How Do You Calculate EL Encashment for a 5-Day Workweek Company?

Dear Sir/Madam,

Could someone please tell me what the EL encashment formula is for a company that operates on a 5 days/week working schedule?

Thank you.

Monu

Hi Buddy,

As per the Factories Act, an adult male worker will get one EL for every twenty days of working. For calculating 20 days, your presence in the workplace will be taken into account, not the weekly off or holidays.

With Regards,

Mr. Thumbs Up

Dear Monu,

Encashment of leave mostly depends on the company policy, certified standing orders' provisions. So please check your company's HR policy. There may be a limit prescribed for encashment in the rules of the Company. In an earlier post, Mr. TU has suggested how earned leave can be credited to individuals' accounts, but the encashment issue is another matter.

In most companies, after a certain limit, earned leave (EL) or casual leave (CL) lapses if the concerned employee has not availed them.

Thank you.

Leave encashment during service is not a mandatory right for employees and is not governed by any statute as far as the formula is concerned. It is as per the company's policy. In your case, the monthly salary can be divided by 30 to arrive at one day's salary, as it costs you less than dividing by 20 or the actual working days.