I want to confirm the exact rule for the Contract labour Leave encashment - Is it advisable to pay leave with wages every month for contract labour?
Also, what would be the exact calculation base for the same.
From India, Pune
Acknowledge(0)
Amend(0)
2Also, what would be the exact calculation base for the same.
From India, Pune
Acknowledge(0)Amend(0)
Dear Pravin I am having the same problem in this regard. pls let me know whenever you would get any suggetion or feedback from the seniors. will be thankful to you. Mayur
From India
Acknowledge(0)Amend(0)
From India
Acknowledge(0)Amend(0)
The problem occurring is few people are giving it annually. Few companies are giving monthly. Some are following 5.76% of BASIC+DA. Some give on the basis of the per day payment including all salary emoluments. Which would be the exact? Also, we need to have the correct supporting document for whichever we are following.
Regards,
Pravin
From India, Pune
Acknowledge(0)Amend(0)
Regards,
Pravin
From India, Pune
Acknowledge(0)Amend(0)
Dear Pravin,
To pay EL encashment, the worker has to work for 240 days in the year. As such, you can calculate the EL at 1 leave for every 20 days and can be paid in January for every completed year. The maximum EL would be 15 days in a year, and the calculation is monthly wages divided by 30 multiplied by the number of eligible leaves for that year. This is specified in the Factory Act.
AVGN Vara Prasad.
From India, Kakinada
Acknowledge(0)Amend(0)
To pay EL encashment, the worker has to work for 240 days in the year. As such, you can calculate the EL at 1 leave for every 20 days and can be paid in January for every completed year. The maximum EL would be 15 days in a year, and the calculation is monthly wages divided by 30 multiplied by the number of eligible leaves for that year. This is specified in the Factory Act.
AVGN Vara Prasad.
From India, Kakinada
Acknowledge(0)Amend(0)
We have to follow the system which is more beneficial to workmen. Since the tenure of contract workmen is uncertain and may even cease before the eligibility period of 240 days, it is better to reimburse 1.5 days' wages per month along with monthly wages and reflect it in the wage register; there is nothing wrong with this approach. Even the eligibility period of 240 days is being recommended to be reduced to 90 days in the upcoming amendment to the Factories Act.
From India
Acknowledge(0)Amend(0)
From India
Acknowledge(0)Amend(0)
Dear All,
There is no specific period to pay EL encashment. It can be paid in any month as per company policy. Most companies will pay during March to align it with the end of the accounts.
EL is not a maximum of 15 days; it is to be a minimum of 15 days as per the employer's discretion. Employers can credit up to 30 days of leave in the register. The calculation is as follows: for example, Basic + DA/26 * number of EL encashment.
For instance, Basic 5000 + DA 500 = 5500/26 * 30. The resulting figure will be the encashment amount. For that, a mandatory 240 days are required. Let me post the details in the next message.
From India, Madras
Acknowledge(0)Amend(0)
There is no specific period to pay EL encashment. It can be paid in any month as per company policy. Most companies will pay during March to align it with the end of the accounts.
EL is not a maximum of 15 days; it is to be a minimum of 15 days as per the employer's discretion. Employers can credit up to 30 days of leave in the register. The calculation is as follows: for example, Basic + DA/26 * number of EL encashment.
For instance, Basic 5000 + DA 500 = 5500/26 * 30. The resulting figure will be the encashment amount. For that, a mandatory 240 days are required. Let me post the details in the next message.
From India, Madras
Acknowledge(0)Amend(0)
Dear Pravin,
You know very well that every rule and regulation is the same for annual leave with pay for both permanent and contract labor. As per the Factory Act 1948, earned leave (EL) is calculated after 240 days and can be taken a maximum of three times in a calendar year. In the case of encashment, it is applicable under the following circumstances:
1. Termination
2. Resignation
3. Death
4. Superannuation
Regards,
Nagendra
From India, Bahadurgarh
Acknowledge(0)Amend(0)
You know very well that every rule and regulation is the same for annual leave with pay for both permanent and contract labor. As per the Factory Act 1948, earned leave (EL) is calculated after 240 days and can be taken a maximum of three times in a calendar year. In the case of encashment, it is applicable under the following circumstances:
1. Termination
2. Resignation
3. Death
4. Superannuation
Regards,
Nagendra
From India, Bahadurgarh
Acknowledge(0)Amend(0)
Dear all,
You are not providing the right answers. Please never give incorrect information to anyone. I am telling you the correct answer.
Under the C&L Abolition Act, the contractor must pay the leave amount to every employee. This amount will be calculated for the calendar year and must be paid in January only, at any cost. Otherwise, the contractor will be penalized.
The amount must be calculated as follows:
- For Earned Leave (EL): Workingdays/20 * last basic drawn/26 (as per the Factory Act)
- Under the Shop Act: Total EL is 15, calculated the same way as under the Factory Act.
- Other: 14 leave days for Casual Leave (CL) and Earned Leave (EL), calculated as last basic/26 * 14.
Please ensure compliance with the regulations mentioned above. Thank you.
From India, Faridabad
Acknowledge(0)Amend(0)
You are not providing the right answers. Please never give incorrect information to anyone. I am telling you the correct answer.
Under the C&L Abolition Act, the contractor must pay the leave amount to every employee. This amount will be calculated for the calendar year and must be paid in January only, at any cost. Otherwise, the contractor will be penalized.
The amount must be calculated as follows:
- For Earned Leave (EL): Workingdays/20 * last basic drawn/26 (as per the Factory Act)
- Under the Shop Act: Total EL is 15, calculated the same way as under the Factory Act.
- Other: 14 leave days for Casual Leave (CL) and Earned Leave (EL), calculated as last basic/26 * 14.
Please ensure compliance with the regulations mentioned above. Thank you.
From India, Faridabad
Acknowledge(0)Amend(0)
Dear All and Mahesh Ji,
Thank you for sharing. The intention behind paying monthly leasement is to ensure that the contract laborer receives more in hand.
My query is, is this acceptable as per the law? Also, are we sure that we need to consider only the Basic + DA or all the components?
Regards,
Pravin
From India, Pune
Acknowledge(0)Amend(0)
Thank you for sharing. The intention behind paying monthly leasement is to ensure that the contract laborer receives more in hand.
My query is, is this acceptable as per the law? Also, are we sure that we need to consider only the Basic + DA or all the components?
Regards,
Pravin
From India, Pune
Acknowledge(0)Amend(0)
Dear Praveen and others,
The amount of leave payable is only in January. If you pay monthly, it is not covered under the CL Act or any other law. The employee can only avail leave every month; they cannot receive any amount. It is payable only on basic+DA, but the basic + DA must be equal to or more than the minimum wage in the state. For any other queries, discuss with me by telephone.
Thank you.
From India, Faridabad
Acknowledge(0)Amend(0)
The amount of leave payable is only in January. If you pay monthly, it is not covered under the CL Act or any other law. The employee can only avail leave every month; they cannot receive any amount. It is payable only on basic+DA, but the basic + DA must be equal to or more than the minimum wage in the state. For any other queries, discuss with me by telephone.
Thank you.
From India, Faridabad
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.