Hi dear all seniors,
we are going to close a unit of our group companies. we have prepared all payment documents of gratuity, bonus and now i need to pay balanced leaves payment. please tell me this leave payment should be done on basic + DA only or on gross salary.
From India, Kolhapur
3we are going to close a unit of our group companies. we have prepared all payment documents of gratuity, bonus and now i need to pay balanced leaves payment. please tell me this leave payment should be done on basic + DA only or on gross salary.
From India, Kolhapur
Sub- Leave payment
It is not clear from your query whether your company is a commercial establishment or a factory or you have your own leave policy. So far as the law on this aspect is concerned, if you are a commercial establishment, you need to follow the computation method prescribed under the Shops and Establishment Act of your State. If you are a factory within the meaning of Factories Act, you have to follow the computation method stipulated under the Factories Act.
For example, Sec. 36 of the Bombay Shops and Establishments Act states that the employer shall pay to the employee who is discharged from service or quitting the service an amount at the rate equivalent to the daily average of his wages for the days on which he actually worked during the preceding three months, excluding overtime, for the period of leave un-availed by the employee.
For this purpose wage is defined by Sec. 2(30) of the Bombay shops Act. It adopted the same definition as that of the Section 2(vi) of the Payment of Wages Act 1936.
As regards leave encashment under Factories Act 1948 , Sec. 80 of the Act states that the wages for the un-availed leave shall be computed at the rate equivalent to daily average of the total full time earnings for the days on which he actually worked during the calendar month preceding the date of cessation of service.
While arriving at wages for the calendar month preceding the date of cessation of service, Sec.80 stipulates that dearness allowance and cash equivalent of the benefit of concessional sale of the food grains and articles made to the worker shall be included in the total full time earnings and over-time and bonus shall be excluded from it.
If you have your own leave policy and it did not prescribe any mode of computation on encashment of leave, you can take guidance from the definition of ‘wages’ under Sec.2(rr) of the Industrial Disputes Act 1947 .The definition excludes payments like bonus.
B.Saikumar
HR & labour Law Consultant
Chipinbiz Consultancy Pvt Ltd.
Mumbai
From India, Mumbai
It is not clear from your query whether your company is a commercial establishment or a factory or you have your own leave policy. So far as the law on this aspect is concerned, if you are a commercial establishment, you need to follow the computation method prescribed under the Shops and Establishment Act of your State. If you are a factory within the meaning of Factories Act, you have to follow the computation method stipulated under the Factories Act.
For example, Sec. 36 of the Bombay Shops and Establishments Act states that the employer shall pay to the employee who is discharged from service or quitting the service an amount at the rate equivalent to the daily average of his wages for the days on which he actually worked during the preceding three months, excluding overtime, for the period of leave un-availed by the employee.
For this purpose wage is defined by Sec. 2(30) of the Bombay shops Act. It adopted the same definition as that of the Section 2(vi) of the Payment of Wages Act 1936.
As regards leave encashment under Factories Act 1948 , Sec. 80 of the Act states that the wages for the un-availed leave shall be computed at the rate equivalent to daily average of the total full time earnings for the days on which he actually worked during the calendar month preceding the date of cessation of service.
While arriving at wages for the calendar month preceding the date of cessation of service, Sec.80 stipulates that dearness allowance and cash equivalent of the benefit of concessional sale of the food grains and articles made to the worker shall be included in the total full time earnings and over-time and bonus shall be excluded from it.
If you have your own leave policy and it did not prescribe any mode of computation on encashment of leave, you can take guidance from the definition of ‘wages’ under Sec.2(rr) of the Industrial Disputes Act 1947 .The definition excludes payments like bonus.
B.Saikumar
HR & labour Law Consultant
Chipinbiz Consultancy Pvt Ltd.
Mumbai
From India, Mumbai
Dear Friends
An employees is
Present in month of notice period 10 Days
Absent in month of notice period 20 Days
Leave in credit ( Cls and PLs) 15 Days
PER MONTH
BASIC PAY: 12,200/-
CCA @10% of drawn Salary 1220/-
MAX.MONTHLY COMMUTING EXPENSES (MMC) 700/-
MAX.MONTHLY MOBILE COMMUNICATION EXPENSES (MCE) 600/-
MAX.MONTHLY HEALTH & MEDICAL BENEFITS (HMB)
300/-
SPECIAL DISCRETIONARY ALLOWANCE FOR PERFORMANCE & PROFESSIONAL COMMITMENT Rs 3100/-
__________________________________________________ _____________
TOTAL 18,120/-
Do these absence of 20 Days have effect on Perks in salary breakup Like Medical and Mobile perk?
