Insights on Annual Leave, PL Calculation, and Contractual Labor Practices

Dear All,

Greetings of the Day!

There is a rule that when an employee works 240 days in a year, then for every 20 days worked, they receive one PL.

I want to know if an employee has 15 days of PL as per company criteria for one year and has already taken 15 leaves during the year, are these leaves counted as working days? If so, can we calculate PL based on these leaves?

If a candidate works less than 240 days, what is the criteria for PL? Please guide me.

HALF DAY SHIFT

Additionally, can we implement half-day shifts (4 hours) for contractual labor if our production volume is low?

Thanks & Regards,
Jagdish

Yes, PL availed is considered as days worked. Similarly, the same 15 days are counted for PL calculation in the 2nd year. 240 days are counted for the initial year for eligibility criteria. Thereafter, every PL day is considered as 20 days worked.

Regarding contractual labor, if you hire a person as casual labor for 8 hours, instead of considering half a day, you can fix the contract on a volume basis rather than an hourly basis. You can also hire fewer laborers, for example, 1 laborer instead of 2 laborers.

This is my view; let's wait for other seniors to respond too.

There is nothing in the law to prevent you from hiring for less than 8 hours. The law is there to prevent you from making someone work for more than 9 hours a day. However, you need to check the provisions of the Minimum Wages Act in your state and the notification very carefully. If the notification provides the salary per day without specifying how to compute it for hourly paid workers, then you may have to pay a daily rate even if you are appointing them for less than 8 hours.

Dear Jagdish,

As per the provisions of the Factories Act and the rules made thereunder, a workman, after working two hundred forty days in a calendar year, earns leave with wages at the rate of one day for every twenty days worked, up to a maximum of twenty days. The position is very clear; however, you may consult the Act for further clarification. Additionally, criteria for working less than 240 days in a calendar year also exist, so please review that as well.

S.K. Johri

Dear friends,

The eligibility for entitlement of PL is 240 days, which includes all approved leave taken. For example, if an employee works for 220 days and he was on authorized leave for 25 days, he is entitled to credit of PL. However, the PL will be calculated based on actual working days, i.e., 220/20 = 11 days.

Thanks & regards