Understanding PL Eligibility: Do Employees with Less Than 240 Days Get Leave?

It is not necessary to provide PL (as per the Factory Act) to employees who have worked for less than 240 days in the previous calendar year.

Regards,
NIRANJAN T

Hi,

As per subsection (2) of Section 79 of the Factory Act, 1948, if an employee joins the organization after the first of January, then he is eligible to get PL if he has worked for two-thirds of the total number of days in the remainder of the calendar year.

Abhishek

Hi Niranjan,

According to the Factories Act, any employee who has worked for 20 days is eligible for 1 PL. So, the calculation is made accordingly. It is not mentioned that employees who have worked less than 240 days will not be eligible. Ultimately, it depends on the company's policy.

Regards,

Komal Singh

Hi all,

If an employee joins a factory, any leave, either PL or SL, is not credited in the year he joins. The leave taken during the year by an employee is considered as Loss of Pay (LOP). Only in the next year, the accumulated leave is calculated proportionately, for example, 1 day for every 20 days worked and 240 days, and so on. Therefore, we need not worry about providing the number of days of leave eligibility in the first year or the year an employee joins the company. Only in the next year (if an employee is in service), his/her leave will be credited to his leave account. If an employee quits in the second year of service, then the accumulated leave should be given to the employee through settlement.

Regards,
Devarajan

Hey guys,

Please help me. Does this apply to a software company as well? What are the laws that an IT company should comply with? Does it matter which state you are in?

Looking forward to hearing from all of you.

Regards,
Alex

Hi,

Thank you for your reply. I have examples of employees who have been working with us for the past 15 years and they avail of PL as per the Factory Act every year. However, some of these employees did not complete 240 working days in the previous calendar year due to various reasons. Are they entitled to PL?

Regards,
NIRANJAN THAKUR

Hi Niranjan,

If the employees have not completed 240 days, are they continuing the job or have they left their service? If they have left their job, then you have to calculate proportionately the leave accumulated during the period and pay through settlement (i.e., 1 day for every 20 days worked). On the other hand, if they continue, then credit the PL in the next calendar year, not in the current year.

Regards,
Devarajan

How to calculate these 240 days? Does this include Casual Leaves (if any), SLs, ELs taken by the employee?

Hi Kumar,

Regarding the calculation of 240 days, I think there is no such calculation that exists. You may refer to an act called the "Conferment of Permanent Status Act," where it states that an employee will attain permanent status only if they have completed continuous service for not less than 240 days in a calendar year.

The formula for calculating leave is one day for every 20 days worked. The further breakdown of leave into Sick Leave (SL) and Paid Leave (PL) varies from one factory to another and is not related to the 240-day requirement.

Therefore, before 240 days, you can employ an employee as a trainee and close his/her period. When closing, the accumulated leave can be settled.

If you have any further doubts, feel free to ask.

Regards,
Devarajan

Mr. Devarajan,

Thank you for the email. However, the confusion still exists. Do 240 days include ELs, CLs, SLs taken by the employee? For example, if Mr. X's actual number of days worked in the previous year is 230 days, and he took 12 CLs, 10 ELs, and 7 Sick Leaves in the previous year, should we consider the actual number of 230 days OR 230 + 12 (CLs) + 10 (ELs) + 7 (SLs) = 259 days?

Please advise.

Thank you.

Mr. Kumar,

If an employee takes any unauthorized leave, then do not include it in the 240 days. Otherwise, include all authorized leave (CL, SL), any national holidays, and festival holidays.

Regards,
Devarajan

Hi,

No individual will be eligible for "EL" in the year he joins an organization. These are the points to keep in mind while calculating EL/PL:

- A person should be physically present for 240 days. Physical presence excludes all kinds of leaves and weekly off.
- If a person joins in the middle of the calendar year, he should have 75% of physical presence attendance.

Note: The rule of 1 EL for every 20 days is a shortcut for easy calculation.

Dear friends, if there are any other points to add, kindly let me know so that I can update myself.

Sinchana

Hi,

Sorry, friends.

I don't agree with such calculations.

240 days of working include all working days, holidays/national holidays, and all leaves for which salary is paid to the employee. It excludes leave without pay (LOP).

According to the Act:

If a worker is discharged, dismissed from service, quits their employment, is superannuated, or dies while in service during the calendar year, they, their heir, or nominee shall be entitled to wages in lieu of the quantum of leave to which they were entitled immediately before their discharge, dismissal, quitting of employment, superannuation, or death. This should be calculated at the rates specified in sub-section (1), even if they had not worked for the entire period specified in sub-section (1) or sub-section (2) making them eligible to avail of such leave. Payment shall be made within the second working day from the date of discharge, dismissal, or quitting.

Hope this information helps you.

Regards,

Komal Singh

Hi Sinchana,

I think you are confused. You are wrong, and that method does not apply for the calculation of EL. Please go through my previous definition regarding 240 days leave, EL, and PL details, and revert back to me.

Regards,
Devarajan

Hi Devarajan,

Thank you for your reply. After reading your email, I cross-checked with my seniors, including my ex-boss (at least 5 members). I was informed that for calculation purposes, physical presence of 240 days (January to December) is a requirement. This count does not include any earned leave (EL), casual leave (CL), sick leave (SL), or other leaves.

When calculating EL, if a person falls short of 240 days (considering January to December), then the number of EL days consumed in the previous year can be taken into account.

Regards,
Sinchina