Is Our Salary Deduction for Unpaid Leave Fair? Seeking Urgent Advice

I need your advice on the following query:

In our company, the rule for leave without pay is to deduct the salary per working day. For example, if the salary of an employee is Rs 26,000 per month and the number of working days in a month is 26 - if the employee takes leave without pay for 3 days, 3 x 26,000/26 = 3,000 would be deducted. Thus, Sundays and other holidays are excluded from both the numerator and denominator.

Is this practice correct?

Thanks and awaiting your response urgently.

Tarun

Above practice is not correct.

Firstly, an employer should not calculate monthly salary based on the number of working days for salaried employment in any company or organization.

The standard calculation for all organizations is as follows:

Monthly Gross Salary (MGS) = Annual Gross Salary (AGS) / 12

Monthly gross salary = (MGS / Number of days in that month) * (Number of days in that month - Number of LWP (leave without pay))

For a month with 31 days and 2 LWP (Leave without pay): (MGS / 31) * (31 - 2) = 29

For a month with 30 days and 2 LWP (Leave without pay): (MGS / 30) * (30 - 2) = 28

For a month with 28 days and 2 LWP (Leave without pay): (MGS / 28) * (28 - 2) = 26

Also, "Leave with Pay" should be kept aside while calculating monthly salaries. This adjustment should be made only when an employee goes on vacation after informing the respective employer officially. For example, if an employee has 5 "Leave with pay" and goes on vacation for 10 days, the employer can adjust the earned 5 leaves here, i.e., 10 - 5 = 5 days of leave.

Salary Calculation Practices

Above practice is not correct. Firstly, an employer should not calculate monthly salary based on the number of working days for salaried employment in any company or organization. The standard calculation for all organizations is as follows:

Monthly Gross Salary (MGS) = Annual Gross Salary (AGS) / 12

Monthly gross salary = (MGS / Number of days in that month) * (Number of days in that month - Number of LWP (leave without pay))

For a month with 31 days and 2 LWP (Leave without pay):
(MGS / 31) * (31 - 2) = 29

For a month with 30 days and 2 LWP (Leave without pay):
(MGS / 30) * (30 - 2) = 28

For a month with 28 days and 2 LWP (Leave without pay):
(MGS / 28) * (28 - 2) = 26

Additionally, "Leave with Pay" should be set aside when calculating monthly salaries. This should only be adjusted when an employee officially informs the respective employer before going on vacation. For example, if an employee has 5 "Leave with pay" and goes on vacation for 10 days, the employer can adjust the earned 5 leaves as follows: 10 - 5 = 5 days of leave.

If an employee has taken a leave for the whole month, would they be paid for calendar holidays and Saturdays & Sundays (having not attended the office at all)?

Regards,
Riya
Asst. Manager-HR

Leave Deduction Policy Inquiry

Can anybody tell me how leave deduction is applicable in a case where, as per company policy, 18 leaves are allowed in a year? If an employee has not taken leave in the last 2 months, for the current month, he has 2 leaves. Will his last 2 months' remaining leaves be adjusted with this month's leaves?

Please reply.

Regards,
Shefali

I want to know if I have taken 6 days holiday in a month, but leaves are taken 2 days in 1 week, how many days' salary should be deducted.

Hi All,

I was looking for 2 clarifications.

Firstly, Sick leave - 0, Earned Leave - 0 When an employee takes leave without pay on Friday and Monday, should we consider it as 4 days of leave, from Friday till Monday, or only Friday and Monday, which is 2 days?

Secondly, can anyone share a policy on Leave without pay or an unpaid leave policy? It might help others in the forum.

Regards, Mohanraj D M +91-9663399668

It is a common practice for companies to deduct the weekend from the payable salary if it falls between a leave period. In my company, there is a rule that employees will not receive payment for the weekend if they are absent or on leave for any two days in the preceding week.

There are still disagreements regarding the scenario where a person is absent for just one day on either side of the weekend. However, in your case, it appears clear that four days' worth of salary will likely be deducted.