Need Help Revamping Our Company's Leave Policy – How Would You Approach It?

Hi, can someone help me out in formulating a leave policy for my company? Currently, we only have 12 leaves per month, and I wish to revise this. Kindly suggest the best approach.

Regards,
Shravan

Hi Shravan,

You can have 12 CLs, 20 Earned Ls, or Privilege leaves and 10-12 medical leaves. Only EL can be encashed, for EL/ML, you can allow accumulation up to 60/90 days. For probationers, 1 CL per month. Maternity leave of 12 weeks shall be as per the labor laws.

In brief, while defining the policy, please ensure you mention leaves limit and accumulations, prefix/suffix with holidays, encashment details, general instructions like allowing/forwarding authority. Half-day leaves, supporting documents in case of medical leave extending beyond 5 days or more, leave without pay, special leaves if any. Study/professional leaves that are up to the management or can be adjusted from the existing leaves.

Further, just type leave rules in Google and you'll get more related info.

Thanks

Hi Shravan,

Find enclosed one of the samples of the Leave Policy. I hope it will help you prepare the same at your end.

Regards,
Amit Seth.

Hi Amit,

Could you please suggest where I can find the current salary standards for various positions in mid-sized IT companies with a staff strength of 80?

Welcome Shravan,

The contents of the salary breakup are as below. You can prepare it according to your own suitability. HRA would be 50% or 60% of the basic.

- Basic
- HRA
- CCA - ₹825/- is exempted from tax
- Other Allowance
- Mobile Reimbursement
- Medical Reimbursement of ₹1250/month is exempted from tax

Gross Per Month = Sum of all the above.

Gross Per Annum= 12*Gross/Month

PF Contribution= 12% of Basic/Annum

ESI Contribution = 4.75% of Gross/Annum

Medical = The mediclaim facility provided to an employee who is not covered under ESI as the maximum ceiling for ESI is ₹10000/Month. Getting more than this will be covered under Mediclaim or it depends on company policy.

EX-Gratia/Bonus = A fixed amount as a bonus

Annual Fixed Gross Cost= Gross/Annum + Ex-gratia

Annual Total Cost = AFGC + PF + ESIC

Annual total cost is also called CTC.

Apart from this, Food coupons, Holiday package, and Furnishing items are included in their CTC.

Hope this provides some input for your benchmarking to some extent.

Regards,

Amit Seth.

Hi Shravan!

I hope this file will solve your problem in formulating the leave policy. Hope you'll like it.

Akshita 😂

Dear Amit,

Can you please guide me on leave policies and labor rules in Dubai.

Regards,
Rajeshwari

Dear Amit Sir,

Please let me know where we can get the updated rates as you have calculated HRA at 50% of 60% of the Basic and the limit of Medical Reimbursement, etc.

Looking forward to your reply.

Regards,
Rahul Tiwari

Dear Rajeshwari,

I am not aware of the policies in Dubai, but I believe the leave policy remains the same in most companies. Regarding labor laws, they vary with the government in place.

Regards,
Amit Seth.

Hi Rahul,

Regarding HRA, it differs from company to company. It remains between 30% to 60%, and there is no specific calculation.

Concerning Medical reimbursement, up to INR 1,250 is exempted from tax. Hence, people prefer to keep it at INR 1,250 to avail of this benefit. To receive the credit in your account, you are required to produce the medical bill of the same amount.

Regards,

Amit Seth.

Hi Shravan,

12 leaves per year, I think so. Generally, leaves would be divided into sick leaves and casual leaves. In casual leaves, a few would be paid leaves which are entitled to be paid at the end of the year if not used.

Hi Akshita,

Thank you so much for the file. Thank you, Naveen, for your suggestion. But what I think is, as per the labor law, there must be at least 1 leave per 20 working days. So it comes to 1.5 leaves per month and a minimum of 18 leaves per annum... isn't that sooo?

Shravan