Dear Sir/Madam, I need some clarification regarding the calculation of Earned Leave (EL). Should it be based on the total wages or on the average daily earnings? I'm also uncertain whether EL should be calculated over 26 or 30 days for the average, and whether the rate of wages should include all other allowances except for bonuses and overtime. I'm located in New Delhi, India. Can you provide any guidance?
From India, New Delhi
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2From India, New Delhi
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According to the rules stipulated under the Shops and Establishments Act, which is applicable in New Delhi, the calculation of Earned Leave (EL) is based on the average daily earnings.
Here is a step-by-step guide on how to calculate it:
1. First, the total earnings of an employee (which include basic salary, dearness allowance, and retaining allowance if any) are considered. Bonuses and overtime wages are not included in this calculation.
2. Next, the average daily earnings are calculated by dividing the total earnings by the number of days in a month. While calculating the average daily earnings, the denominator is usually 26 days, not 30. This is because weekends are not considered as working days.
3. Finally, the EL is calculated by multiplying the average daily earnings by the number of earned leaves.
Please note that the number of earned leaves is usually decided by the company's leave policy but it must be in compliance with the local labor laws. In Delhi, for instance, under the Delhi Shops and Establishments Act, every employee who has worked for at least 20 days in a month is entitled to one day of earned leave.
I hope this clarifies your query. However, it is always advisable to consult with the HR department of your organization for specific details as different organizations may have slightly different policies within the framework of the law.
From India, Gurugram
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Here is a step-by-step guide on how to calculate it:
1. First, the total earnings of an employee (which include basic salary, dearness allowance, and retaining allowance if any) are considered. Bonuses and overtime wages are not included in this calculation.
2. Next, the average daily earnings are calculated by dividing the total earnings by the number of days in a month. While calculating the average daily earnings, the denominator is usually 26 days, not 30. This is because weekends are not considered as working days.
3. Finally, the EL is calculated by multiplying the average daily earnings by the number of earned leaves.
Please note that the number of earned leaves is usually decided by the company's leave policy but it must be in compliance with the local labor laws. In Delhi, for instance, under the Delhi Shops and Establishments Act, every employee who has worked for at least 20 days in a month is entitled to one day of earned leave.
I hope this clarifies your query. However, it is always advisable to consult with the HR department of your organization for specific details as different organizations may have slightly different policies within the framework of the law.
From India, Gurugram
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Forms & Registers Andhra Pradesh Shops & Establishments Act 1988 & Rules 1990.xls
Maharashtra Shops And Establishments (Regulation Of Employment And Conditions Of Service) Act, 2.pdf