Can we adjust these absence be adjusted with CLs and Pls, so that total presence will be 25
Days ( 10 + 15 Days).?
Pls reply with as much information u can provide me
regards
Jitender
From India, New Delhi
An employees is
Present in month of notice period 10 Days
Absent in month of notice period 20 Days
Leave in credit ( Cls and PLs) 15 Days
PER MONTH
BASIC PAY: 12,200/-
CCA @10% of drawn Salary 1220/-
MAX.MONTHLY COMMUTING EXPENSES (MMC) 700/-
MAX.MONTHLY MOBILE COMMUNICATION EXPENSES (MCE) 600/-
MAX.MONTHLY HEALTH & MEDICAL BENEFITS (HMB)
300/-
SPECIAL DISCRETIONARY ALLOWANCE FOR PERFORMANCE & PROFESSIONAL COMMITMENT Rs 3100/-
__________________________________________________ _____________
TOTAL 18,120/-
Do these absence of 20 Days have effect on Perks in salary breakup Like Medical and Mobile perk?
Can we adjust these absence be adjusted with CLs and Pls, so that total presence will be 25
Days ( 10 + 15 Days).?
Pls reply with as much information u can provide me
regards
Jitender
From India, New Delhi
Hi All How additional Working days be calculated? Is it calculated on Basic only or some perk is added to it? Regards Jitender
From India, New Delhi
From India, New Delhi
Hi, EL/PL encashment would be done on Basic and DA. You can also make leave encashment on gross salary of the employee under the discretion of your management. With Regards, Priyadarshini
From India, Bangalore
From India, Bangalore
Dear Priyadarshini What should be the percentage of perks, if employee is absent for continous number of days in a month?
From India, New Delhi
From India, New Delhi
Ms. Priyadarshini,
pl refer the below clause of the Factories act, which states that Leave encashment should be equal to the daily average of his total full time earnings, exlusive of Over time & Bonus. then how come we have to consider only Basic & DA?
"80. Wages during leave period. (1) For the leave allowed to him
under 1*[section 78 or section 79, as the case may be,] a worker
2*[shall be entitled to wages] at a rate equal to the daily average of
his total full time earnings for the days on which 3*[he actually
worked] during the month immediately preceding his leave, exclusive of
any overtime and bonus but inclusive of dearness allowance and the
cash equivalent of the advantage accruing through the concessional
sale to the worker of foodgrains and other articles."
From India, Bangalore
pl refer the below clause of the Factories act, which states that Leave encashment should be equal to the daily average of his total full time earnings, exlusive of Over time & Bonus. then how come we have to consider only Basic & DA?
"80. Wages during leave period. (1) For the leave allowed to him
under 1*[section 78 or section 79, as the case may be,] a worker
2*[shall be entitled to wages] at a rate equal to the daily average of
his total full time earnings for the days on which 3*[he actually
worked] during the month immediately preceding his leave, exclusive of
any overtime and bonus but inclusive of dearness allowance and the
cash equivalent of the advantage accruing through the concessional
sale to the worker of foodgrains and other articles."
From India, Bangalore
Dear Mr.Jithendra,
As per my understandings your employee has worked for 10 days in a month as a notice period and he was absent for 20 days.
If he/She has not worked for 20 days, then employee will not be eligible to receive the salary and other perks for 20 days.
Step 1: Calculate his/her salary for 10 days = 18120/30*10=Rs.6040.00
Step 2 : Leave Encashment : If EL/PL Balance is 15 (calculate on Basic and DA,
(Basic+DA/30*15)=6010
Step 3 : Calculate outstanding Bonus any
Step 4 : Deduct notice period from the total
(Total Salary/30)*20= 12080 (to be deducted in lieu of notice period)
Total amount payable towards FFS will be Rs. (Total Salary payable for 10 days+ Rs.6010(encashable amount)+Bonus)-12080
With Regards,
Priyadarshini
From India, Bangalore
As per my understandings your employee has worked for 10 days in a month as a notice period and he was absent for 20 days.
If he/She has not worked for 20 days, then employee will not be eligible to receive the salary and other perks for 20 days.
Step 1: Calculate his/her salary for 10 days = 18120/30*10=Rs.6040.00
Step 2 : Leave Encashment : If EL/PL Balance is 15 (calculate on Basic and DA,
(Basic+DA/30*15)=6010
Step 3 : Calculate outstanding Bonus any
Step 4 : Deduct notice period from the total
(Total Salary/30)*20= 12080 (to be deducted in lieu of notice period)
Total amount payable towards FFS will be Rs. (Total Salary payable for 10 days+ Rs.6010(encashable amount)+Bonus)-12080
With Regards,
Priyadarshini
From India, Bangalore
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