Leave Encashment Practices: Can You Choose When to Cash Out Your Leave?

Hello,

I wanted to know the general practice followed in the organization for leave encashment. Can leave encashment be done at any time during the year? Will the leave encashment be done automatically based on the company's policy, or will it be based on the employee's choice? Can anyone please suggest the normal practice for leave encashment followed across the organization?

Thanks & Regards,
Neeta Nair

Hi Neeta,
Leave encashment depends on a company's HR policies.
Generally, PLs can be accumulated Up to 45 days.
If at the time of credit of PL the accumulation goes beyond 45 days, the excess leave over and above 45 days shall automatically lapse.
similarly, PLs can be encashed keeping 30 days in balance. Entire leave credited to employee's a/c will be encashed at the time of resignation/retirement.
These rules differ from state to state and company to company.
The above encashment rule is based on Delhi Shop's & establishment Act.
Regards
Abhishek

Abhishek,

Thanks for that information. But would you be able to tell me if the company has a policy of encashing unavailed PL once a year subject to a minimum balance of 45 days, then in such cases, is it advisable for the company to encash the leave immediately if a person exceeds 45 days in his account? Or should it be left to employees to decide whether they want to encash the same? In such a case, can the encashment be done whenever the employee needs the money?

Regards,
Neeta