Earned Leave accumulation for 13 years of service

I have resigned from a Pvt. Ltd. Co. where I worked for 13 years, and my earned leave accumulated to 356 days. Can the company encash all my 356 days, or is there a limit for accumulation?

This depends upon your company's HR policy on leave/leave encashment. As we are not aware of your company's policy or the terms of your offer of appointment, it is difficult to give a concrete answer.

How is earned leave accumulated?

Normally, as Mr. Nair has mentioned, the leave policy only specifies how much leave can be carried forward or accumulated. If you take leave according to the applicable law, for instance, in a factory-type establishment, you can accumulate only 24 days of leave. The Shops and Commercial Establishments Act in some states (such as Maharashtra) allows for the accumulation of up to 45 days. Additionally, if your leave requests have been consistently denied, that number of days of leave can be added to the above limits, i.e., 24 or 45 days. Allowing an accumulation of 356 days of leave credit for 13 years of service is a positive sign of employee benefits, and I believe that such an establishment would not hesitate to cash out the entire leave entitlement.

According to my appointment letter, the following leaves are mentioned:

Casual leave: 12 per year, which I have taken every year as they expire annually.

Sick leave: 15 per year, which have also been utilized yearly and expire annually.

Earned leave: 30 days per year (30 × 13 = 390). I have used 34 days over the 13 years of my service, leaving a balance of 356 days. According to government regulations, we can accumulate up to 300 days for encashment upon retirement or resignation.

Can you please verify and provide me with an update? The company is "LIMITED" and not Pvt. Ltd.

I understand that your establishment, whether it is a private limited or limited company, is not a government organization or a public sector company but a private sector organization. Unless otherwise stated very specifically in the company's certified Standing Orders or leave rules, the earned leave may not accumulate to such a huge number. The leave rules of companies differ from company to company but are subject to certain conditions, as I have mentioned in the earlier post.

Therefore, you have to check whether there is any provision for the accumulation of earned leave without any limits. If such a provision exists, there should be a provision that the accumulated leave shall be encashed. Please check.

Dear Neelam,

As a practice, earned leaves accumulated in one's account get paid at the time of F&F settlement. I don't feel there should be any problem with making payments by your employer if there are 356 accumulated leave days. The non-payment situation arises where a company maintains a maximum limit for leave accumulation policy. In such cases, the excess of the maximum limit gets lapsed. There is no specific limit for accumulation, and the limit differs from company to company. The maximum limit always remains between 300 to 350 days. Legally, all the leaves accumulated are to be paid in the absence of a specific limit or policy. The Basic (Basic+DA) rate is paid excluding other perks.

When you communicate your resignation, you can also request clarification on the earned leave encashment process and limits. This will help you understand how much leave can be encashed and ensure a smooth transition during your resignation process.

The maximum number of earned leaves that can be accumulated in a private company in India is 30 days. So, your company can only encash 30 days of your leave, and the remaining days will lapse.

The limit of 30 days is applicable to all employees, regardless of their length of service. However, some companies may have their own policies that allow for a higher accumulation limit. If you are unsure of your company's policy, you should check with your HR department.

Factors affecting leave accumulation limit in a private company in India

- The company's leave policy
- The employee's length of service
- The employee's designation
- The employee's performance

If you have any questions about your leave accumulation limit, you should speak to your HR department. They will be able to provide you with more specific information about your company's policy.