How Should Startups Handle Salary Calculations for Employees on Extended Leave?

For a startup, if an employee takes 3 weeks of consecutive leave, how will the salary be calculated for that one month? Should they be given 1 week's salary plus 3 Sundays' salary? What is the explanation behind adding or excluding the salary for Sunday?

In terms of salary calculation for an employee taking a 3-week continuous leave in a month, it is typically based on the company's policy and the employment laws in place. Generally, the salary for the month would be prorated based on the number of working days in the month, excluding weekends and holidays.

If the company's policy includes paying for Sundays as well, then the employee may be entitled to receive salary for those days. However, it's essential to ensure consistency and fairness in the approach taken for salary calculations during extended leaves to avoid any discrepancies or misunderstandings.

It's advisable for the startup to have a clear and transparent leave policy that outlines how salary calculations are made during extended leaves, including provisions for weekends and holidays. This can help in ensuring clarity for both the employer and the employee and in handling such situations effectively.

"Leave of three weeks at a stretch

'Leave of three weeks at a stretch' means availing of earned leave or privilege leave by the employee after prior approval, as the case may be. In such a case, the two Sundays falling just before the first day of leave and just after the last day have to be prefixed and suffixed respectively as paid holidays, and the intervening Sunday is to be included in the number of days sanctioned as leave. This treatment applies if all three Sundays are intervening days.

On the contrary, if it is leave on loss of pay, there is no question of payment of salary for the Sundays as they are merged with the entire stretch of leave on LOP."

Understanding Leave Rules and Salary Calculation

It is presumed from your posting that your establishment does not have Leave Rules or Standing Orders, which generally provide explanations. Now, it depends on how you calculate earned leave for your employees. If you are calculating weekly off days along with actual working days for earned leave, then when someone is availing leave and a weekly off day is associated, it will be treated as leave. It is better not to get confused; rather, follow the explanation provided by Mr. Umakanthan and myself, with which you feel comfortable. My suggestion is to frame the Leave Rule to avoid future confusion.