I want to understand what the norm is among small-scale companies regarding leave encashment once an employee resigns. Our company is based in Mumbai. Thank you.
Any company or organization, irrespective of its size, is obligated to pay the cash value of the Earned Leave (EL) credited to the employee on the date of termination of employment, whether by resignation or otherwise, as per the relevant leave provisions of the establishment-specific labor law applicable to it.
Roshni, accumulated leave needs to be encashed for the departing employee when he/she has left the organization. It is typically paid out as part of the full and final settlement to the employee. The above holds true irrespective of the scale, size, or location of an organization.
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