Earned Leave Dilemma: How Many Days Can You Cash In and Carry Forward?

What is the maximum number of days for the encashment of earned leave?

What is the carryforward limit for earned leave?

Any unearned earned leave can be encashed only when the employee leaves the establishment. That means, as per law, there is no encashment available for employees who are continuing in the service.

OHSWC Code and Leave Encashment

When the OHSWC Code is made applicable, any leave that exceeds 30 days shall be encashed by an existing employee.

Maximum Earned Leave Credit

As per the present rule, the maximum earned leave (EL) that can be credited at any time is 30 days.

As per the Factories Act of 1948, every worker is entitled to one Earned Leave (EL) for every 20 days of work, i.e., 15 ELs. The maximum number of ELs that can be carried forward from one year to the next depends on company policies, typically capped at 30 days.

Carrying Forward and Encashment of PL/EL

PL/EL can be carried forward based on company policy, as the act is silent on this matter. Employees who leave the company may be able to encash their PL/EL. Generally, companies maintain a minimum balance of 30 days, but there is no specific rule for this. The company can decide the PL limit based on its policy, as approved by the management.

Ideally, if you align the PL limit with the notice period duration, it would be beneficial for the company.