Navigating the Delhi Shop Establishment Act: Clarifying Leave Policies and Punctuality Rules for Small Teams

Dear all, I am currently working with a newly established medical company, and at present, we are a team of only five individuals. We have initiated the hiring process, and I would like to seek clarification on the Delhi Shop Establishment Act based on information I have come across on various websites:

1. How many casual and sick leaves are applicable each month?

2. Some sources mention casual or sick leave, while others mention casual and sick leave under the Delhi Shop Establishment Act. Could you please confirm which is correct and provide the relevant reference link?

3. Is sick leave fully paid for the day taken? For instance, if an employee takes a sick day in a month, will they receive their full salary for that particular day upon submission of necessary documents?

4. To my understanding, we are not covered under the ESI scheme as the minimum take-home salary for employees is 20K.

5. If an employee does not utilize sick leave or casual leave in a particular month, can it be carried forward to the next month?

6. Regarding punctuality, is it acceptable to deduct an employee's salary if they arrive five minutes late? Our office hours are from 9:30 am to 6:30 pm with a lunch break from 1:00 pm to 2:00 pm. This is something we are considering implementing for maintaining discipline.

I would greatly appreciate a prompt response.

Best regards, Deepti Chopra

Delhi Shop & Establishment Act and Leave Policies

Regarding your questions about the Delhi Shop & Establishment Act and leaves, I am attaching the Delhi Shop Act for your reference. Please refer to Page No. 14 for information on leave policies.

If your employees are earning a salary of more than 20k, ESIC is not applicable. Ensure to include point no. 6 in the appointment letter.

If you require further assistance or information, please do not hesitate to reach out.

Thank you.

Thank you so much for the reply. It was a timely solution!

Clarifications on Delhi Shop Act

Further, as I mentioned, different web links state different details regarding the Delhi Shop Act. Lastly, I would like to confirm the following points:

1. Are Sick Leave and Casual Leave both 12 days per year, meaning 12 Sick Leave days and 12 Casual Leave days, or is it a total of 12 days for both combined?

2. Since ESIC is not applicable and we are not enrolled in any medical insurance as of now, should we pay the employee their full day's salary for sick leave?

3. Is it mandatory to pay the full day's salary for sick leave?

I am eagerly waiting for your reply! Thank you for your understanding!

Regards

1. Sick Leave and Casual Leave are both 12 days in a year.
2. Your employees are not covered under ESIC. That's why you need to take a medical policy for all your employees.
3. It is mandatory to pay a full-day salary for any leave, such as SL, CL, and PL/EL.

Thank you.

Leave Entitlement and Policies

Leave entitlement is counted yearly, not monthly. As per the Act, 15 PL/EL and a minimum of 12 CL/SL are required, but the rest is up to you (i.e., HR). We used to give 7 SL, 8 CL, and 15 PL in our organization.

In different weblinks of the Delhi Shop Establishment Act, it states Casual or Sick leave, and in some weblinks, it states Casual and Sick leave. Please let me know if both are applicable, providing the correct weblink for reference.

Sick Leave Payment

Is sick leave fully paid for that day? For example, if an employee took one sick leave in a month, will they get a full salary for that particular day provided they submit documents?

For compensation and benefit purposes, leaves are as good as a normal working day.

As per my knowledge, we do not fall under ESI as the minimum in-hand salary received by an employee is 20K.

Leave Carry Forward Policy

If any employee does not avail of sick leave or casual leave in a particular month, can it be carried forward to the next month? It's up to you whether you want your employees to consume their leaves within the year or they can carry forward up to a certain limit.

Punctuality and Salary Deduction

For maintaining punctuality, is it acceptable to deduct the salary of an employee even if they arrive 5 minutes late? Office hours are from 9:30 am to 6:30 pm, with a lunch hour from 1:00 to 2:00 pm. We are planning so.

Do not deduct salary in any circumstances. Any deduction needs to be deposited to the labor welfare fund with a return. You can cut half-day leave for three late comings.

Regards

Thank you for sharing the information. For the 6th point, to maintain punctuality, we were planning to deduct salary if the individual exceeds being late three times. Thanks for informing about the Labour Welfare Fund!!

Regards,