How Should IT Companies Handle Leave Calculations for Weekends and Long Breaks?

Dear Seniors, I am Asmita, working with an IT company in Pune. We are standardizing our processes, and I have queries regarding leave calculations.

First Scenario: If an employee takes leave on Friday, and Saturday & Sunday are weekly off, and then takes leave again on Monday, should we count Saturday & Sunday as leaves?

Second Scenario: If an employee goes on continuous 10 days of leave, should we also count Saturday & Sunday as part of their leave, or only consider the working days?

I would appreciate your guidance on the current trend for leave calculation in IT companies.

Thanks in advance.

The leave calculation is purely based on your company's leave policy. Some companies have a policy to count Saturday and Sunday as leave if it is going to be a privileged leave. Others do not consider Saturday and Sunday for leave calculation. To streamline this, you should have a clear Leave Policy in your company.

Regards,
Priya

Every company has its own leave policy, but in general, if a person takes leave for Friday, and Saturday & Sunday are weekly offs, and they'll join their duty on Monday, then Saturday & Sunday will not count as leave. If they do not come on Monday as well, then Saturday and Sunday will count as leave.

Continuous 10 Days Leave

Any weekly off will count as leave.

Thanks

Thanks, Priya, but to streamline our policy and define it clearly, I need to know what other companies are doing. Let me know how you calculate this in your company in such a scenario?

Dear Asmita, as a standard process, you have to consider the weekly off as leave if the employee is taking preceding and succeeding leaves to the weekly off. It's normally termed as 'SANDWICH LEAVES'. You can include/frame the policy with respect to this.

Regards

Dear Asmita,

As everyone specifically mentioned, the leave policy is an internal matter for every organization. However, an IT company falls under the Shop & Establishment Act. Accordingly, sandwich leave should be counted as 4 days off, which include Friday, Saturday, Sunday, and Monday. In an IT company, there are Compensatory Offs, so Saturday and Sunday are excluded.

Mostly in IT organizations, there is 1.6 days of Paid Leave for every completed month of service and 8 days of sick leave, i.e., 2 days per quarter.

As an HR professional, you should always frame policies that are employee-friendly while considering the different Acts.

Thanks and warm regards,

Pranab Kumar
[Email Removed For Privacy Reasons]

I've noticed that on this forum, there are a lot of queries about leave and salary calculations. Here is a piece of advice that might hold all HR professionals in good stead. Try to study the legal guidelines. These may be available in the Shop and Establishment format or the Industrial Labour Act format. Do a detailed study of the work environment that you are currently operating in. Draft your leave policies based on the work environment but ensure that you have covered all labor law and legal requirements.

Like they say, there are no free lunches... you need to put in the hard yards!

There is no standard rule for considering Sat & Sun or not. It's all based on the HR and management decision, taking the environment and employees into consideration. I have seen some companies considering Sat & Sun as leaves, some are not. Some give fewer PLs and do not consider Sat & Sun as leaves, while some give more PLs and consider Sat & Sun as leaves.

Dear Seniors,

Urgent help is required on the computation of Paid/Earned leave encashment. Please refer to Sec 80 of the Factories Act, which states that wages during the leave period should be provided. It includes that a worker shall be entitled to wages at a rate equal to the daily average of his full-time earnings for the days. Kindly advise if wages mean as per Sec 2h[(vi) & 2h of the Minimum Wages Act is the same, or if wage as described in the EPF Act Sec 2b applies. Kindly advise on which wage the employer is liable to pay for encashment.

Regards,
Pankaj

As you have requested, please find below the terms in my company's leave policy:

1) Casual Leaves, 7 days in a year: Sandwich leave applies (if an employee takes leave on Friday and the subsequent Monday, then even Saturday and Sunday are counted as leave taken, but it does not apply if the employee avails leave on Friday and comes to work on Monday).

2) Sick Leave, 7 days in a year: Only working days are calculated for leave (no weekly offs/holidays in between the leaves are counted).

3) Privileged Leaves, 21 days in a year: All weekly offs and holidays during the leave period are counted as leave.

However, in my previous organization, we had altogether 30 days of annual leaves in a year (there was no Casual/Sick/Privileged leave split), and only working days were counted.

Hope that helps. The choice is yours :)

Regards,
Priya

Neither will you find this answer in the Factories Act nor in the Shop & Establishment Act. The logic to be used here is based on the employee's payment methodology. If the employee is appointed on a monthly salary basis, weekly offs are indirectly paid holidays in the month. So, if the employee is absent on both days preceding and following a paid holiday, the salary is to be calculated as if he/she was absent for that entire period. For example, if the company's weekly off is Sunday and the employee is absent on Saturday and Monday, it is to be calculated as if he was absent for 3 days and not 2 days.

I hope this is clear now.

Regards,
Mehul Joshi
Consultant & Designated Partner
Serve HR Corporate Services LLP

Leave Calculation Policy: Casual Leave vs. Earned Leave

If an employee applies for Casual Leave on Friday and Monday, you do not need to consider the weekly off days as leave. However, if any weekly off days fall between earned leave or sick leave, they are included in the leave period. This is a commonly followed policy in most organizations.

Minimum Leave Days Requirement

Regarding the number of leave days, you have to provide the minimum as required under the rules. It is left to individual organizations to provide anything more than the statutory requirements.

Mutuality of Interest in Employer-Employee Relationships

"Mutuality of interest" is the punchline in every employer-employee relationship. A sound, just, and fair leave policy is the aim of all HR professionals. The balance has to be struck between "malafide intentions should not be benefited" versus "bona fide intentions should not be punished." Accordingly, the policy should be designed.

I observe that the normal view is that in the case of casual leave, the "sandwich" procedure is not followed, but in the case of sick and earned leave, the "sandwich" procedure is followed. I also understand that there is no law regarding this. However, one knows that the Shop & Establishment Acts of different states provide for the compulsory grant of earned leave and encashment of the same.

In such a scenario, knocking off weekly offs under the "sandwich" procedure may not be correct. A leave granted by a statute cannot be taken away by company practice/procedure. I understand that many informed companies have done away with the "sandwich" procedure. However, some factories may follow the "sandwich" procedure by incorporating the same in the Standing Order, which is statutorily recognized.

The leave policies vary from company to company as per the work environment and working strategies. Yet, legal binding is there regarding the minimum leave that is entitled to employees. As per the Factories Act, for every 20 days of working, 1 day of paid leave/earned leave is entitled. Apart from this, a weekly off is also mandatory. Therefore, when it is stated that for every 20 working days, 1 day of leave is granted, it excludes the weekly off. However, policies can be tailored to suit your firm where employees can enjoy prefixed and suffixed days which fall on either weekly off days or closed holidays. Every HR professional must ensure that leave should adhere to statutory norms and be beneficial to both employees and employers.

Thanks,
Bijay

Encashment should be done considering his gross emoluments per day. The calculation is: Wages (Basic + VDA) / 30 * number of leaves to be encashed.

In May, there are 31 days. Our weekly off is on Monday, so we calculate the salary based on 27 days. However, this month, on May 1st, we have a paid holiday. Can we consider May 1st (Sunday) as a working day? We add +1 day for May 1st to their salary.

Please tell me if 27 working days are okay or if 26 working days are okay?

Regards,
AMIT

Sorry for the late reply. If an employee has taken continuous leave along with a holiday, it means that the employee has used one working day of the company. Therefore, Sunday will not be calculated as a holiday.

Dear Amit, I understand your question. Replying to the same, have you asked anyone about Sunday leave? If not, then likewise, we'll consider 1st May as leave without pay.

Thank you.