Dear All, Please share your valuable input on my query. Can we pay Leave amount to Employees in his salary in place of Leave? Is it legal, If yes, then is it part of gross or CTC?
From India, Noida
9From India, Noida
Leave is not part of salary. It is an employee benefits. Within the limits as prescribed under the law, it is a statutory right whereas any leave which is more favourable than what is prescribed under the law is just an employee benefits. The law has mandated that leave should be availed and that is why encashment of leave is not permitted during the service of an employee. Therefore, you cannot pay the leave amount by asking the employee to work without availing any leave. paying the leave amount would be construed as compensating the employee for not availing leave. It is okay so long as there is no dispute over it but in case any employee raises a dispute that the employer had refused leave though compensated by means of encashment, it would result in non compliance of law.
Any leave over and above what is prescribed under law can be put as part of CTC but no way you can put statutory leaves as part of CTC.
From India, Kannur
Any leave over and above what is prescribed under law can be put as part of CTC but no way you can put statutory leaves as part of CTC.
From India, Kannur
Madhu San, We are paying to our contractual employees leave amount on his salary monthly basis (Count in Gross ) on days basis . As per salary calculation. Is it leagly correct or not .
From India, Noida
From India, Noida
What do you mean by contractual employees? Employees on a fixed term contract, right? Normally, their unavailed leave shall be encashed as and when their period is over and the contract is terminated. That is permissible. But the issue is you cannot make a contract which says that you should not take any leave but the amount of leave (encashment) will be given as compensation for not availing the leaves. This is legally not maintainable.
From India, Kannur
From India, Kannur
As an individual I am not in favour of Pay in lieu of Leave Leave is prescribed in Law with an idea that the employees will be away from work on certain days
From India, Chennai
From India, Chennai
Hi Sushil,
Leave encashment is a monetary emolument received by the employee in lieu of the leaves entitled to him but not availed by him./her it is neither a part of the CTC nor it comes under gross pay. It can be considered as a part of termination benefits. You cannot pay leave amount to employees in lieu of leave.
Please note that there are annual leave like 12 Casual Leave. 15 Privilege or earned leave and 5 sick leave total amounting 30 days in a years.It is only the Privilege or earned leave is encashed and not the other leaves. Also, you may note that other leaves or not carried forward except for Privilege leave.
This being the case how did you come to a conclusion that you can pay leave amount in lieu of leave is not universally accepted.
From India, Bangalore
Leave encashment is a monetary emolument received by the employee in lieu of the leaves entitled to him but not availed by him./her it is neither a part of the CTC nor it comes under gross pay. It can be considered as a part of termination benefits. You cannot pay leave amount to employees in lieu of leave.
Please note that there are annual leave like 12 Casual Leave. 15 Privilege or earned leave and 5 sick leave total amounting 30 days in a years.It is only the Privilege or earned leave is encashed and not the other leaves. Also, you may note that other leaves or not carried forward except for Privilege leave.
This being the case how did you come to a conclusion that you can pay leave amount in lieu of leave is not universally accepted.
From India, Bangalore
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