Small Software Company Leave Policy: Is Leave Encashment Required by Law?

aashini-kaushik
I have a small software company registered in Gujarat. The company employs fewer than 10 people who work from home. They have Saturdays and Sundays off, along with 8 mandatory national holidays and 2 optional minority holidays.

Leave Policy for a Small Software Company

What should be my leave policy? Is the encashment of leaves at the time of termination mandatory under the law? I have read that most companies offer 12 casual leaves + 12 earned leaves per year (1 day off for every 20 working days), but many sources mention that leave encashment is not mandatory. Please advise.
KK!HR
Leave Policy and Encashment

You need to follow the leave policy as required by the Shop & Establishment Act of Gujarat. Leave encashment while in service is not mandatory, but it is mandatory as a terminal benefit.

Thank you.
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