How Many Annual Leaves Can We Offer Without Privilege Days in a Small Company?

Dear All,

I request everyone to explain the leave policy to me. I am seeking more information on how many total leaves can be granted to an employee in a year. Our company is a private limited company located in Pune, with 30 team members at the Mumbai location.

Due to the team working at client locations, we are unable to provide privilege leaves. It is not feasible for any employee to take 3-4 days off. Please advise on the number of leaves that can be allocated in a year, excluding privilege leaves.

Regards,
Sapana

Understanding Leave Entitlement

The leave entitlement is a mixture of laws laid down under various acts and the company policies defined for the purpose.

In most states and industries, the Casual Leave (CL) and Sick Leave (SL) depend upon the company policy. However, under the Factory Act, the Privilege Leave (PL) is defined as one day of leave after 20 days of being present (excluding weekends, holidays, etc.). In addition to the National Holidays, every state declares some compulsory holidays which need to be complied with in the state.

In most organizations, 12 leaves (5 CL, 7 SL) and 15 PLs (as applicable) are given every year. The accumulation of leave depends upon the company policy. The same is followed in our company.

You can seek some consultant's services in your state. Moreover, if there is no defined leave policy in your company, there are professionals who do this at a nominal cost; you can approach them.

Understanding Leave Days in a Year

Please consider that there are 365 days in a year. Out of those, 52 weekly holidays are accounted for, leaving 313 days. How many days can an employer afford to have employees stay away from work while still paying them in full? These days are known as leave days, which encompass Casual Leave, Sick Leave, Earn/Privilege Leave, and Paid Holidays.

Types of Leave

For Earn/Privilege Leave (EL/PL), the rule is 1 day of leave for every 20 days worked in factories, and in Shop Acts, it is 1 day of leave for every 12 days worked. Sick Leave is provided in cases where there are no other benefits available, such as the ESI Act, Employees' Compensation Act, or Mediclaim, which cater to employee sickness.

Concept of 13 Months' Wages

An idea commonly held is that of receiving 13 months' wages for 11 months of work. This accounts for 11 months of work, 1 month of bonus, and 1 month of leave. The allocation and type of leave depend on various factors such as State laws, company regulations, union agreements, and prevailing practices.

I am from Pune. Please feel free to contact me via phone at [Phone Number Removed For Privacy Reasons] or email at [Email Removed For Privacy Reasons].

Regards, Vibhakar Ramtirthkar