Is It Legal for Companies to Deduct Salary for Absences Without Offering Leave? What Can Employees Do?

Dear All,

I want to know if any company does not give any kind of leaves (EL / CL/ SL) to employees and deducts the amount for the absent days from their monthly salary.

For example, if an employee works for 28 days in a month, the company does not adjust any leave and straightaway deducts 2 days' salary only.

However, they have introduced a new component in the salary structure called "Leave Allowance," which is only 1.75 days' encashment in a month, and this amount is to be deposited with the account department and payable at the end of the financial year.

On the ground of employee rights, is it illegal? If yes, then what steps can an employee take against this policy?

Dear Sunil,

As per my knowledge, leaves are meant to facilitate work-life balance. If the company is deducting pay in the form of leave allowance, which is then deposited into an account to be released at the end of the year, it is not a healthy practice. Any remaining leaves should be encashed at the end of the year.

Thank you,
Tarun
tarunaindia@gmail.com

Dear All,

As per my knowledge, leaves given to the employee are mandatory for an employer. You can refer to the Factory Act, 1948, or Shop & Establishment Act as there are provisions for leaves. Every employee is eligible for 1 EL every 20 working days, and 1 CL will be given for a month. In total, they are eligible for 2.25 leaves per month. Annually, an employee is eligible for 12 CL and 15 EL. An employer can give more than this but cannot give less. You can discuss these provisions with HR and present them to your management in a soft manner. Maybe they will agree. There are other options as well. Hope this helps you.

Regards,
Ranjeet