Dear All,
We are in a process of reformulating our leave policy. So need suggestions and input on "how important it is to pay leave encashment against earned / privilege / yearly / annual leave" in case the leaves are neither lapsed nor utilized by the employees” as currently it is entirely management’s discretion to allow the encashment of leaves to some employees who did not take a single earned leave in the past year(s).
And also at the time of settlement should a company pay the encashment for the earned leaves to the resigned-employee.
Your input is really important….
From China, Guangzhou
5We are in a process of reformulating our leave policy. So need suggestions and input on "how important it is to pay leave encashment against earned / privilege / yearly / annual leave" in case the leaves are neither lapsed nor utilized by the employees” as currently it is entirely management’s discretion to allow the encashment of leaves to some employees who did not take a single earned leave in the past year(s).
And also at the time of settlement should a company pay the encashment for the earned leaves to the resigned-employee.
Your input is really important….
From China, Guangzhou
Dear Anjum
Leave encashment depends upon the philosophy of management on leave.
But you must check whether there is any statutory liability for encashment of leave in your Law of Land (Labour laws).
While making a policy, Objective of the policy must be very clear and then comes the implementation of policy.
I have no knowledge of labour laws applicable in Pakistan but in India , under The Factories act it is optional for both employer and employee to encash or get the balance of earned leave encashed. At the same time this leave must be earned by employee while attending the office/ factory.
Further for encashment management has to decide the basis of salary on which , it is to be encashed it may be Basic pay or Basic pay with Dearness Allowance or Basic pay along with all other allowances currently being paid as monthly salary. Here we adopt all these methods depending upon the thought of management and cost to company.
Generally encashment of earned leave is being made in all the cases of resignation. But some of the establishments has adopted discretionary option to the same.
In order to break monotony of work or to minimise the stress level of their employees some of the organisations have adopted policy of compulsory leave. Travel expenses are being borne by employers to motivate the employees proceeding on compulsory vocation.
Please keep in mind while drafting the policy that some of the employees will keep on accumulating the leaves till their retirement or resignation. Though most of the employers feel happy with low absenteeism but there are cases where performance level has gone down due to this.
In Europe and Japan policy of compulsory vacation has been accepted by most of the employer's and here in India some of the big industrial houses and establishments have started adopting these practices.
So from motivational point of view encashment upto a level is good but beyond that money is not every thing.
Leave is must as every individual requires time for the family. So you can also choose for compulsory availment of leave and encashment of leave on % basis.
Regards
Anil Anand
From India, New Delhi
Leave encashment depends upon the philosophy of management on leave.
But you must check whether there is any statutory liability for encashment of leave in your Law of Land (Labour laws).
While making a policy, Objective of the policy must be very clear and then comes the implementation of policy.
I have no knowledge of labour laws applicable in Pakistan but in India , under The Factories act it is optional for both employer and employee to encash or get the balance of earned leave encashed. At the same time this leave must be earned by employee while attending the office/ factory.
Further for encashment management has to decide the basis of salary on which , it is to be encashed it may be Basic pay or Basic pay with Dearness Allowance or Basic pay along with all other allowances currently being paid as monthly salary. Here we adopt all these methods depending upon the thought of management and cost to company.
Generally encashment of earned leave is being made in all the cases of resignation. But some of the establishments has adopted discretionary option to the same.
In order to break monotony of work or to minimise the stress level of their employees some of the organisations have adopted policy of compulsory leave. Travel expenses are being borne by employers to motivate the employees proceeding on compulsory vocation.
Please keep in mind while drafting the policy that some of the employees will keep on accumulating the leaves till their retirement or resignation. Though most of the employers feel happy with low absenteeism but there are cases where performance level has gone down due to this.
In Europe and Japan policy of compulsory vacation has been accepted by most of the employer's and here in India some of the big industrial houses and establishments have started adopting these practices.
So from motivational point of view encashment upto a level is good but beyond that money is not every thing.
Leave is must as every individual requires time for the family. So you can also choose for compulsory availment of leave and encashment of leave on % basis.
