Is There a Standard for Allotting Paid Leaves, or Does It Vary by Company?

Hi all,

This is the first time I am posting a query on CiteHR. I must say it is of great help. Thanks to all of you for your contribution.

I have the following query: Is it mandatory to allot a particular number of PLs for a financial year, or does it depend from company to company? We have 40 leaves to be allotted. I am planning to allot 24 as PL, 7 as CL, and 9 as SL. Am I right? Please comment. Thanks.

Hi Seema,

As per the Factories Act, Chapter VIII of Annual Leave with Wages under Section 79, it is stated that every employee who has worked for a period of 240 days or more in a factory during the calendar year shall be allowed, during the subsequent calendar year, leave with wages for a number of days calculated at the rate of one day for every twenty days of work performed by him during the previous calendar year.

According to this, you should provide a minimum of 19 days of paid leave (PL).

Thanks,
Vijay

Hi Seema,

Firstly, one needs to know if your query is for workers or for staff. Since you say you have 40 days to allot, I presume it is for the staff.

If it is for staff, there are no particular rules governing this. It is purely a decision of the management. Your distribution seems okay:

- 24 days PL - Normally, PL is accumulatable and encashable. Again, the limit depends on the management.
- 9 days CL - This is not encashable and cannot be accumulated, since this being Casual Leave, it is meant for a casual occurrence only and lapses at the end of the calendar year.
- 7 days SL - This is meant for sickness and hence can be availed only when one is sick. This is also accumulatable but not encashable.

However, if management wants the staff to benefit, then all the 40 days can be PL, which can be utilized for any occasion - planned leave, vacation, casual occurrence, sickness, etc. As I have said, it is purely the prerogative of the management.

If it is for workers, then one needs to adhere to factory rules as brought out by Vijay.

Calculation:

Number of days in a year = 365

Less Sundays = 52

Less National and Festival Holidays, say 10

Balance working days = 303

Earned Leave at 1 day for every 20 days worked = 15 days

Earned leave is accumulatable up to 30 days only. Hence, it has to be availed or it will lapse.

Casual leave can be given to workers generally at 1 day per month, which means 12 days in a year.

Sick leave is generally looked after by the ESI. However, the management may give sick leave for short sicknesses that do not warrant treatment in ESI.

For any further clarifications for leave or any other matters related to HR, IR, Health, Environment, Safety, Welfare, please feel free to contact me at my direct mail ID - grajaram50@rediffmail.com or grajaram50@yahoo.com.

Thanks and best wishes,

Col Rajaram

HR Consultant