Hi Team,
Please clarify if there is a legal clause to withhold or deduct the salary of an employee if he/she resigns from the organization and is having a negative leave balance at the time of relieving.
Thanks,
Yeswanth
From India, Hyderabad
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Please clarify if there is a legal clause to withhold or deduct the salary of an employee if he/she resigns from the organization and is having a negative leave balance at the time of relieving.
Thanks,
Yeswanth
From India, Hyderabad
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Dear Yeswanth,
Your query on "Negative Leave Balance" is intriguing. Let us consider two situations when salary is not paid:
a) Situation I: An employee proceeds on leave without proper approval from the Manager/HOD. On return, if the absence is not regularized then (whether some additional punishment is awarded or not), forfeits his/her pay. This deduction is on account of "Leave Without Pay" (LWP). The HR department, while processing monthly salary, deducts the salary for the absent days.
b) Situation II: An employee has pressing personal/domestic commitments. Approval by the Manager/HOD is not a problem, but he/she does not have a balanced leave. Against this backdrop, he/she applies for LWP. The HR department, while processing monthly salary, deducts the salary for the absent days.
In either situation, the question of negative leave balance does not arise since the deductions owing to absence are made while processing the monthly salary. However, from your query, one gets a feeling that you have maintained the employee's leave account similar to a Current Account that companies open with their bank. At times, banks permit an overdraft facility since it is a company account. Does your leave policy permit such an overdraft of leave?
Thanks,
Dinesh Divekar
Hi Team,
Please clarify if there is a legal clause to withhold or deduct the salary of an employee if he/she resigns from the organization and has a negative leave balance at the time of relieving.
Thanks,
Yeswanth
From India, Bangalore
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8227Your query on "Negative Leave Balance" is intriguing. Let us consider two situations when salary is not paid:
a) Situation I: An employee proceeds on leave without proper approval from the Manager/HOD. On return, if the absence is not regularized then (whether some additional punishment is awarded or not), forfeits his/her pay. This deduction is on account of "Leave Without Pay" (LWP). The HR department, while processing monthly salary, deducts the salary for the absent days.
b) Situation II: An employee has pressing personal/domestic commitments. Approval by the Manager/HOD is not a problem, but he/she does not have a balanced leave. Against this backdrop, he/she applies for LWP. The HR department, while processing monthly salary, deducts the salary for the absent days.
In either situation, the question of negative leave balance does not arise since the deductions owing to absence are made while processing the monthly salary. However, from your query, one gets a feeling that you have maintained the employee's leave account similar to a Current Account that companies open with their bank. At times, banks permit an overdraft facility since it is a company account. Does your leave policy permit such an overdraft of leave?
Thanks,
Dinesh Divekar
Hi Team,
Please clarify if there is a legal clause to withhold or deduct the salary of an employee if he/she resigns from the organization and has a negative leave balance at the time of relieving.
Thanks,
Yeswanth
From India, Bangalore
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You cannot withhold anyone's settlement. You can, however, deduct any amount that is due from the employee (notice the period not completed, for example). So, you can deduct the amount for excess leave taken.
In any case, how will withholding help or be resolved? How can he rectify the situation? Since he can't, it would amount to unjust refusal by the employer to pay his dues. Think about it from a moral viewpoint too. You should not be taking shelter of any legal provision to quietly pocket someone's dues by withholding in a manner that it never gets paid. To my knowledge, withholding means holding back until something is resolved, which means it is designed to be paid afterwards.
From India, Mumbai
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In any case, how will withholding help or be resolved? How can he rectify the situation? Since he can't, it would amount to unjust refusal by the employer to pay his dues. Think about it from a moral viewpoint too. You should not be taking shelter of any legal provision to quietly pocket someone's dues by withholding in a manner that it never gets paid. To my knowledge, withholding means holding back until something is resolved, which means it is designed to be paid afterwards.
From India, Mumbai
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Saswata,
Companies credit casual leave in the month of July for employees. Let us say 15 days credited in Jul15, which is valid till 30th June 2016. Proportionately, 15/12 days per month = 1.25 days of C/L per month. Let us say a person avails 10 days of leave in the next three months and then quits. Will the company make any deductions from the final settlement regarding the excess casual leave availed by the employee? If so, is it legal?
