Confused About Leave Encashment Rules? Seeking Advice on Best Practices

Dear HR Guru,

Please help me out. In our company, we have made a policy for leave in the following manner:
- PL: 20 days per annum
- ML: 15 days per annum

In addition, I have suggested that every employee should be eligible for 2 days of earned leave, which we should credit as LEAVE ENCASHMENT. So, we paid 24 days as leave encashment. However, after some time, our new account manager said that this is incorrect, and we can only encash the remaining PL that has not been used by the employee.

Please suggest to me what is the right approach.

Regards,
Rajendra Singh
HR Manager
9829087809

Hello Rajendra,

Your question is quite confusing. If your company is already giving 20 PL per annum, I am not sure what you meant by 2 days earned leave. Did you suggest giving an additional 2 days of earned leave per month? If that is the case, then your account manager is right. PL or paid leave is the same as earned leave, so you do not need to distinguish between the two. As for encashment, only paid leaves can be encashed, not casual or medical leaves. So, whether you pay them for unused PL or earned leave, it is one and the same.

Regards, Gaurang