Understanding Earned Leave Calculation: How Does the Factories Act of 1948 Affect You?

Factors for Calculating Earned Leave (EL) as per the Factories Act of 1948

The calculation of Earned Leave (EL) under the Factories Act of 1948 takes into account various factors. These factors typically include the number of days worked by an employee, the duration of continuous service, and any specific provisions outlined in the Act regarding eligibility and accrual of leave. Additionally, the method of calculating EL may vary depending on the individual company policies and practices aligned with the statutory requirements. It is essential for employers to understand and adhere to the guidelines set forth in the Factories Act to ensure compliance and fair treatment of employees regarding earned leave entitlements.

Employees should have been calculated at least 240 days for the calculation of earned leave (EL). EL is calculated on a calendar year basis, where 1 EL should be granted for every 2 days worked.

If I am not mistaken, the Earned Leave (EL) is calculated as 1 EL for every 20 days worked. The eligibility for EL of an employee begins once they complete 240 days in the organization. All leaves are counted on a calendar year basis, as mentioned above.

The EL is calculated on a yearly basis, specifically on a calendar year basis, subject to the completion of 240 actual working days. An employee will be eligible for 1 day of EL for every 20 working days. If an employee does not complete the required number of working days, you should add his previous year's leave availed and then check whether he completes 240 days for computation purposes of eligibility. In such cases, he will be eligible for his actual working days and not for the additional added days.

If an employee joins in the middle of the year, he is not required to complete 240 days but should complete 2/3 of the working days. On a prorated basis, he will earn leave at the rate of 1 day for every 20 days of working.

If you still have doubts, you may write further in the thread.

Regards,
Adoni Suguresh
Sr. Executive (Pers, Admin & Ind. Rels)
Retired Labour Laws Consultant

Please provide clarification on whether an employer, upon joining in May, June, July, or any other month, needs to complete 240 days before availing of their first earned leave. Could you please share an example?

Regards,
Ravi

Reference to Adoni Surugesh's Post

Please refer to the post by Adoni Surugesh, which clearly states the response to your inquiry.