Just a point for you to note:
LOP or 'Loss Of Pay' has reference to 2 situations:-
1) When an existing employee takes a long leave eg: An employee may go on maternity leave and could cross the maternity leave limit. In these cases you need to have a clear policy that states that over and above the approved leave or the limit under a category of leave(such as Maternity Leave) the LOP will be based either on basic or on the full gross.
2) When there is shortfall in notice period,typically, the shortlfall will be adjusted in the FFS(Full and Final Settlement).In real terms, this is not LOP.Its technically called a shortfall in notice period that maybe adjusted.
Please note many companies make a an unfair mistake when it comes to adjustment of the shortfall and LOP,namely, they calculate these on the gross. However when it comes to leave encashment, they calculate it on basic. This is seen as an unfair practice towards employees.Please be aware of it an adopt a balanced view and a best practice.
Best wishes.
SK