Navigating Leave and Comp-Off Policies: How Should We Handle Employee Concerns?

Leave Policy and Comp-Off Queries

We are providing 24 leaves per year, i.e., 2 leaves are added every month for employees. Every year, 20 leaves are carried forward, and the remaining balance is paid out. We also have a comp-off policy, which means if an employee works on a holiday or weekly off, they can take compensatory leave for that additional working time. If there is a comp-off balance at the end of the year, it will be paid out. Previously, we were paying the leaves and comp off based on the basic salary.

Questions on Comp-Off and Leave Payment

1. What is the validity period for taking comp-off? Should it be taken within a specific timeframe (e.g., 1 month, quarter, or year)?
2. Our employees are refusing to receive comp-off pay based on the basic salary. They argue that while deductions were made from their salary (e.g., LWP), all compensations were accounted for. What is the actual rule regarding comp-off or paid leaves?
3. Is it unlawful if we pay leaves to employees based on the basic salary?

Regards,
Amruta

Compensatory Off and Leave Policy Suggestions

As per standing orders, every employee should have the right to leave, and this should be consistently followed across all departments. In our discussion, I suggest that staff should take Compensatory Off within one month or quarter, not accumulating more than 5 days of compensatory off in every quarter or month. I also propose that any accumulated Compensatory Off should lapse, and the employee should benefit from encashment; there should be no loss of pay for any employees.

Leave Benefits and Conditions

Leave benefits will be given after confirmation in service. Training and probation periods do not entitle any leave, such as sick leave, casual leave, or Privilege Leave. If any employees take leave during their training or probation, it will be marked as Leave Without Pay (LWP). All leaves will be calculated based on the Basic Salary, which is not against the law. If they enjoy leaves, they should receive full benefits, including their allowance.

Privilege Leave Eligibility

Employees working for 240 days in a calendar year are eligible for 20 days of Privilege Leave (PL).

I suggest that you create an HR policy for your organization with guidance from your seniors or company MD, and I hope all of these measures will be implemented as per the HR Policy.

Regards,

Anant Bhosle

[Phone Number Removed For Privacy Reasons]

Compensatory Off Under the Factories Act

Under the Factories Act, compensatory off needs to be taken within three days before or after the weekly off when employees are required to work. There is no provision for giving salary in place of compensatory off.

The exception is when the factory operates (all employees are called to work) on a weekly off with the approval of the factory inspector, and an alternate compensatory off is declared for the factory. In this case, each worker can take their compensatory off within two months from the end of the month when the factory operated on the off day.

In my company, you can avail of Comp off up to last year. We are considering limiting it to within three months. If anyone does not avail of their Comp off leave, they will receive their Comp off paid against their basic salary.

In my company, you can avail of comp time off. Until last year, we were considering limiting it to within three months. If anyone does not take their comp time off leave, they will receive payment for their comp time off against their basic salary.

Under factory regulations, this is not legally allowed. However, most companies are permitting this, and so far, I have not heard of any actions taken by the labor department against management in this regard. There is a risk involved that needs assessment to determine its severity and whether further changes are necessary.

Can you guide me on what is wrong? And where do I have to work?

Can you guide me on what is wrong? And where do I have to work? Every person in a factory needs to get a weekly off. In case the person has to work on their weekly off, they need to be given a compensatory off within 3 days prior to or after the weekly off. No person can work for more than 10 days without a weekly off or compensatory off.

Provision for Weekly Off Attendance

When personnel attend work on their scheduled weekly off, they are entitled to take another day off in compensation. What is the provision for this in your company?

Regards

Dear Amruta, do you have an encashment policy in place? If you do not, make sure you make this a priority to clarify the same. If you find this difficult, send a circular through a senior manager.

If you are allowing 20 leaves to be carried forward every year, it would put a huge strain during the final settlement if you are paying gross salary. There is always a trade-off between gross salary payment for leaves and the number of leaves to be carried forward, and also the encashment is not available for the extra days worked. In companies where there is a gross salary payment, there is a limit on the number of days that can be encashed; the others just lapse.