From India, Pune
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Companies credit casual leave in the month of July for employees. Let us say 15 days credited in Jul15, which is valid till 30th June 2016. Proportionately, 15/12 days per month = 1.25 days of C/L per month. Let us say a person avails 10 days of leave in the next three months and then quits. Will the company make any deductions from the final settlement regarding the excess casual leave availed by the employee? If so, is it legal?
From India, Pune
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I do not know which state the poster is in or whether it's an office or factory. So my answers are hobbled by that. I am making some assumptions here.
Most of the state laws, as well as the factory act, provide that you need to credit leaves on January 1 of each year. This is credited based on the number of days worked in the previous calendar year. There is no leave allowed as per law in the first calendar year of working, or in the second calendar year if in the first year he has worked less than three months. (Of course, this varies by state).
I assume in this case the company, on humanitarian grounds, allowed him paid leaves in anticipation of adjusting it in the next year. Then the employee resigned (or may be absconded). In such a case, the company is very much within its rights to deduct the salary for those days. As you rightly pointed out elsewhere, the replies we give are based on assumptions where adequate information is not available.
From India, Mumbai
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Most of the state laws, as well as the factory act, provide that you need to credit leaves on January 1 of each year. This is credited based on the number of days worked in the previous calendar year. There is no leave allowed as per law in the first calendar year of working, or in the second calendar year if in the first year he has worked less than three months. (Of course, this varies by state).
I assume in this case the company, on humanitarian grounds, allowed him paid leaves in anticipation of adjusting it in the next year. Then the employee resigned (or may be absconded). In such a case, the company is very much within its rights to deduct the salary for those days. As you rightly pointed out elsewhere, the replies we give are based on assumptions where adequate information is not available.
From India, Mumbai
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The applicable laws are very clear on this. Where an employee, at the time of relieving, has dues payable to the company, then the dues are adjustable for recovery from such amount payable towards salary, incentives, allowances, etc.
Here, a negative balance is understood as leave given in advance in good faith for compelling reasons put forth by the employee.
From India, Mumbai
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Here, a negative balance is understood as leave given in advance in good faith for compelling reasons put forth by the employee.
From India, Mumbai
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Out of my knowledge, Casual Leave is for one year and if availed, there is no provision for withholding salary unless there is a mention in their appointment letter or any circulars issued to them, or that they can avail only 1.25 CL per month.
From India, Bangalore
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From India, Bangalore
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Saswata, What if it is a company. Can you please clarify on Rao’s question. Regards Yeswanth
From India, Hyderabad
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From India, Hyderabad
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Under section 26(2)(f) of the Payment of Wages Act, deduction or adjustment of overpayment of wages can be done by the employer. Thus, at the time of relieving, such recovery can be made. Similarly, under Shops and Establishment Acts (e.g. the Delhi Act section 20(2)(vi)), overpayment of wages can be recovered in the specified manner. The applicable Act can be determined by the employer. Negative leave balance may be treated as overpayment of wages. The category of leave for which the employee has drawn excess may be specified by the queriest.
Thanks,
Sushil
From India, New Delhi
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Thanks,
Sushil
From India, New Delhi
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Dear Sushil,
My question is as follows: Will the company make any deductions from the final settlement regarding excess casual leave taken by an employee? If so, is it legal?
This query was raised in an earlier post in order to receive a clear answer, similar to the one you provided, supported by relevant sections of the law. Shri Saswata also expressed a similar opinion on the permissibility of recovery.
I am familiar with the relevant law and have witnessed instances where excess casual leave taken was deducted during the final settlement. This highlights the importance of individuals reading the statutory provisions and acquainting themselves with crucial and frequently utilized regulations.
The principle that the pathway to knowledge is through reading, learning, and continuous education is well-established.
Thank you.
From India, Pune
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My question is as follows: Will the company make any deductions from the final settlement regarding excess casual leave taken by an employee? If so, is it legal?
This query was raised in an earlier post in order to receive a clear answer, similar to the one you provided, supported by relevant sections of the law. Shri Saswata also expressed a similar opinion on the permissibility of recovery.
I am familiar with the relevant law and have witnessed instances where excess casual leave taken was deducted during the final settlement. This highlights the importance of individuals reading the statutory provisions and acquainting themselves with crucial and frequently utilized regulations.
The principle that the pathway to knowledge is through reading, learning, and continuous education is well-established.
Thank you.
From India, Pune
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