Earned & Casual Leave in India

Numbers of leaves entitlement in a company depends upon state you are in. Every state has different leave entitlement and leave policies which should be seen before one defines leave policy of your company. Leave policy of a company cannot be less than that mentioned by the State’s shop and establishment act.

Generally all State Legislations has common provision for major matters. They provide at least seven holidays for national and other festivals. Republic day, Independence Day and Mahatma Gandhi’s birthday are compulsory holidays. Employer and Employees had given right to decide remaining national and festival holidays.

Similarly minimum seven days casual leave and 14 days sick leave is provided to employees.
Earned leaves/ Privilege leaves : These are the leaves which are earned in the previous year and enjoyed in the preceding years. These are also known as privilege leave this can be carry forward for the quatum upto the total of three years and vary from state to state as per the shop & establishment act. These are encashable on basic salary to the employee. the condition for taking these leaves usually differ from company to company but normally in advance atleast 15 days. this can be clubbed with sick leave if sick leave is not balance with the employee. 

Casual Leave: These leave are granted for certain unforeseen situation or were you are require to go for one or two days leaves. In case of casual leave normally company's strict maximum to 3 days in a month. In these case either the person has to take the permission in advance or has to be regulated on joining. this leave is normally never clubbed with Privilege leave, but it can be clubbed with sick leave if there is is no sick leave balance. Again quantum var from state to state as per shop & establishment act, normally this leave is not encashable or never carried forward. these days to attract people or to reduce absenteeism at the end of the year the balance Casual leave in converted to PL in the leave account. 

Leave without pay: If person do have any leave to his balance and the situation warrants him to take the leave, the leave is granted by the Company as loss of pay or which may be adjusted against the future leave or as a special case the special paid leave based on the person contribution to the Company at management discretion. 

Compensatory off: These leave are granted if the person come on work during the holidays, normally compensated as leave to be taken or as an encashable option.

Leaves can be broadly divided based on its applicability to establishments covered under theFactories Act and the Shops and Establishments Act. Leave is calculated for the calendar year January to December.

LEAVE IN ESTABLISHMENTS COVERED UNDER THE FACTORIES ACT
Leaves as per Factories Act applies to all Management Staff, Executives, Supervisors, workers and contract workers as all of them fall under the definition of ‘worker’ under the Factories Act.

Type of Leave
Privileged / Earned
Casual
Sick
Maternity
Quantum per year
1 day leave for every 20 days worked in the previous year (Eg. 300 days worked = 15 days leave)
Nil
Nil
As per ESI Act OR Maternity Benefits Act
Entitlement
On working 240 days in the first  previous year
NA
NA
NA
Utilization
To apply for leave 15 days prior. Leave not to be availed more than 3 times a year
NA
NA
NA
Carry Forward
Not more than 30 days
NA
NA
NA

Other provisions
  1. If the Employee has quit or has been terminated, his earned leave balance should be paid to the employee and in case of death, to the nominee, within 2 days.
  2. Any worker who has applied for leave and has not been granted the same, such refused leave shall be carried forward without any limit.
  3. Leave can be calculated on Basic wages and DA.
  4. Leave book & Leave Register to be maintained for each worker

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