Hi all,
Firstly take the oppurtunity to Wish My Cite Hr Team a Colourfull & a Bright Holi Celebrations :)
Recently we had Excess Leaves deductions in our office were in the leaves were deducted on the basis of Gross Salary,
one of our associate asked me that generally companies take Basic salary into consideration and then deduct the leaves based on the same.
Is that if a rule is incorporated it is folowed by all the levels in the same manner, for managers, Technical Heads, Project Incharges, Junior S.E, and Trainee S.E. with respect to the Leaves deductions.
Please solve my two queries
Regards
Srilatha
From India, Hyderabad
9Firstly take the oppurtunity to Wish My Cite Hr Team a Colourfull & a Bright Holi Celebrations :)
Recently we had Excess Leaves deductions in our office were in the leaves were deducted on the basis of Gross Salary,
one of our associate asked me that generally companies take Basic salary into consideration and then deduct the leaves based on the same.
Is that if a rule is incorporated it is folowed by all the levels in the same manner, for managers, Technical Heads, Project Incharges, Junior S.E, and Trainee S.E. with respect to the Leaves deductions.
Please solve my two queries
Regards
Srilatha
From India, Hyderabad
As a norm, Leave encashment is done on basic and deduction is on the Gross. However, from HR point of view, the employee, due to his work pressure, will abstain himself from enjoying the Earned Leave eligible to him and work in the interest of the company. Then, why should the company pay him only his basic ? Suppose he goes on excess leave, then his entire gross would be deducted.
I feel this is not fair. In my company, I have strongly put this point to my management, and they have accepted it as a motivating tool for all those who give extra mandays.
A. Pinto
Fin & HR
From India, Mumbai
I feel this is not fair. In my company, I have strongly put this point to my management, and they have accepted it as a motivating tool for all those who give extra mandays.
A. Pinto
Fin & HR
From India, Mumbai
Hi everybody,
When we recruit a person we expect him to work and in lieu we pay him salary and some other benefits. If the person is absent (i.e. he is neither present, nor on off, nor on holiday and nor he is on leave), he does not work for us on a day he should have been working.Therefore why should we pay him anything. Word leave deduction is not correct. As a matter of fact the employee is absent. He was recruited to work for the Company and get paid. He was not recruited to be absent. (Unauthorized absence from work is a misconduct inviting punishment).
As regards Encashment of Leaves, good Companies want their employees to take leave, enjoy, fulfil their social commitments and take proper rest so that when employees come back to work, they are fresh and their batteries are again charged up. But still they provide for encashment because law provided for it and it can also be a source of additional income for the employee. Argument that when we do not take leave, we work more is also not correct, because a sincere and responsible employee will finish his work before proceeding on leave even if he has to sit late.
So both the situations are not exactly opposite of each other. This is why in case of absence we deduct on the basis of gross while in case of encashment we pay only on the basis of Basic pay.
If we start paying for encashment on the basis of gross as has been suggested by Pinto then employees will come to work even in situations they should be taking leave, resulting in tiredness, lethargy, mental fatigue etc. Companny's productivity will go down, mistakes will increase and ultimately Company will loose instead of gaining anything.
KKT
From India, Delhi
When we recruit a person we expect him to work and in lieu we pay him salary and some other benefits. If the person is absent (i.e. he is neither present, nor on off, nor on holiday and nor he is on leave), he does not work for us on a day he should have been working.Therefore why should we pay him anything. Word leave deduction is not correct. As a matter of fact the employee is absent. He was recruited to work for the Company and get paid. He was not recruited to be absent. (Unauthorized absence from work is a misconduct inviting punishment).
As regards Encashment of Leaves, good Companies want their employees to take leave, enjoy, fulfil their social commitments and take proper rest so that when employees come back to work, they are fresh and their batteries are again charged up. But still they provide for encashment because law provided for it and it can also be a source of additional income for the employee. Argument that when we do not take leave, we work more is also not correct, because a sincere and responsible employee will finish his work before proceeding on leave even if he has to sit late.
So both the situations are not exactly opposite of each other. This is why in case of absence we deduct on the basis of gross while in case of encashment we pay only on the basis of Basic pay.
If we start paying for encashment on the basis of gross as has been suggested by Pinto then employees will come to work even in situations they should be taking leave, resulting in tiredness, lethargy, mental fatigue etc. Companny's productivity will go down, mistakes will increase and ultimately Company will loose instead of gaining anything.
KKT
From India, Delhi
Thanks Akshay for your encouraging words.
Encashment is directly linked to accumulation. Leaves are allowed to be accumulated for two reasons: 1. Suddenly employee may have to go on a long leave (like in case of sickness) and his annual entitlement may not be sufficient to meet this emergency.
2.There may be sudden demand for money. In this case encashment helps.
Therefore generally Companies allow encashment up to 50% only so that balance leaves are in reserve for sickness etc..
Minimum accumulation as per Factories Act is 30 days.
KKT
From India, Delhi
Encashment is directly linked to accumulation. Leaves are allowed to be accumulated for two reasons: 1. Suddenly employee may have to go on a long leave (like in case of sickness) and his annual entitlement may not be sufficient to meet this emergency.
2.There may be sudden demand for money. In this case encashment helps.
Therefore generally Companies allow encashment up to 50% only so that balance leaves are in reserve for sickness etc..
Minimum accumulation as per Factories Act is 30 days.
KKT
From India, Delhi
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