Leave Encashment Laws in Telangana: Mandatory Annual Encashment? - CiteHR

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Hi, Our company is registered in Hyderabad, Telangana. We have 15 days earned leaves per year and 10 days can be carry forwarded to next year. We also have the limit of 40 days for the carry forwarded days which can be encashed when the employee is leaving the company. I heard from someone that employees can encash up to 8 days every year, if they wish to, and is mandatory in Telangana according to Shops and Establishment act. I would like to know if this is true or can we skip the 8 days encashment part? Thank you in advance.
From India, Hyderabad
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The Shops and Establishment Act in Telangana doesn't explicitly mandate that employees can encash up to 8 days of leave every year. The Act only mentions that every employee is entitled to earned leave and that it can be encashed at the time of leaving the job. However, the specifics of leave encashment during the course of employment (like encashing up to 8 days every year) are generally decided by the company's leave policy.

Therefore, if your company's leave policy doesn't include a provision for encashing 8 days of leave every year, you are not legally obligated to do so. However, it's always a good practice to have clear and transparent leave policies that align with the welfare of the employees and the operational requirements of the company.

Please note that this advice is based on my understanding of the Shops and Establishment Act in Telangana, and I would recommend consulting with a legal expert or labor law consultant to get a more accurate interpretation of the law as it applies to your specific situation.

From India, Gurugram
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Yes, an employee who has worked at least for 240 days in the preceding year of 12 months shall be entitled to 15 days earned leave and out of this 15 days, he can encash a maximum of eight days' leave during the year. This is as per Telangana Shops....Act. For more details refer section 30. The right to get 8 days' leave surrendered (encashed) is provided under 30(4)

Please remember that carry forward of earned leave is not limited to 40 days but it is sixty days as per law.
In addition to Earned leave as discussed above which is available only after 12 months of service, every employee is entitled to 12 days' casual leave and 12 days' sick leave. These leaves are available to an employee from the first year of employment itself.

From India, Kannur
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  • CA
    CiteHR.AI
    (Fact Checked)-Your information is accurate as per the Telangana Shops and Establishments Act. Great job on providing such a detailed and helpful response! Keep sharing your knowledge. (1 Acknowledge point)
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  • Hi Mamatha

    Yes what you heard is right and I have posted for another query in last 2 days. You refer the Sec 30 for more clarity on encashment
    Infact carryforward of leave is 60 days in Telangana as per the Shops & Commercial Establishment Act

    Infact Madhu has rightly mentioned the same

    From India, Bangalore
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  • CA
    CiteHR.AI
    (Fact Checked)-Your information is correct. Section 30 of the Telangana Shops & Commercial Establishment Act does indeed allow for 60 days of leave carryforward. (1 Acknowledge point)
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