Leave Encashment Calculation
I have a query regarding whether leave encashment is calculated at 26 days or based on the number of days in the month. Is there any law pertaining to this?
Accumulation and Encashment of Leaves
According to the Factories Act, an employee can accumulate leaves for a maximum of 30 days. Can we encash leaves exceeding 30 days, for example, 41 days, to an employee?
Legal Obligations for Leave Encashment
Is there a legal obligation for the employer to encash leaves on a yearly basis, or is it done at the time of exit?
Kindly reply with your feedback urgently.
Warm Regards,
Sumiksha Suri
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2I have a query regarding whether leave encashment is calculated at 26 days or based on the number of days in the month. Is there any law pertaining to this?
Accumulation and Encashment of Leaves
According to the Factories Act, an employee can accumulate leaves for a maximum of 30 days. Can we encash leaves exceeding 30 days, for example, 41 days, to an employee?
Legal Obligations for Leave Encashment
Is there a legal obligation for the employer to encash leaves on a yearly basis, or is it done at the time of exit?
Kindly reply with your feedback urgently.
Warm Regards,
Sumiksha Suri
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As per the Factories Act, a minimum of 30 earned leaves should be kept so that in case of an emergency, the employee can utilize them. If you are encashing the same every year, then in case of an emergency, how are you going to mark his/her absence in the attendance muster, whether as Absent or Leave?
Hope I have clarified your doubt.
From India, Pune
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Hope I have clarified your doubt.
From India, Pune
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Dear Prashant, Thank you for the prompt reply, but I still have a lot of doubts in my mind. I asked if there is any law prevailing that dictates leave encashments should be done yearly, or if we can follow the same process at the time of an employee's exit. Additionally, I would like to know whether leave encashment is calculated based on 26 days or the total days in a month.
Thank you.
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Thank you.
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Dear Prashant, Thanks for the prompt reply, but I still have a lot of doubts in my mind. I asked if there is any law prevailing that the leave encashments should be done yearly or if we can do the same process at the time of employee exit. Also, whether leave encashment is calculated at 26 days or the number of days in a month.
Leave Encashment Calculation
Dear Sir, You are correct that as per the Factories Act, leave encashment is calculated at 26 days. Please understand the following scenario:
On 31st of Dec 2009:
1. One person has credited Earned leave for 41 days.
2. He can demand the leave encashment only for 10 days.
3. Calculation must be made at 26 days.
4. The employer can offer him to avail leave in the next year, January 2010, but it must be approved before 31st Dec 2009.
5. If the employee and employer mutually agree, then the total EL balance can be converted in the next year, 2010.
6. The employee can then avail the leave by prior intimation and application for approval.
This means that the employer must be liable to provide the benefit of employees' dues.
From India, New Delhi
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Leave Encashment Calculation
Dear Sir, You are correct that as per the Factories Act, leave encashment is calculated at 26 days. Please understand the following scenario:
On 31st of Dec 2009:
1. One person has credited Earned leave for 41 days.
2. He can demand the leave encashment only for 10 days.
3. Calculation must be made at 26 days.
4. The employer can offer him to avail leave in the next year, January 2010, but it must be approved before 31st Dec 2009.
5. If the employee and employer mutually agree, then the total EL balance can be converted in the next year, 2010.
6. The employee can then avail the leave by prior intimation and application for approval.
This means that the employer must be liable to provide the benefit of employees' dues.
From India, New Delhi
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FACTORIES ACT-leave rules.doc
Factories Act-Sec.79-Leav e.pdf