Can We Legally Adjust Leave Policies in a Startup to Prevent System Abuse?

Hi all,

I'm currently working in an IT start-up company where we have around 40 employees on payroll. I'd like to request your help in framing the policy for leaves.

Leave Policy Guidance

My question is, should I follow the state Shops and Establishment Act for leaves (which would be 12 CL, 15 EL, and 12 SL), or can I modify the number of leaves based on the current requirements of the company? By modification, I mean converting the CL to Work from Home. Additionally, I'd like to know if we can limit CLs and ELs to a maximum of 1 per month. I'm asking this to strategically design the leave policy, as in a start-up, employees often take advantage of the system, especially when managers are not acting responsibly.

Thank you.

Leave Policy Flexibility

You can provide a higher number of leaves than what is mandated by the Act, but you cannot reduce them. The work-from-home arrangement should not be considered an employee benefit; rather, it is advantageous for both the employer and the employee. In fact, it might be more beneficial to the employer. You can reduce the conveyance part of the salary, but you cannot reduce the number of leaves. Additionally, it is not possible to interchange the types of leaves. If employees are taking undue advantage of working from home, you may consider stopping it and requiring them to work from the office.

Hi,

It is advisable to follow leave rules as per the Act.

Converting CL to WFH does not make sense. Work From Home is officially a working day only, which cannot be equated to leave with wages.

In fact, WFH employees are contributing more than those working in the office. The only advantage of WFH is that there is no need to travel to the office.