Is It Fair to Exclude Sundays from Monthly Salaries? Seeking Advice on Salary Deductions

Dear All,

Good Afternoon.

One of my friends is working as a staff member and receiving a salary that excludes Sundays and the weekly off days. Rates are fixed for 26 or 27 days, even though he is paid monthly. Are there any regulatory requirements regarding this practice? Can it be implemented as a standard procedure?

The main issue arising from this practice is the deduction of a full day's salary for unpaid leave, which exceeds the actual monthly salary.

Please provide guidance on how to prevent such practices.

Regards,
Puneet

Dear friend,

In fact, this is the correct practice. Twenty-six days as a standard practice will be better. It cannot be 26 or 27 days. Once you follow this, then you also should not count the leave falling on Sundays. If a person takes leave, say, for seven days, then it must be Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, and Monday, and he will resume work on Tuesday.

Siva

Dear Siva,

Thank you for your reply. The question at hand is whether it is permissible to calculate the payment based on 26 days instead of 30. In both my current and previous organizations, we have always computed salaries based on 30 days. While Sundays are accounted for in the 30-day calculation, opting for 26 days would result in Sundays being unpaid.

I am seeking advice on how to address this situation effectively.

Regards,
Puneet

Dear Friend,

Again, at what level are you looking? If it is at the workmen level, keep it at 26 days. This helps because you don't call them on Sundays, and even if you do call them, you need to pay overtime. For others, as a rule, we follow 30 days. These supervisors should not feel that they are not paid on days when they are called to work, and we don't pay overtime for them. Even if we give them compensatory time off, it is easier to give one day off as they are already paid for that day.

Follow 26 days for workmen for whom you pay overtime. Follow 30 days for supervisors and above. Do not have two rules like 31 days, 30 days, and 28 days. Follow one rule of 30 days for calculating per day salary. I do not need to repeat here that for gratuity, we always follow 26 days.

Siva

Dear Friend,

According to the Labour Laws/Rules of the Government of Tamil Nadu, the basic wages of an employee are to be calculated as follows:

P/(N-S+H) x No. of days present

Where:
P = Monthly Gross Pay
N = No. of days in a month
S = No. of Sundays in a month
H = No. of Holidays in a month

Example:
Monthly Gross Pay = Rs. 3500/-
No. of days in the month: = 31
No. of Sundays = 5
No. of Holidays = 1
No. of days present (the employee on duty) = 25

With regards,
S. Krishnamoorthy

Calculation:
= 3500 / 31 - (5 + 1) x 25
= (3500 / 25) x 25
= 3500

Dear Mr. Krishnamurthy,

It is an interesting piece of information. However, is it intended for government employees or industrial employees? Is there any official notification regarding this? Obviously, such a procedure cannot be implemented solely through a notification.

I would appreciate it if you could provide more insight into this subject.

Siva

Dear Shri Siva,

This has been notified by the Government of Tamil Nadu while announcing the minimum wages for industrial employees, including those covered under the Tamil Nadu Shops & Establishment Act.

Regards,

S. Krishnamoorthy

Puneet,

There is no norm as such, but there are a few companies that pay overtime (OT), which includes the extra time the employee has worked and night shift allowances. These are the allowances that the employee will be receiving. However, salaried employees are paid for the days they have worked.

Regards,
Vivek

Thank you very much, sir.

I agree with Sh. Siva that the salary should be paid for the full days of the month, i.e., 30 or 31 (in the case of Feb. 28 or 29 days), to the staff members. My question pertained to the staff personnel only, as in the worker category, we pay monthly as well as daily wages.

What I would like to know is whether there is any legal obligation to calculate the pay for 30 or 31 days for staff members in a month. Just as there is a Minimum wage notification for workers, or the Government provides notifications for wage calculation, is there anything similar regarding salary calculation?

Once again, thank you very much for your valuable support.

