Hi Everyone,
We are conducting a study to propose changes to our company's current policies. Could anyone share their thoughts on how ELs are credited for employees? Will it be at the beginning or end of the month?
For an employee who joins in the middle or towards the end of the month, how does the EL credit occur? Also, when an employee leaves the company, will they be eligible to receive EL for the last month?
Thank you.
From India, Hyderabad
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We are conducting a study to propose changes to our company's current policies. Could anyone share their thoughts on how ELs are credited for employees? Will it be at the beginning or end of the month?
For an employee who joins in the middle or towards the end of the month, how does the EL credit occur? Also, when an employee leaves the company, will they be eligible to receive EL for the last month?
Thank you.
From India, Hyderabad
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Legally, an employee will become eligible for earned leave (EL) only after completing the minimum required service in the company. This period should not exceed 12 months, although the company may opt for a shorter period for crediting EL. Some companies credit EL once the employee completes the probation period, with the entitlement effective from the date of joining. Typically, all leaves are credited in January based on the attendance in the previous year. For employees who joined during the previous year, EL will be proportional to their period of service.
Monthly crediting of EL is not a common practice. However, if it would add value to the employees, it can be implemented. In such cases, the credit should be processed on the first day of the month. Employees who join by the 15th of the month will receive full credit for that month, considering one month of service, while those joining after the 15th will not receive any credit for that month. This procedure can be followed.
From India, Kannur
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4482Monthly crediting of EL is not a common practice. However, if it would add value to the employees, it can be implemented. In such cases, the credit should be processed on the first day of the month. Employees who join by the 15th of the month will receive full credit for that month, considering one month of service, while those joining after the 15th will not receive any credit for that month. This procedure can be followed.
From India, Kannur
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Basically, EL is to be computed based on the number of working days an employee puts in. Normally, it will be credited in the subsequent year in January on a pro-rata basis. You may follow the Factory rules or your company policy if you have one.
Normally, this mid-month or end-of-month situation does not arise unless you have any specific guidelines or policies in this regard.
From India, Hyderabad
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Normally, this mid-month or end-of-month situation does not arise unless you have any specific guidelines or policies in this regard.
From India, Hyderabad
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Is your company a factory, shop, or establishment?
For a factory, Section 79 of the Factories Act explains how Annual Leave with Wages is to be computed. For a factory, it is from January to December. Please read the Act along with your state rules. I will provide one example to start with; for the rest, please read and learn. It is in your own interest.
A worker/employee joins the factory on 12/1, which is the first day of December. On 1/1, which is the first of January, he will be entitled to Annual Leave with Wages (EL) if in the previous year he had worked for two-thirds of the calendar days. In this example, the calendar days are 31. For entitlement, he must have physically worked for 20 days, and if he had done so, he will get one day of EL credit.
From India, Chennai
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For a factory, Section 79 of the Factories Act explains how Annual Leave with Wages is to be computed. For a factory, it is from January to December. Please read the Act along with your state rules. I will provide one example to start with; for the rest, please read and learn. It is in your own interest.
A worker/employee joins the factory on 12/1, which is the first day of December. On 1/1, which is the first of January, he will be entitled to Annual Leave with Wages (EL) if in the previous year he had worked for two-thirds of the calendar days. In this example, the calendar days are 31. For entitlement, he must have physically worked for 20 days, and if he had done so, he will get one day of EL credit.
From India, Chennai
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you can divided the EL in 04 quarter. for example for 20 EL in a year you may give him 05 EL in each quarter subject to his working days.
From India, Rudarpur
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From India, Rudarpur
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As per my understanding, law is silent on the monthly or quarterly counting of working days for the purpose to calculate the EL. As per law, the EL shall be 01 day for each 20 worked days for an individual. Now a days most of the companies are having software for time office and salary purposes. In software’s itself provisions are made to calculate the EL as per law.
While relating the question, if an individual join in mid of the month and continues his services, his total worked days will be considered to credit his EL in the month of succeeding January.
To avail the leave, an individual shall have served for 240 days, but if an individual resigned or otherwise even before completion of 240 days, he shall be paid for the leave he earned as per legal provisions. There is no prohibition mentioned in FA for EL authorisation to a probationer because he is an employee even during probation period.
Still please read the provisions of law and consult your legal expert before taking any decision on the above subject.
Ratan Bhardwaj
VOPL Prithla
M# 8708893427
From India, Noida
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While relating the question, if an individual join in mid of the month and continues his services, his total worked days will be considered to credit his EL in the month of succeeding January.
To avail the leave, an individual shall have served for 240 days, but if an individual resigned or otherwise even before completion of 240 days, he shall be paid for the leave he earned as per legal provisions. There is no prohibition mentioned in FA for EL authorisation to a probationer because he is an employee even during probation period.
Still please read the provisions of law and consult your legal expert before taking any decision on the above subject.
Ratan Bhardwaj
VOPL Prithla
M# 8708893427
From India, Noida
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I refer to response no. 6. As I mentioned in one of my earliest posts, the new Labour Codes have reduced the eligibility requirement for leaves from 240 days of work to 180 days of work in a year. However, the quantum of leave earned will remain unchanged, that is, 1 day of leave earned for every 20 days of work. Similarly, no change has been proposed in the limit on carry forward of leaves which remains at 30 days.
From India, Aizawl
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From India, Aizawl
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