Hi Seniors, How should we calculate earned leave? on gross salary or on basic part. Regards, Ritika
From India, Noida
Acknowledge(0)
Amend(0)
3From India, Noida
Acknowledge(0)Amend(0)
Ritika.S.C: on monthly gross salary only. Quite a few firms calculate it on the basic, but that leads to employee perception issues.
From India, Mumbai
Acknowledge(0)Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Please refer to your appointment letter or your leave policy to have a better understanding. If you do not have any, please get it done on an urgent basis.
With regards to your query, my view/opinion is that if the employee would have availed the leave during employment, then the employer would have paid him his gross salary. So, for encashment, why pay basic? This is purely my view.
From India, Ahmadabad
Acknowledge(0)Amend(0)
With regards to your query, my view/opinion is that if the employee would have availed the leave during employment, then the employer would have paid him his gross salary. So, for encashment, why pay basic? This is purely my view.
From India, Ahmadabad
Acknowledge(0)Amend(0)
The enactment applicable to the establishment describes number of annual/earned leave and it’s rate.... The standing orders/leave policy can provide superior benefits but not inferior...
From India, Chandigarh
Acknowledge(0)Amend(0)
From India, Chandigarh
Acknowledge(0)Amend(0)
The number of annual/earned leave is defined in the enactment applicable to the establishment, e.g., the Shops and Commercial Establishment Act, and the rate is also defined in it. Most likely, it is based on monthly wages, i.e., gross.
The leave policy can offer superior benefits but not inferior.
From India, Chandigarh
Acknowledge(0)Amend(0)
The leave policy can offer superior benefits but not inferior.
From India, Chandigarh
Acknowledge(0)Amend(0)
I erred! I meant to say its on monthly basic only and quite a few firms calculate it on the gross and that leads to employee perception issues
From India, Mumbai
Acknowledge(0)Amend(0)
From India, Mumbai
Acknowledge(0)Amend(0)
Hi,
As some members rightly stated, when an employee takes PL for one month, their full salary - gross/net salary is paid and not the Basic. Some companies curtail this benefit by paying based on Basic.
The Leave Rules can provide superior benefits rather than inferior benefits when it comes to PL encashment, and it can be paid on the current Gross salary (which includes other applicable allowances).
I hope other senior members will provide the correct rule/practice as there is a difference in some companies paying only on Basic.
C. Neyim Khan
From India, Bangalore
Acknowledge(0)Amend(0)
As some members rightly stated, when an employee takes PL for one month, their full salary - gross/net salary is paid and not the Basic. Some companies curtail this benefit by paying based on Basic.
The Leave Rules can provide superior benefits rather than inferior benefits when it comes to PL encashment, and it can be paid on the current Gross salary (which includes other applicable allowances).
I hope other senior members will provide the correct rule/practice as there is a difference in some companies paying only on Basic.
C. Neyim Khan
From India, Bangalore
Acknowledge(0)Amend(0)
Dear Ritika.S.C,
Your query seems to me, not properly framed or your concept of leave is not clear to you. I have not understood what you want to say.
I am equally confused reading some of replies.
Is your question on encashment of leave or salary on leave granted?
Answers for both are same. You need to be in shoes of employee and you will get the answer. Will you accept the salary for leave at basis only?
To any establishment or company either Shops & Estb. Act or Factory Act or Mines Act or Docks workers Act is applicable and the earned leave is governed under those Acts. All those Acts are protecting the interests or rights of employees. Those Acts can not say to pay leave salary on Basic only.
I am giving the provisions under Factory Act and Bombay Shops & Estb Act verbatim as under:
Factories Act Section 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.
Bombay Shops and Estb. Act Section 36: Pay during leave--
Every employee shall be paid for the period of his leave at a rate equivalent to the daily average of his wages for the days on which he actually worked during the preceding three months, exclusive of any earnings in respect of overtime.
From India, Mumbai
Acknowledge(0)Amend(0)
Your query seems to me, not properly framed or your concept of leave is not clear to you. I have not understood what you want to say.
I am equally confused reading some of replies.
Is your question on encashment of leave or salary on leave granted?
Answers for both are same. You need to be in shoes of employee and you will get the answer. Will you accept the salary for leave at basis only?
To any establishment or company either Shops & Estb. Act or Factory Act or Mines Act or Docks workers Act is applicable and the earned leave is governed under those Acts. All those Acts are protecting the interests or rights of employees. Those Acts can not say to pay leave salary on Basic only.
I am giving the provisions under Factory Act and Bombay Shops & Estb Act verbatim as under:
Factories Act Section 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.
Bombay Shops and Estb. Act Section 36: Pay during leave--
Every employee shall be paid for the period of his leave at a rate equivalent to the daily average of his wages for the days on which he actually worked during the preceding three months, exclusive of any earnings in respect of overtime.
From India, Mumbai
Acknowledge(0)Amend(0)
In our view this should be on gross monthly pay. Leave encashment on basic salary is not correct approach.
From India, New Delhi
Acknowledge(0)Amend(0)
From India, New Delhi
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.