Hope this is helpful.

Regards,
Pratima

Compensatory Offs and Employee Rights

Regarding compensatory offs, Saswata Banerjee is correct. For every 20 days worked, 1 leave should be credited to the employee's account. Trainees and probationers have all rights to enjoy all benefits and compensations just like any other employees.

Thanks and Regards,

Sumit Kumar Saxena

We are providing 24 leaves per year, i.e., 2 leaves are added every month to employees. Every year, 20 leaves are carried forward, and the balance is paid. Additionally, we have a comp-off policy, meaning if any employee works on a holiday or a weekly off, they can take compensatory leave for that additional working time. If there is a balance of comp-off at the end of the year, it will be paid out. Previously, we were paying the leaves and comp-off based on the basic salary.

My Questions Are:

1. What is the validity period for comp-off? Should it be taken within a specific timeframe (e.g., 1 month, quarter, or year)?

2. Our employees are objecting to receiving comp-off pay based on the basic salary. They argue that when deductions were made from the salary, all components were considered, and paying out leaves and comp-off should be calculated differently. What is the official rule regarding comp-off or paid leaves?

3. Is it against the law if we pay leaves to employees based on the basic salary?

Regards,
Amruta

Regards,
PGR

COMPENSATORY LEAVE Policy

Here is the COMPENSATORY LEAVE policy of our company. It may be helpful to you:

Eligibility

- Managers and above are not eligible.
- Office staff applicability: The compensatory day off must be availed within a month after which the employee has worked on a weekend/holiday, else it will lapse.
- The choice of day off should be on the approval of the manager.
- The employee has to work first and then claim the compensatory day off, not vice versa.
- To become eligible for a compensatory day off, the minimum work hours put in should be at least 6 hours with prior approval.
- Compensatory days off cannot be accumulated in the paid leave balance and cannot be encashed.
- Compensatory days off cannot be claimed by employees when they work from home.

Regards,
Gia

Answers to Your Queries

1. Validity of Comp Off
Answer: It is advisable to make it quarterly (for the employee's benefit) and keep a record for quick reference.

2. Comp Off Pay on Basic Salary
Answer: Leave encashment and comp offs will be on Basic + DA. Encourage employees to avail comp offs before they lapse. If they want cash benefits, they will receive Basic + DA. If they refuse, the comp off will lapse.

3. Legality of Paying Leaves on Basic Salary
Answer: No, you are not against any law by paying leaves on Basic Salary + DA.

Hope I am clear! Chill HR!
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It is against the law since the Factories Act states that no employee can work without a day off for more than 10 days. Every employee should get a weekly day off after 6 days of work. According to the Factories Act, the weekly day off should be on Sunday, but it can be changed with prior approval from the factory inspector.

If an employee works on the weekly day off, then they should be allowed to take Compensatory Off (C/Off) within three days after that.

PGR is right that C/Off should be used within the month. Leave encashment should be on gross salary instead of basic+DA. Payment based on basic+DA is against the law.

Thanks & Regards,
Sumit Kumar Saxena

Is this the right thing we are doing to carry forward the 20 leaves, or do we need to make a change? Also, if we pay off the leaves based on the basic salary, would that be against labor law?

Regards,
Amruta

Hello Suhas, you are assuming that the person is from a factory. I believe the Factories Act is applicable only to factories and similar units, not to private firms or companies that do not have production facilities. For these cases, we have the Companies Act, Shop and Establishment Act, etc. Different acts apply to different types of firms, depending on their classification.

Since it is not mentioned whether Amruta belongs to a factory, it is entirely possible that she may not work in a factory, as the probability is the same. If the firm she is working for is not covered by the Factories Act, the solution provided by GurgaonHR is perfect to the best of my knowledge.