How Should I Categorize and Manage Our 21 All-Purpose Leaves Without Encashment?

Hi all, I am working with a software company as an HR. In our organization, we have 21 leaves, which are all-purpose leaves. Now, I want to categorize these leaves as CL, SL, EL, and we have the policy of leave encashment. We want to remove the policy of leave encashment. Can anyone suggest how these 21 leaves have to be categorized? Instead of encashment, I want to have carry forward. In that case, how many leaves can be carried forward?

Yes, I have researched, but it's full of confusion. There are different views from different people. Most of them suggested 12 CL, 12 SL, and 10 PL. However, I don't want to increase our leaves to more than 21 days. So, I want to know how different leaves can be divided among these 21 days.

There are two types of leave policies followed by IT companies that I am aware of.

Type 1

The conventional style consists of 21 earned leaves (EL), 6 casual leaves (CL), and 6 sick leaves (SL). In some organizations, the 6 CL and 6 SL are combined to make 12 CL or 12 SL. By the year-end, the EL and SL are carried forward, and the CL lapses. You can accumulate a maximum of 42 EL, which can then be encashed. SL cannot be encashed. When taking an EL, any holidays or weekends falling in between are added to it; however, in the case of CL and SL, this does not apply. CL cannot be combined with any other type of leave. This policy includes 90 days of maternity leave and 3 days of paternity leave. Additionally, there are 10 declared holidays, and some organizations also offer 5 restricted holidays (RH).

Type 2

This policy is very straightforward, with no CL, SL, or EL, but rather 30 business days of holidays per year. This means you can take 30 working days off in a year, either all at once or in intervals. Holidays or weekends that fall in between are not included. At the year-end, 15 leaves lapse, and 15 are carried forward. This policy is simple to calculate, administer, and understand. Maternity and paternity leaves remain the same, as do the 10 declared holidays. This information may help you decide on the distribution of leaves. By the way, the total leaves applicable in your organization may be fewer if you choose to differentiate them. The number of leaves depends on the location and the minimum leaves specified under the shop act.

Hope this helps.

In order to determine the accurate number of minimum leaves that can be granted under CL, SL, and EL/PL, you need to check the act under which your organization is registered in a particular state. If your organization is registered under the Shops and Establishment Act, then the act applicable to your state shall specify the minimum number of CL, EL, and PL's that can be granted along with the guidelines for encashment.

Regards,
Rahul Chhabra

Dear Pranavi, Mr. Rahul Chahabra is absolutely right. Your company's leave policy has to be in consonance with the provisions of the Act regulating working conditions in your establishment. As your establishment is a software company, the Shops and Establishments Act in force in your state is applicable. However, your company can offer its employees more than what is specified under the Shops and Establishments Act.

With regards,