Navigating Leave Policy Confusion: How to Handle PL Encashment and Accumulation Issues?

I would really appreciate it if you could provide me with any help concerning my query, mentioned below:

Company Leave Policy Under the Shops and Establishment Act

The company is registered under the Shops and Establishment Act. According to this act, a minimum of 15 days of Paid Leave (PL) is to be given annually and can be accumulated for up to 3 years.

I am tasked with preparing the Full and Final (F&F) settlement for resigned employees. The company does not have a specific leave policy, although it has been mentioned in the Terms and Conditions (T&C) of employees that they would be given 30 days of PL annually. The duration up to which it can be accumulated is not specified.

It also appears that the company does not have any standing orders. My senior informed me that the company does not allow PL accumulation beyond one year. Previously, they used to encash accumulated PLs annually, but they have now discontinued that practice. Employees have been verbally instructed to utilize all PLs by the end of the year, as the company will not encash them.

Additionally, please note that the company has not maintained leave account records for employees. Consequently, it has been challenging to determine the maximum number of days of PL that can be provided to resigned employees.

Please help!

Thank you.

Clarification on Paid Leave Policy

Not 15 days per year, but 12 days per year. It is not 3 years; it is up to 36 days, after which it will be saturated.

Not 12 days, but it should be 15 days in a year, and encashment should be done up to 30 PL. After three years, if the balance is above 30 days, the leave should be lapsed, and no encashment should be done.

Regards,
Sumit

First of all, it is mandatory to maintain leave records of the employees. You can download a leave tracker from Cite HR. You can go through leave-related topics to get more clarity. Leaves can be categorized into CL's, SL's, and PL's. CL's and SL's will be lapsed at the end of each year, whereas PL's will be carried forward to the next year. PL's can be encashed and carried forward for up to three years before lapsing automatically. However, this depends on your company's leave policy.

Thanks & Regards,

Srilakshmi Korukonda