (till 30.06.2009).

My query here is: can a new employee be credited with ELs on the first day of joining, or is there some minimum days attendance criteria?

Please advise me on the above issue.

Best regards,
Priyanka

Hi Priyanka,

Please advise. I have gone through the citeHR website and searched for the required information, but could not find it.

In our company, we receive 30 days of Earned Leave (EL) - 15 days on 1st January and 15 days on 1st July, 8 days of Casual Leave (CL), and 10 days of medical leave. This implies that we provide EL on an advance basis. If a person joined our company on 01.05.2009, attended only for 5 days, and then took 4 days of leave, should they be debited with ELs/CLs or be put on leave without pay?

I am looking forward to hearing your valuable insights.

Best regards,
Priyanka

Hi,

As the name suggests, the employee has to 'earn' leave. The 15 days of earned leave should be credited for the preceding 6 months. You can credit Medical leave and CL in advance. In this case, either you can grant CL or LOP.

Regards,
Raghuram

Hi,

At the time of joining, none of the employees can be credited with EL. Only after completion of one year, employees are eligible for EL. Until then, no EL will be sanctioned.

Hi,

EL stands for earned leave, and therefore, it cannot be given in advance. On the other hand, CL (Casual Leave) or SL (Sick Leave) can be given in advance. For instance, in your situation, if 15 days of leave are allotted for the first 6 months and the remaining for the next 6 months, these 15 days should only be credited to an employee after completing 6 months.

If an employee joins on 4/5/2009, then on 1st July, his account will be credited with 5 days of leave for 2 months (2.5+2.5). It's great to be in a company that offers many days of leave in a year!

Typically, 15 days are given for a year and are credited once the employee completes one year. CL and sick leave or medical leave can be used during the first year.

Giri

I would like to know how to calculate EL for an employee. If a person is doing their duties for the full month, then how many leaves should be allotted? I think the total number of working days divided by 20, i.e., 1.5, is eligible for that employee. Here, I consider the total number of days as 30, including rest days. So kindly tell me if it is right or wrong. I want to know if it should be calculated based on 30 days or excluding rest days.

Regards.

Leave Credit and Eligibility Under State Law

None of the leaves can be given in advance. There is no credit pattern, only debit. Earn a day (EL) for every 30 days worked in that month. Only if you work for 30 days a month, you are eligible for 1 CL & 1 SL (TN Shop & Estbl. Act). Your payroll software credits CL/SL on the last day of the running month and adjusts according to the leave register module that you key in for salary processing.

Imagine that you credit 12 CL/SL/EL on the date of joining. What if the employee exhausts all and escapes within a month? At the maximum, you can stop salary provided he had worked for eligible days... else what will you do?

A company has to strictly follow what is prescribed in the state law, and the company policy has nothing to do with the State Shop & Establishment Act. A company cannot decide on the leave eligibility or approval or reduce the CL/SL quota to an employee based on probation/permanent/temp. It has to go by the books.

Regards, Chandru