How Do You Calculate Earned Leave When Your Company Offers Two Weeks Off?

Dear All,

Please advise me on the formula for calculating EL if the company is providing two weeks off.

Dear Devi,

What is your company - a shop or an establishment, a factory, a catering establishment, an oil company having offshore activities? What is that "two-week off" given by the company? Unless these vital pieces of information are provided, no one can answer you.

Dear Umakanthan sir,

Please clarify EL calculation. Does Total working days include all leaves taken (EL, CL, or any leave enjoyed), or only the days physically present at the job site?

Please reply.

Dear Biswal, to get your doubt cleared, you can refer to Sec. 79 of the Factories Act, 1948, which is considered the mother of all establishment-specific Indian Labor Laws. What we commonly know as Earned Leave is termed as "Annual Leave with Wages" under the mentioned Act. Additionally, concerning shops and establishments in our country, governed by separate State Acts, the Cabinet-approved Model Shops and Establishments (Regulation of Employment and Conditions of Service) Bill of 2016, which is expected to be universally adopted by all States, states in Sec. 11(3) that Leave With Wages should be provided at a rate of one day for every 20 days of work completed by employees who have worked for not less than 240 days in the preceding year.

As per the statutory explanations provided therein, days of work encompass lay-off, maternity leave, days of leave with wages taken in the current year, and days of absence due to temporary disablement resulting from an employment accident. However, even though these days are considered as days worked for the calculation of 240 days of service, employees will not accrue any leave on these days.

Regarding weekly and other statutory holidays, as well as other types of leave taken, my perspective is that such days should be factored into the calculation of Earned Leave for the respective year.

Dear sir,

That means for the calculation of EL, we also take CL, PL, or any leave enjoyed with physical presence. If he/she enjoyed a comp-off or a national holiday, does it also include calculations for EL?

Please clarify.

Dear Biswal,

Suppose in a calendar year, a particular employee was not laid off and did not avail any maternity leave or EL, the entire 365 days of the year, including the weekly and other holidays, days of CL and/or SL availed by him, should be taken into account for the purpose of calculation of his EL earned in that year. Then the EL earned by him would be 365/20 = 18.25 or 18 days.

In case that employee was on maternity leave for 182 days, her number of days present becomes only 183 and falls below the threshold of 240 days. However, if the ML is added to the 183 days, she notionally crosses the threshold and becomes eligible for computation purposes. Yet, she will not actually earn any EL on the 182 days of ML; hence, her EL earned during the calendar year would be 183/20 = 9.15 or 9 days only.

In another case, if the employee goes on 20 days EL earned in the previous years, the number of days present becomes 345 days, and in that situation, the EL earned by him would be 345/20 = 17.25 or 17 days only.

It is to be noted that in both cases, the days of absence availed by way of weekly off, national and festival holidays, and CL have been taken into account for both the purpose of computation of 240 days of service as well as the calculation of leave earned.

Hope I have cleared your doubts.