Is it ideal for companies to allow encashment of half of earned leaves (for example, 15 out of 30) at the end of a financial year during the service of the employee rather than allowing encashment only once an employee resigns? Year on year, the basic pay + DA of an employee increases, so would it be ideal for a company to encash a portion of EL's every year rather than all at once when the employee resigns?
From India, Hyderabad
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From India, Hyderabad
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Accumulation of Earned Leave
Accumulation of earned leave depends on the state rules in this regard. There are states that permit accumulation of 60 days of earned leave (EL). Similarly, in respect of employees covered by the Sales Promotion Employees (Conditions of Service) Act, they can accumulate up to 180 days.
Encashment of Earned Leave
Therefore, making encashment mandatory is illegal, but you can permit an employee to encash a number of leaves exceeding the maximum accumulation allowed. Since it is an employee benefit, you can enforce it. However, you should not insist that employees refrain from taking leaves, with the expectation of encashing them at the end of the year, as that would be illegal. Moreover, any refused leave will be added to the accumulation, and the accumulated leave will not count towards the maximum accumulation permitted.
From India, Kannur
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4526Accumulation of earned leave depends on the state rules in this regard. There are states that permit accumulation of 60 days of earned leave (EL). Similarly, in respect of employees covered by the Sales Promotion Employees (Conditions of Service) Act, they can accumulate up to 180 days.
Encashment of Earned Leave
Therefore, making encashment mandatory is illegal, but you can permit an employee to encash a number of leaves exceeding the maximum accumulation allowed. Since it is an employee benefit, you can enforce it. However, you should not insist that employees refrain from taking leaves, with the expectation of encashing them at the end of the year, as that would be illegal. Moreover, any refused leave will be added to the accumulation, and the accumulated leave will not count towards the maximum accumulation permitted.
From India, Kannur
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf
SC -PF judgment on No PF on Leave encashment.doc
EPFO Circular Leave Encashment.jpg