How Can I Create a New Leave Pattern and Understand Leave Encashment for My Pvt Ltd Company?

Please help me to draft a new leave pattern for my company; it's a Pvt Ltd Company. I want to know about Leave Encashment methods as we don't carry forward the leaves for the next year. Please guide me.

Regards,
Lisha

Hi Lisha,

Wishing you a Happy and Prosperous New Year.

As per the law, every company should provide CL and SL for a year, and EL should be given based on his/her worked days, e.g. 20 days worked = 1 leave earned. EL is normally credited after the completion of one year. In our company, any CL remaining lapses at the end of the year. SL can be carried forward to the next year and accumulated for up to 3 years, while EL can be accumulated for 5 years, after which it lapses.

We are also introducing a Leave Encashment Policy for EL only.

Please refer to the Factories Act to get the details of the Leave Policy.

That's all I could share.

Regards,
Patro

Hi,

Here is a sample draft you can modify, reword, and do whatever you want to do!

1. This is applicable to all categories of employees of the organization.
2. An employee must have completed two years of service before availing leave encashment.
3. Leave and leave encashment shall be calculated for the calendar year.
4. Only earned leave shall be encashed. No sick leave or casual leave shall be encashed. (If you want to include these leaves as well, then do so.)
5. An employee will be encashed with the balance of leave unavailed as of 31st December every year, and this will be paid along with their salary payable for the month of January.
6. An employee must have earned leave for the previous year and must have at least 10 days of leave to his/her credit after encashment.

These are some guidelines. If you want more details, send me your leave rules, and I can draft a circular to send across. This will be a free service!

Siva

First, refer to the concerned land laws to determine whether your company falls under the Factories Act, Shops Act, Mines Act, or Motor Vehicles Act. No act mentions leave encashment specifically, but they do specify the accrual of leave. Please draft the policy in compliance with the relevant provisions in the applicable act.

I feel that the suggestions provided by our knowledgeable colleagues are practices followed in their respective companies only.

Thanks,

L. N. Murty
Corporate Head - HR
GTN Industries Limited
Hyderabad

Hi,

I am attaching a sample leave card. I hope it helps you.

Regards,
Radha