Regards
Anil Anand
From India, New Delhi
Dear Anil, Thank you for such a comprehensive and prompt reply. Got some good points from your reply. Thanx again.... Still looking forward for more replies from HR professionals N gurus.
From China, Guangzhou
From China, Guangzhou
Hi
I want help regarding PF Deduction on leave encashment. I have a following case :
I have Four earning heads for leave encashment
Basic - Pf Deduction is applicable.
Hra - Pf deduction is not applicable
Conveyance-Pf Deduction is not applicable
Unifrom Allow-Pf deduction is not applicalbe
Limit of Maximum Pf wage 6500 is applicalbe
Case 1 : If employee already have basic more than 6500. Is PF will Deduction on leave encashment.
If yes, on which part pf will deduction only on basic or all heads.
Case 2 : If employee have basic less than 6500. Is PF will Deduction on leave encashment.
If yes, on which part pf will deduction only on basic or all heads.
Case 3 :
If employee have got increment during the year, & basic will increse up to 6501 how the pf will deduct ?
It will consider the limit of EPS wage 6500 or not, means what contribution from employer side will made in EPF & EPS
Please Help
I want help regarding PF Deduction on leave encashment. I have a following case :
I have Four earning heads for leave encashment
Basic - Pf Deduction is applicable.
Hra - Pf deduction is not applicable
Conveyance-Pf Deduction is not applicable
Unifrom Allow-Pf deduction is not applicalbe
Limit of Maximum Pf wage 6500 is applicalbe
Case 1 : If employee already have basic more than 6500. Is PF will Deduction on leave encashment.
If yes, on which part pf will deduction only on basic or all heads.
Case 2 : If employee have basic less than 6500. Is PF will Deduction on leave encashment.
If yes, on which part pf will deduction only on basic or all heads.
Case 3 :
If employee have got increment during the year, & basic will increse up to 6501 how the pf will deduct ?
It will consider the limit of EPS wage 6500 or not, means what contribution from employer side will made in EPF & EPS
Please Help
Hi,
There has been extensive discussions on leave policy. Just go on quick search on top left hand side corner, type leave policy & u will see all the discussions with answers to ur questions.
I am sure this will answer ur questions more accurately & fast.
Regards,
Pooja
From India, Pune
There has been extensive discussions on leave policy. Just go on quick search on top left hand side corner, type leave policy & u will see all the discussions with answers to ur questions.
I am sure this will answer ur questions more accurately & fast.
Regards,
Pooja
From India, Pune
Dear Manoj
As you yourself have declared "Limit of Maximum Pf wage 6500 is applicalbe"
so in case number 1 and 3 the limit comes into force. It is very clear when a limit has been prescribed then beyond the limit is alway discretion. You can deduct and pay more subject to consent of employee.In case number 3 if wages exceeds the limit by way of incrment in basic salary or by any other reason again you can opt for deduction and deposit upto basic salary of Rs.6500.00
In case number 2 if salary is less than 6500 and if you are encashing leaves then again you have to follow the limit principal. If it is within the limit deduct as applicable nad if otherwise then again follow the limit principal.
In all the case please try to under stand the objective of the law and then act accordingly. This will help you in future.
Regards
Anil Anand
From India, New Delhi
As you yourself have declared "Limit of Maximum Pf wage 6500 is applicalbe"
so in case number 1 and 3 the limit comes into force. It is very clear when a limit has been prescribed then beyond the limit is alway discretion. You can deduct and pay more subject to consent of employee.In case number 3 if wages exceeds the limit by way of incrment in basic salary or by any other reason again you can opt for deduction and deposit upto basic salary of Rs.6500.00
In case number 2 if salary is less than 6500 and if you are encashing leaves then again you have to follow the limit principal. If it is within the limit deduct as applicable nad if otherwise then again follow the limit principal.
In all the case please try to under stand the objective of the law and then act accordingly. This will help you in future.
Regards
Anil Anand
From India, New Delhi
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