New Employee Earned Leaves: How Do You Calculate Them for the First Time?

Hi Guys! Kindly help me out on how to calculate Earned Leaves for the first time in the case of a newly confirmed employee. In our organization, employees are normally eligible for ELs after completing one year of confirmation. For example, Mr. X, confirmed on 1st April 2011, is eligible for ELs after 1st April 2012. How many ELs would he be eligible for in 2012 and how is it calculated? The leave period is January-December of every year.

Thanks in advance,

Smith

Eligibility for Earned Leave

Eligibility for Earned Leave is defined under the Factory Act. There is no relevance to whether the employee has been confirmed or not. The calculation is based on the date of joining, not the date of confirmation. For example, if an employee joins in September 2011 and the company policy allows for 24 Earned Leaves per annum, they will be eligible to avail of leave in September 2012. The calculation would be from September 2011 to December 2011 at 2 leaves per month, which totals 8 leaves that can be availed from September 2012 to December 2012. Other leaves like Casual Leave (CL) or Sick Leave (SL) shall be as per the company policy.

Regards,
Mangesh Wakodkar
Aurangabad

The earned leave varies from company to company. As per the ID Act, all workers must be given 1 day for every 20 completed days worked. This totals 313 working days per year, allowing for 15 or 16 days of leave to be granted. Some companies may provide up to 30 days of Earned Leave based on their company's leave policy, which can vary depending on the attendance of the previous year.

The calculation for Earned Leave starts after one year from the date of joining and not from the date of confirmation.

I hope this information is helpful. Let me know if you need any further assistance.

Best regards,

Earned Leave Rule

As per the Factory Act, the earned leave calculation is 20 working days (excluding holidays, weekly offs, or leaves) = 1 EL. Suppose an employee joins in July 2012; they are eligible to avail of the EL from January 2013 from their EL account (i.e., the July to December 2012 period because EL calculation starts from the Date of Joining).

Example Calculation

Basic Salary: Rs. 7000/- and EL = 4
Calculation of EL = Basic Salary/26 * No. of Leaves
= 7000/26 * 4
= Rs. 1077/-

Thank & regards!

Kiran Arya

As per the Factory Act 1948, Section 79, any individual will be eligible for the same after the completion of 240 days of service. It will be calculated on the basis of one leave for every 20 days of actual working (actual working means excluding Sundays and holidays). Thus, this comes to around 15-16 days. This rule is applicable throughout India and for industries established under the Factory Act, whether manufacturing or service-oriented. If any company provides 30 days of annual leave, it means they are misinterpreting the law, which also mandates 7 days as a minimum for Casual Leave. If ESI is not applicable, then Sick Leave should not be less than 7 days in a calendar year. Additionally, Casual Leave and Sick Leave lapse at the end of the calendar year, whereas Earned Leave is accumulated for the next year.

I hope everything is clear to you.

Regards,
Rajender Singh
Manager HR

Well replied. However, I have some queries, please let me know:

1. As per the new amendment passed by the Karnataka Government recently, for EL calculation purposes, a working day includes actual working days, weekly offs, festival holidays, and other interrupted offs.

2. I would like to know which act or amendment states that CL and SL should be within 7 days.

Please advise me.

Regards,
Ravi Kumar. K
[Phone Number Removed For Privacy Reasons]
[Email Removed For Privacy Reasons]

Total number of days in a year = 365 days. Number of Sundays = 52 days. Balance working days = 313 in a year. If you calculate for 1 month, you must divide 313 days by 12 months. So, 313/12 = 26.08 days. Let's round it to 26 days. Therefore, we are calculating for 26 days and not for 30 or 31 days. I hope your doubt is cleared.

Hello there! Kindly help me out with this. If EL is calculated based on Basic Salary, should we also calculate LWP (Leave Without Pay) on the basic salary, or is there another method to calculate it?

Rajeev Bhansali