Leave Encashment Law Inquiry
Please let me know if there is any law that addresses leave encashment. Is it required to encash earned leaves based on the basic salary or gross salary?
Thanks for your help in advance.
Regards, Ishneet
From India, Delhi
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Please let me know if there is any law that addresses leave encashment. Is it required to encash earned leaves based on the basic salary or gross salary?
Thanks for your help in advance.
Regards, Ishneet
From India, Delhi
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Hi Ishneet! In our Organization, Leave Encashment is done on the basis of gross salary. Only balance Earn Leaves / Paid Leaves can be encashed.
From India, New Delhi
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15From India, New Delhi
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Leave Encashment Policy for Government Employees
Leave encashment policy for government employees is based on Basic + DA. You can read more about it here: http://persmin.gov.in/DOPT/Acts_Rule..._I_Rule_03.pdf.
Leave Encashment for Private Sector Employees
For private sector employees, leave encashment is as per the company policy. Mostly, it is based on Basic + DA.
Regards,
Pon
From India, Lucknow
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Leave encashment policy for government employees is based on Basic + DA. You can read more about it here: http://persmin.gov.in/DOPT/Acts_Rule..._I_Rule_03.pdf.
Leave Encashment for Private Sector Employees
For private sector employees, leave encashment is as per the company policy. Mostly, it is based on Basic + DA.
Regards,
Pon
From India, Lucknow
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Thank you for your assistance, seniors. That means we can decide the same internally; no law says anything about leave encashment in private companies. It is mostly paid based on the Basic Salary. However, a question arises when an employee takes leave – their whole day's pay is not deducted. But when they are not taking leave, or are not allowed to do so due to work pressure or any other reason, the person would only receive half or 40% of the day's pay.
Regards,
Ishneet
From India, Delhi
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Regards,
Ishneet
From India, Delhi
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Leave encashment is a benefit given to employees at the time of retirement or in between. It is not correct to compare encashment with a deduction of salary for leave. Allowances are not applicable for encashing the earned/privilege leaves.
Regards,
Pon
From India, Lucknow
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Regards,
Pon
From India, Lucknow
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Ishneet, That is why we get leave encashment on the basis of gross salary. Our Company is a Pvt. Ltd. Company. Can’t comment on other Company’s Policy.
From India, New Delhi
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From India, New Delhi
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Paid leaves can only be encashed at the time of resignation. If you have 40 leaves at the time of resignation and 30 days is the notice period, then the same can be adjusted. You will get the basic pay for 10 days in this case. A 30-day salary should be given in lieu of the notice period. This policy is common in most companies. Please refer to the terms and conditions of your respective organization.
From India, Delhi
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From India, Delhi
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Leave Policy for Bangladeshi Private Companies 2013.doc