How to Handle Leave Without Pay Calculations in a 5-Day Workweek BPO?

Dear All,

I have a problem. I am working in a BPO company.

While implementing the pay structure, I came across a problem of Leave without pay.

According to the shops & establishment act, we have to show payment for 30 days.

My company operates only from Monday to Friday.

So when a person takes, let's say, one day leave without pay, the calculation would be (salary/30)*29 days.

However, the company calculates the deduction for leave without pay on an hourly basis. For one day of leave, the calculation will be (salary/20)*19 days. Here, they consider a 5-day week, so 20 working days are taken into account for deduction.

The management in the US does not want to change the rule for the salary deduction.

Can anyone suggest a proper solution for this problem? How can I reflect this on the payslip?

Because if I show one day leave, according to the shops & establishment act, I should show (26+4) 30 days (26 normal working days as per a normal shop plus 4 Sundays). For one day of Leave Without Pay (LWP), if I show 29 days but pay salary based on the US management views, the calculation does not match.

Please suggest a practical solution for this.

Also, the act states that for every 6 days (48 hours) of presence in a week, the employee is entitled to a weekday off. This means if the employee has full attendance from Monday to Saturday, they are eligible for a weekly off on Sunday. This may vary among different companies.

Now, my argument is that we work for 40 hours a week, i.e., 5 days a week. Do we have to provide a paid weekly off? If so, can we consider (20 working days + 4 weekly offs) as 24 salary days for one month?

I hope I have made myself somewhat clear.

I am eagerly awaiting your response. Thanks in advance.

Thanks,
Samir

Yes, it is a concurrent problem that is prevailing in BPOs, and we, the people in HR, must take initiative to provide justice to the worker.

Manish

Hi,

First, the calculation of the salary based on 20 days is incorrect. It should be calculated on a 30-day basis regardless of whether you work for 20 days or 30 days. For calculation purposes, a month is considered as 30 days. Your current method of calculation violates labor laws. It is important to educate your management on this matter.

Daleep

Hi,

In my current organization, we pay according to the number of working days. In fact, for the purpose of calculation (encashment of Earned Leave, etc.), we have even fixed the number of days as 22 days.

So, if we are paying according to that and deducting accordingly, then where is the loss? I understand that it is because of ease of calculation, especially when February would have fewer days and a person takes leave, then it would result in a higher amount being deducted.

Please help me understand?

Cordially, Preet

Hi,

I suggest that you prepare a note on this and present it to Management. Include all relevant clauses of the Act in the note and then forward it. This is a better way to convince them. Make sure you have all the necessary facts.

Daleep