How Do Companies Handle Paid Leave and Encashment for New Employees?

Dear All,

Please let me know the Leave Rules/Policy followed by most organizations. If an employee is confirmed and has not completed a period of one year in the organization, what should be done with his/her paid leaves, i.e., CL? When should the paid leaves be encashed by the company?

Looking forward to a positive response from your side.

Thanks & regards,
Nikita

Dear Nikita,

First, examine which of the enactments are applicable to your organization regarding different kinds of leaves and then go through the leave provisions in those Acts for your query.

With Regards,

R.N.Khola

Dear Nikita,

Greetings for the day.

I advise you to go through the certified standing order of the company, where you will find the leave rules. In our company, employees are provided with 7 CL (Casual Leave), 7 SL (Sick Leave), and 15 EL (Earned Leave) in a calendar year. Regarding sick leave, only those employees who are not covered under ESIC should be able to enjoy the same.

To avail the facility of EL, an employee should work for 240 days. Every 20 working days, one leave will be credited to the employee's account. If an employee leaves the job without completing the 240 days, leave encashment will be paid for the earned leave accumulated in the account. Encashment is only applicable to EL and not CL/SL. The formula will be:

Basic salary/26 * number of EL.

I hope this information is sufficient to clear all confusion.

Thanks & Regards,

Sumit Kumar Saxena
9899669071, 0120-4131277

Thanks, Sumit. I have another related question. What about loss of pay? I mean, what is the calculation used? I assume the number of days on LOP * basic salary/28. Please correct me if I am wrong.

Dear senior,

I have one doubt regarding the leave rules. Are there any rules for EL's encashment? If not, are EL's carried forward or not?

There is encashment of EL during retrenchment, resignation, termination, or retirement, and it should also be carried forward when a person continues in employment.

Thanks & regards,

Sumit Kumar Saxena