Paid Leave Accumulation: What's the Maximum Limit and When Can You Get Reimbursed?

Dear All,

Hope all of you are doing fine.

Can anyone please suggest to me what is the maximum number of EL/PL an employee can accumulate in his/her account? i.e., up to what limit can one carry forward these leaves. If one accumulates that particular number of maximum leaves, then when are they entitled to reimbursements for the accumulated leaves.

Regards,
Seema Gupta

Hi Seema,

As per the Factories Act 1948, any member can accumulate a maximum of 30 PL. However, I have observed that in many companies and manufacturing units, many employees have more than 100 leaves. Any employee can encash PL at the time of resignation or superannuation.

Thanks

Hi Seema,

Very well defined by Raj. Actually, it depends on company policy, which differs from one to another. Some companies carry forward only a limited number of leaves, and the rest of the balanced leaves, if any, get lapsed. The encashment mode also differs; some encash at the end of every year, while some do the same at the time of separation from the company. Additionally, some companies pay it at the basic salary only, whereas some at the gross salary.

Regards,

Amit Seth.

Dear Seema,

In our organization, the maximum number of ELs an employee can accumulate is 60. If they exceed 60, they can encash up to 8 ELs, and the remaining will lapse. For example, if an employee has 72 ELs, 60 will carry forward, 8 can be encashed, and the remaining 4 will lapse. They can claim encashment before the financial year-end. The amount will be reimbursed along with the next month's salary.

Regards,
Subhash

Does it apply to the companies that are registered under Shop and Establishment Act?

Regards,
Seema Gupta

Hello,

This is my first post on this community. I have a query regarding whether a company can change its rules regarding Earned Leave (EL) accumulation limit and encashment limit at any time. For example, some employees have accumulated their leave up to the maximum limit over a period of employment of 10-15 years, and suddenly the company changes its rules to reduce the accumulation limit, causing the excess leave to either lapse or be frozen beyond the new limit.

Thank you.

Hello friends,

I am a little confused after hearing that the accumulation is decided by the company. I spoke to my consultant regarding the maximum accumulation of leaves. He said that the maximum leave with wages a laborer can accumulate is 30 days and the balance has to be paid by the employer at the start of the subsequent year.

I have a few questions:

1. Is it necessary to give the payment for the excess leaves? Can the company set the ratio by itself?
2. What does the law state? Is there any mention of the maximum number of accumulated leaves?

Await your reply.

Thanks & Regards,
Anant Karnani

The corrected text with proper spelling, grammar, and paragraph formatting is as follows:

"Govt is a model employer, i.e., a careful study of their rules gives a holistic view. Next, pick up on compensation trends surveys, e.g., by Mercer. Then frame a policy for your company."

Hi Seema Gupta, I can give you an answer about EL/PL accumulation. The EL/PL shall be accumulated up to a maximum of 60 days. EL/PL shall be eligible only after the completion of one year. Employees shall be eligible for encashment of 8 days of EL/PL every year.

Could you please inform me about the maximum accumulation limit of leave as per the law?

Regards, Sachin