How Can I Implement a Fair Leave Policy Without Upsetting Employees Used to Higher Encashment?

Dear All, I am working in a Pvt. Ltd company where we don't have any Leave Policy and Medical Benefits for employees. Now, I am planning to implement a Leave Policy, but here is a problem.

Leave encashment issue

1. Some of the employees are entitled to 2.25 Leave encashment and ex-gratia. (For example: Gross Salary 15,000/-, if he/she works a minimum of 240 days, then 15,000*2.25=33,750/-)
2. Some employees will receive only one month of leave encashment. (For example: Gross salary 15,000/-, if he/she works a minimum of 240 days, then 15,000*1=15,000/-)

Implementing the Leave Policy

If I implement the Leave Policy, how should I handle this issue and how can I persuade my management to accept the new policy? The employees who receive 2.25 leaves encashment may not accept this change as it would result in a loss for them. However, I aim to change the system in this organization gradually, implementing changes step by step in a corporate manner.

I hope to receive the best solutions and insights from the experts in this group.

Hi Meera, I have a small doubt. As per your description, I understand that your company is allowing encashment of leaves at the end of every year. Correct me if I am wrong. If this is the case, I would suggest stopping leave encashment after the end of a leave calendar year. Leave encashment can be done only at the time of separation, retirement, or death. The rate can be 1x of the last drawn salary.

Also, fix a maximum quota of leave carry forwarding to the next year. This would be helpful for the organization and will motivate employees to consume their leave quota. I hope I have helped you to get your resolution.