Understanding Sick and Privilege Leave: How Do You Calculate Accrual and Settlement?

Hi,

How do I calculate sick leave and privilege leave? How many days of SL/PL does an employee accrue? Also, how should I calculate the leave balance for settlement when an employee resigns from the job?

Best Regards

Hi,

The number of SL and PL entitlement varies from company to company. Generally, companies keep it as SL - 7 days and PL - 21 days. In case the employee resigns, you can calculate the entitlement on a pro-rata basis, i.e., for the number of months the employee has worked.

Generally, PL entitlement starts only when an employee completes his probation period successfully and receives a written confirmation letter from the employer. If the employee leaves before that, he is not entitled to any PL. If the employee leaves after confirmation, then it is on a pro-rata basis for PL encashment.

Regards,
Surya

Hi,

The number of leaves differs from company to company. Actually, it depends on the company's policy.

In most of the companies, the structure is like this:
SL - 8 Days
CL - 8 Days
PL - 16 Days

If one person resigns, then their earned leave is calculated on a pro-rata basis, i.e., from the date of joining to the date of resignation.

Regards,
Amit Seth

Dear Mr. Vairamuthu Sasi,

I believe your query may have been resolved by now. However, for the benefit of other members seeking clarification, it is important to note that there are three main types of leaves available to employees, excluding maternity leave, namely EL or PL, CL, and SL. These leaves are provided to employees/workers in accordance with various labor laws. PL is regulated by either the Factories Act, 1948, or the State Shops and Commercial Establishment Act, while SL is granted under the provisions of the ESI Act, 1948 (if applicable), as well as the State National and Festival Holidays and Casual and Sick Leaves Act, and Shop Act.

It is essential to determine which specific labor law is applicable to the relevant unit or industrial establishment and then refer to the corresponding rules for the allocation of different types of leaves. The number of leaves and the procedures for granting them are outlined in these acts and rules. By familiarizing yourself with these regulations, you can establish a leave policy that complies with the minimum statutory requirements.

This information is shared for the benefit of new HR personnel.

R.N. Khola
09810405361
Skylark Associates, Gurgaon (Haryana)