Regards,
Puneet

Hi,

There is no direct legality in this, but the Shops and Establishment Act states that you have to pay for a weekly off after every 6 working days, and if the employer is doing so, then it is not illegal. However, practically, it is not possible to calculate the salary for 26 or 27 days because of this. So, if he is working for 26 days, he will get a salary for 30 days.

The only concern in this is that he should be on the payroll of the company or any other organization (Contractor as well). If you look at the Shops Act, you will notice that it is based on monthly calculations. So, if the person is given it based on some other calculations, there are chances of making mistakes and creating illegality indirectly.

This is what I think about it. Well, let me know further regarding this if you get some info.

Bye,
Regards,
Sandeep K.

As per Sandeep, there is no hard rule stating that salary should be paid for 26 days or 30 days. However, if you follow the Factories Act or Shops and Establishments Acts, there are provisions for granting one day off after every 6 days of work. It can be interpreted as "no employee shall work for more than 10 days without a day of rest" implying the employer must provide a day of rest with pay. Therefore, it is 30 days' pay and not 26 days, regardless of the worker or supervisor.

In cases where relevance to daily rates of salary/wages is mentioned in the law, the calculation is based on 26 days and not 30 days. Under the Payment of Gratuity Act, the daily rate of wages is determined by dividing the monthly salary by 26, not by 30. This calculation applies to all, irrespective of designation and salary. This method results in a higher gratuity amount compared to using 30 days.

When an employee takes leave without pay, the deduction from the salary is based on the same average rate of salary. This rate also applies to overtime wages. Therefore, if you opt for 30 days, it applies to all except those who are daily rated.

Regards,

Madhu.T.K

Hi Gurus,

I just want to know about my company's structure as they are paying 22 days in a month because we work only 5 days a week. By paying for 22 days, what benefits is the employer getting? What are the pros and cons for the employees?

Thanks in advance!

RajeshR

If your organization is paying for 22 days, then the average rate will be the sum paid monthly divided by 22, which will be higher when compared to the average daily rate found after dividing the same by 30/26. When calculating overtime (if applicable) or encashment of leave, the amount receivable by the employee will be higher when 22 days are taken, whereas when an employee absents himself without pay, the loss of pay will be high. Therefore, it is always better to have a common number of days which will be applied in all circumstances. As mentioned in my last post, it is mandatory that an employee be given a weekly off. Then why should we not consider it as 30 days instead of 26 or 22?

Regards, Madhu.T.K

Certainly! Here is the corrected version of your text with proper spelling, grammar, and paragraph formatting:

"What about PL or EL? If EL (Earned Leave) is given for 30 days in a year, what is the basic rule in calculating EL? Whether CL is included in this 30 days leave or not? If CL is not included, how do they calculate the EL?"

Hi Gurus,

For gratuity calculation, 26 days are taken into consideration, but for calculation generally, it is 30 days only. In the case of daily wage workers, it is taken as 26 days as they are on daily wages. However, in other cases, it has to be 30 days. Sundays are paid holidays.

In terms of overtime (OT) calculation, it is practical and profitable to consider it as 30 days.

Regards,
Rajeev

Hi!

I was reading the discussion threads on this topic with curiosity because I thought I would find new ways of understanding the rationale behind the "monthly salary factor" and the "daily wage rate computation" basis. But, it looks like the relevant labor laws and practices in India relative to this subject matter are the same everywhere. Moreover, it seems that many HR practitioners do not have solid backgrounds on Compensation Management — hence the rise of such questions/queries.

As we all know, the basic principle in compensation is: NO WORK, NO PAY!

There is no exception to this rule, except the policy on "earned leave credits" where the company has promised the employee to pay even if they don't work.

The number of working days and hours in a week is dependent on the country where your company is located. This matter is dependent on both culture, legal laws, and industry where the company belongs. Hence, the actual workdays can fluctuate from a low of four (4) days to a high of seven (7) days per week. Some countries in Europe are using the four (4) day workweek (with some using the compressed workweek scheme) while many utility companies (e.g. power plants) worldwide work on a seven (7) day workweek under a compressed work schedule where rest days are lumped together at the end of their shift schedule. Many countries use the normal five (5) days workweek with an eight (8) hours work per day.

