Regarding Annual Leave Payments

Yuva1213
Dear All,
I am Newer to HR work, I have Some doubt regarding Annual leave Payments. That can you please explain about fixed Bonus and variable Bonus. I heard that Basic and DA will be fixed Bonus and remaining daily position bonus and other production related bonuses are belongs to Variable Bonus.
Here is my query that when we pay annual leave payment what are the bonuses we need to consider???
If we deduct casual leave amount per hour from their salary is the same method need to follow...???
Please help me to give clarification regarding the above issues.
thanks,
9871103011
Dear Yuva,

When you raise any query, please be specific about your doubt. Please do not mess up the query by clubbing so many series of doubts/issues arising from various enactments.You have raised querries about (i) Annual leave Payments (ii) about fixed Bonus and variable Bonus (iii) deduction for casual leave.

Since you are new to HR deptt.I would advice you to mentioned the type of company, size of manpower,nature of business carried out etc and have a specific query. You know we need to check the applicability of the Act & rules to the particular organisation.Once it is cleared, it is easy to clear your doubts or answer your query. Even you have an option to raise various querries in different threads on this site.

When you say Annual leave Payments, I presume you mean encashment of Earned leaves/ Privilege leaves. You know that the numbers of leaves entitlement in a company depends upon state you are located in. Every state has different leave entitlement and leave policies, which should be seen before one defines leave policy of your company. Leave policy of a company cannot be less than that mentioned in the statutes.These are the leaves which are earned in the previous year and enjoyed in the preceding years. These leaves can be carry forward for the quatum upto the total of three years and vary from state to state as per the state's Shop & Establishment Act or Factories Rules.. These are encashable on basic salary to the employee normally on their termination. The condition for availing these leaves usually differ from company to company but normally in advance at least 15 days notice.

As regards your query about bonus is concerned, it all depends upon the company which may have different types of bonus to encourage the enhancement of production, quality or individual performance.These may be named as production bonus, target bonus,performance bonus,which may be fixed or variable.As far as statutory bonus is concerned, the same is dealt under the Payment of Bonus Act,1965. It is applicable to all the establishments,which employ 20 or more persons.Employees drawing salary upto 10,000/- per month are covered but the limit for calculations is fixed at Rs 3500/- per month.

Your last query where you mentioned "deduct casual leave amount per hour from their salary is the same method" is not clear but I can only say that the law does not provide this kind of deduction against casual leave but of course you are within your right to have a proportional deductions from the wages of the workers for their absence from duty than the normal fixed hours under Section 15 of the Minimum Wages Act,1948.

BS Kalsi

Member since Aug 2011
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