How Do You Calculate Pro-Rata Leave for New Employees After Probation?

Hi, I am working as an HR Executive in an IT company where leave is allotted to employees on a pro-rata basis, and the leave year follows the financial year from April to March. We provide 12 paid leaves (PL) and 6 sick leaves per year, and employees become eligible for these leaves only after completing their probation period.

For example, if someone joins the organization on June 2, 2022, and completes their probation on December 2, 2022, how do we calculate their PL and sick leave on a pro-rata basis?

With a 5-day workweek, we need to determine whether we calculate leave based on a 30-day month or exclude Saturdays and Sundays from the calculation.

It appears from the leave rule that there is 1 PL per month and 0.5 SL per month. Therefore, after the completion of the 6-month probation period, the employee will be eligible for 6 days PL and 3 days SL on a pro-rata basis for working 6 months.

Now, there will be a remaining 4 months until March 23, 2023. The pro-rata leave earning should be 4 days PL and 2 days SL extra as of 31.03.2023.

Consideration of Weekends in Leave Calculation
Whether the organization will consider 30 days in a month or exclude Sundays and Saturdays depends on the organization's leave policy. In this case, in my opinion, Sundays and Saturdays may be excluded.

Regards, S K Bandyopadhyay

Hi, I'm working in a refrigeration company. In our company, the leave policy is from January to December with 14 leaves. My question is, after the confirmation of an employee, how should the remaining months of the year be considered for leave allocation? For example, if an employee joins in April and gets confirmed in October, how many leaves should be added to the leave record?

Leave Policies Under Different Acts

Earned leaves are to be granted either in accordance with the provisions of the Factories Act, 1948, or in accordance with the applicable State S&E Act. Sick leaves are to be granted as per the State Industrial Establishments (N&F Holidays and C&S Leaves) Act in case of units falling under the Factories Act, 1948. If your unit is covered under the S&E Act, then you are to follow the provisions as laid down in the applicable S&E Act. If you have a better facility policy, then you are to adhere to your policy.

Regards, R N KHOLA

Leave Policies for IT Companies

The leaves applicable to IT companies should be as per the State Shops and Commercial Establishments Act. Typically, leaves are accounted for from January to December, not from April to March. The number of Casual Leave (CL), Sick Leave (SL), and Earned Leave (EL) will depend on the Shops Act of the state. Generally, it is 12 days of CL, 12 days of SL, and 12 days of EL. EL is credited after 12 months of service.

Leave During Probation Period

Under no Act is it stated that you need not give any leave during the probation period. Under all state Acts, CL and SL are to be given during and for the current year of joining itself. Therefore, even if the employee is on probation, they should be given CL and SL. It is up to you to decide how much CL or SL an employee can avail in a month. Obviously, the employer can restrict that leave for more than one day will not be approved in a month.

Earned Leave Credit

Coming to Earned Leave, it is to be credited after 12 months of service, and the date of joining, not the date of confirmation, shall be the date for counting 12 months. This means the first credit of EL is given after 12 months, but the number to be credited should be 12 days. This clearly establishes that earned leave is earned right during the probation period.

Leave Calculation for Salary and Contributions

Even if you have five days of working, you will be paying a salary for 30 days, right? Then for all purposes relating to leave calculation, payments, and contributions, the number of days should be actual paid days. If out of 30/31, two days are unpaid, then the working days for that month for that employee should be 28/29.