Revised Leave Encashment Policy
Due to cost-saving purposes, an employer has decided not to provide leave encashment from next year, and they have circulated a revised policy.
Impact on Salary Structure
Now, if someone joins or during the salary revision time for existing employees, will this leave encashment amount not be reflected in the salary structure?
Earlier, employees' CTC was calculated as gross - PF - PT - RSI + employer deductions (company PF, ESI + bonus + gratuity, leave encashment).
Seeking Suggestions
Please suggest. If we remove leave encashment for employees, the existing CTC will be less than before. What should we do?
One of the consultants suggested maintaining leave encashment as usual since we are providing leaves to employees.
From India, Mumbai
Acknowledge(0)
Amend(0)
Due to cost-saving purposes, an employer has decided not to provide leave encashment from next year, and they have circulated a revised policy.
Impact on Salary Structure
Now, if someone joins or during the salary revision time for existing employees, will this leave encashment amount not be reflected in the salary structure?
Earlier, employees' CTC was calculated as gross - PF - PT - RSI + employer deductions (company PF, ESI + bonus + gratuity, leave encashment).
Seeking Suggestions
Please suggest. If we remove leave encashment for employees, the existing CTC will be less than before. What should we do?
One of the consultants suggested maintaining leave encashment as usual since we are providing leaves to employees.
From India, Mumbai
Acknowledge(0)Amend(0)
Cost-Cutting Measures in Leave Policies
One of the commonly used cost-cutting measures is to stop leave encashment and allow payment only for leave availed. Since costs are incurred in both instances, the same can be included in the CTC. There is nothing wrong with this approach.
From India, Mumbai
Acknowledge(0)Amend(0)
1593One of the commonly used cost-cutting measures is to stop leave encashment and allow payment only for leave availed. Since costs are incurred in both instances, the same can be included in the CTC. There is nothing wrong with this approach.
From India, Mumbai
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Cost Cutting Chair.jpg
PF Contribution on Leave Encashment - Clarification by EPFO.pdf
SC -PF judgment on No PF on Leave encashment.doc