Employee Leave Entitlement: Do You Have to Encash Pending PL When Someone Resigns?

Employee Entitlement to PL

When is an employee entitled to PL? If an employee resigns, is it necessary to encash pending PL? Is that mandatory?

It is mandatory for the management to encash the pending PL when any employee resigns, along with the other dues of the employee.

Regards

You can complain against the management to the Labour Inspector and Labour Authorities for not paying PL encashment.
Regards

Yes, it's mandatory to complete the final settlement by paying the employee for his/her earned leaves; otherwise, the employee has all rights to complain against the management.

Warm Regards, Indira Somala

Understanding Privilege Leave (PL) or Earned Leave (EL)

The term Privilege Leave or Earned Leave is self-explanatory. However, EL/PL is encashed based on the basic salary.

Thank you.

Please let us know which law, including section/rule, states that we are to encash earned leaves based on only basic wages.

Regards,
R N KHOLA

I am not an expert on rules, but it is prevalent in many organizations, as far as I know and have experienced. If the rule book states something different, I am not aware.

Pon

Please refer to the Andhra Pradesh Shops and Establishments Act, 1988. It's clearly mentioned.

Regards,
Indira

Please refer to the Factory Act of 1948 or the Shop Establishment Act of 1988 and also refer to your appointment letter for details on leave encashment. If you have someone reporting to you, then your complaint will go to the Civil Court, not the Labour Court.

It's mandatory for the management to encash the pending PL when any employee exits the company.

Regards,
Geetha
HR Executive

Encashment of PL

Encashment of PL is mandatory, and it should be encashed based on the gross salary and paid up to 45 leaves. The calculation formula should be salary/26 multiplied by the number of PL.

Thanks & regards,

[Phone Number Removed For Privacy Reasons]

EL's / PL's - How Will We Calculate?

Please tell me the procedure for the calculation of EL's / PL's.

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Please tell me if any employer can encash PL based on basic salary (Basic salary/30*number of PL). Is this practice incorrect? Additionally, can an employer deduct more than 15 PL?

Yes, it is a wrong practice. Encashment is always calculated based on 26 instead of 30, and the salary should be gross, not basic. Simply put, if somebody is absent and their salary is deducted, you deduct only the basic or basic + all allowances.

Thanks & regards,
Sumit

PL encashment is not part of CTC; it is a sort of benefit. When you are absent, the deductions will be based on the gross salary, whereas, while calculating a benefit, it is generally based on the basic salary. Following your logic to deduct only the basic salary during absence, if you are absent for a whole month, assuming no accumulated leaves are available in your account, would you expect the salary excluding basic?

Regards,
Pon