Earned Leaves - Weather On Gross Or Basic Salary - DOC Download

Dear Harry,
SL & PL will be encashed every financial year.
Sorry CL can not be encashed and end of the year CL will get laps.
Regards,
Vani M
HR

Encashment at the end of year is individual Companies policy decision. Some Companies used to offer encashement CL just to dissuade peoplr from taking leave often. I have seen this practice in a very few companies in seventies and eighties. Encashment is not a legal right except at the time of cessation of employment and this is restricted to Earned Leave.
In one company where I was working, the management gave me encashment of Sick Leave eventhough I was there for three years only. They gave it as a matter of goodwill. I have given encashment of CL for certain category of employees

Dear Vani,
I have the same doubt as Gurgoun HR.
The thing is only EL/Pl is cash-able at the end of the year. It is said as Leave with Wages in Factories act. i.e 1 day EL for every 20 days.
SL is always calculated in two ways (60 days once). If I'm wrong pl correct me. One for Employees covered under ESIC and the rest.
If covered under ESIC, the employee shall give a writ to the HR dept. The HR shall co-ordinate with the ESIC official and get the payment done for the employee through bank.
If the Employee is covered under the Medical allowance (i.e above 15000), then the company shall avail SL for the Employee.
Hope I was reight... Pl correct Me...

correct me if i am wrong :
" Section 79 (3) of Factory Act 1948 states that If a worker is discharged or dismissed from service or quits his employment or is superannuated or dies while in service, during the course of the calendar year, he or his heir or nominee, as the case may be, shall be entitled to WAGES in lieu of the quantum of leave to which he was entitled immediately before his discharge, dismissal, quitting of employment, superannuation or death, calculated at the rates specified in sub-section (1), even if he had not worked for the entire period specified in sub-section(1) or sub-section (2) making him eligible to avail of such leave, and such payment shall be made" Now when we taking of WAGES it will come under Payment of Wages Act not Minimum Wages Act. so the rule I believe is contradictory in itself"
Harry

Dear All,
Leave encashment would be on Gross salary. Please prefer Factory Act - Leave module.
Clearly mentioned in Factory Act that Leave encashment on gross salary.(Including all allowances, which you are paying regularly in every month.)
Regards,

Dear Yashwanth,
Dont get confused. If the employee has taken leave then its not a problem, If the employee left with SL it will be encashed at the end of the year.
Dear Faruk Shaik,
EL & SL is calculated on Basic + DA.
Regards,
Vani M

earn leave calculaton must be on gross as per factory act
reason for paying on basic- only those factory are providing leave policy better then under factory act are exempted from the rule under factory act they can pay on basic

Dear All,
It actually depends on individual companies. and very few companies calculates the leave encashment on Gross salary to attract and retain the people. As far as Sick leave is concerned, it is encashed so that the employee would not take the sick leaves even.
Regards,
Vani M
HR

Section 80 of the Factories Act says that if an worker avail leave he shall be paid for the days of leave @ average total earnings excluding OT & bonus but including DA and cash equivalent of concessional sale of food grains or other articles.Practically when employee is on EL full wages are paid.Sec 80 is not meant for EL surrender .The concept of EL surrender was not before the legislature in 1948.Leave surrender is not a legal right.Sec 79 deals with payment in lieu of leave where the employee service come to an end,not about EL surrender while the employee is in service.Leave surrender and payment for that depend on each CO's policy and practice.
VARGHESE MATHEW
9961266966

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Dear Harry,

The query has got some bugs in it. Is it about calculation of EL or calculation of salary during EL. The answers would depend on the query. Presuming that he requires clarification only as to -

1) how to calculate leave salary for the EL one avails EL under Factories Act/Rules as he says he is in a manufacturing Co.

2) And the wages for EL is not "Encashment of EL" or "Encashment on cessation of employment" So this discussion is not about it.

If So let us see what the Factories Act/Rules says about it -

Wages during Leave Period. For the period of leave allowed to a worker according to rules, he shall be paid at a rate equal to the daily average of his total full-time earnings for the days on which he actually worked during the month immediately preceding his leave~The average rate is to be calculated, exclusive of any overtime and bonus, but inclusive of dearness allowance and the cash equivalent of the advantage accruing through the concessional sale to the worker of food-grains and other articles. The cash equivalent, referred to above, is to be computed according to the method used when calculating the extra wages payable -for overtime work. (See. post)-Sec. 80

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