The issue of which factor should be used is again the prerogative of the company unless there is a specific regulation on the matter by your country's labor law. But, I don't think that governments will mess with this issue because the lower the factor used, the better the pay policy becomes for the employee. The higher the factor, the lower the daily and hourly rate for the employee.

Why?

As already mentioned, when a company uses a lower factor, e.g., 26 days (vs 30 days), the resulting daily rate for the employee will be much higher than if the company uses the latter (30 days). As we all know, the daily rate becomes the basis for the hourly rate. And the hourly rate becomes the basis for overtime (OT) pay.

Hence, many companies I know use the 26 days factor even if they only have a five (5) days workweek. Ideally, companies adopting this work schedule should use only the twenty-two (22) or twenty-three (23) days factor. But they won't, and their explanation is that they are paying the rest day. For seniors like us, we know that there is a lot of BS in this rationale. The deeper and real reason is the daily and hourly rate that would result when the factor is lowered. The two or three days factor difference is a lot of money, especially for companies with thousands of employees.

What employees (and HR) should pay attention to is the distinction between the concepts "gross," "basic," "guaranteed cash," and "gross compensation." You would do well to let the company define these concepts from their points of view before you compute your advantages, especially when deciding whether to transfer from one company to another.

Best wishes and God bless.

Ed Llarena, Jr.
Managing Partner
Emilla Consulting

(landline)
(mobile)

As per my knowledge, monthly salary calculation is as follows:

Fixed Salary / No. of days in that month x No. of days in that month.

For example, if the fixed salary is Rs. 10,000, then 10,000 / 31 x 31 = 10,000.

For instance, if the salary is for 20 days = 10,000 / 31 x 20 for the month with 31 days.

Similarly, for a month with 30 days: 10,000 / 30 x 20 for the month with 30 days.

And for a month with 29 days: 10,000 / 29 x 20 for the month with 29 days.

The per day salary calculation is = Fixed Salary / No. of days in that month.

Some people are calculating the salary by dividing it by 26 days every month, which is wrong as per my knowledge.

Thanks & Regards,
G. Srinivasa Ramanujam
Officer - Admin/HR

This thread reminds me of the story of six blind men touching an elephant and interpreting it in their way: one who touches the legs says, "It's like a pillar"; one who touches the tail says, "It's like a rope," and so on.

It's amazing to find such a variety of responses from members who are practicing HR in various companies. It seems most of the members are not well-informed about even such basic facts. How can we call ourselves "Professionals"?

Dear friend, the authentic answer to this type of question lies in the various Labour Acts. Kindly take some time off and study the relevant sections on Leaves, Leaves with wages, Working hours, etc.

HRM practice badly needs standardization and an Apex Statutory Body like the ones for other professions such as CA, ICWA, Engineers, Doctors, Architects, Lawyers, etc. I hope Madhu Sir will agree with my opinion.

Warm regards.

Legal Implications of Denying Weekly Offs

If the company does not provide a weekly off or denies paying salary for a weekly off, it is a contravention of the law. For reference, please consult the respective state law. For ready reference, I can mention one act, such as the Punjab Shops and Establishment Act for Gurgaon.

Regards

Dear HR team,

I am currently working with XYZ company on third-party payroll and am planning a short leave for personal reasons. I have emailed my HR team requesting leave, and they have informed me that while they will grant the leave, it will be marked as LWP (leave without pay).

I am confused as to why I am not entitled to paid leave. I work in a manufacturing company where the only day off is Sunday, and I work the entire week without taking any personal leave. I am a full-time employee at XYZ company.

Could you please explain to me why this leave is considered LWP? They have stated that I have no leave balance and that I only have Sundays off. Why am I not entitled to any other leave or benefits?

I would appreciate it if you could share your insights on this matter and advise me on what steps I should take. The employee has emailed me with these concerns and is seeking assistance.

They wish to take leave without any deduction from their salary.

Thank you.