Understanding PL Entitlement: When Does the 2/3 Pro Rata Basis Apply for Less Than 240 Days?

Hello HR Experts, I have a small doubt regarding PL. If someone has not completed 240 days in the previous year, then she will not be entitled to PL. When does the 2/3 pro rata basis apply?

Dear Member,

If your unit is covered under the Factories Act, 1948, then go through the chapter on leave with wages to see the eligibility for the grant of earned leaves to the workers.

Regards,
R N KHOLA

Hi, Assuming you are from Gujarat:

Eligibility for Leave with Wages

Under both the Factories Act and the Gujarat Shops and Establishments Act, an employee must work for 240 days in a calendar year to become eligible for Leave with Wages (commonly referred to as Paid Leave or Earned Leave) in the subsequent year. The entitlement is calculated at the rate of 1 leave for every 20 days worked.

If an employee does not complete 240 days in the year, they are not legally entitled to such leave.

Progressive Employer Practices

That said, as a progressive employer, it is a commendable practice to credit leaves after every 20 working days or on a pro-rata basis. However, please note that this is not a legal mandate but rather a discretionary policy to promote employee welfare.

In continuation of what Srinivas has said, I would like to mention that under the Factories Act, an employee who joined in the middle of the year, for example, during 2024, should also be entitled to Paid Leave (PL) in 2025, subject to certain conditions. The condition is that the employee must have worked at least two-thirds of the total number of days remaining in the calendar year. This provision is a legal requirement as per section 79(2) of the Factories Act.

Therefore, an employee who joined on April 1, 2024, should have worked for 180 days, or an employee who joined on July 1 should have worked for 120 days to qualify for PL. The number of PL days will be limited to one day for every 20 days physically worked, excluding holidays and other leave days.