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vijay...... (HR)     26 March 2013

Earned leave calculation

1). What is the earned leaves calculation  formula as per factories act 1948 and maximum EL accumulation days.

2). What is the earned leaves calculation  formula as per Shops & Establishement Act-1988 and maximum EL accumulation days.

3). We are maintaing the attendance report through software instead of register for that we need to inform to the labour department or not.


 6 Replies

Sourav Hajra (Director)     27 March 2013

As per factories act 1948, An employee who has worked for a minimum of 240 days in a calendar year becomes eligible for earned leaves which he may enjoy that year. The ratio of earned leave is 1 day leave for every 20 days worked in the previous year. These leaves can be carried forward to the extent of 30 days.



shravan (hr generalist)     02 April 2013

for example u have total 30 el s and you last drawn salary is (basic +da) 6000/-  then =6000*30/26

Kumar Doab (FIN)     27 August 2013

>>>>> THE FACTORIES ACT: CHAPTER VIII, Annual Leave with Wages : 79. Annual leave with wages

The period is counted as Calendar year i.e. Jan-Dec……….

If employee has joined in middle of the calendar 2/3 rd of days he should be present………………..

1 EL for 20 days worked.


>>>>>Shops and Establishments Act


Look into the respective enactment as applicable in concerned state, for eligibility of leave and rate of wages ( or formulae as written by you) for leave e.g;


The Delhi Shops and Establishments Act, 1954

22. Leave.—(1) Every person employed in an establishment shall be entitled—

(a)  after every twelve months’ continuous employment, to privilege leave for a total period of not less than fifteen days;

(b)  in every year, to sickness or casual leave for a total period of not less than twelve


Provided that:

(i)  an employee who has completed a period of four months in continuous employment, shall be entitled to not less than five days’ privilege leave for every such completed period; and


(ii)  an employee who has completed a period of one month in continuous employment, shall be entitled to not less than one day’s casual leave for every month:


Provided further that a watchman or caretaker who has completed a period of twelve months in continuous employment and to whom the provisions of sections 8, 10, 11, 13 and 17 do not apply by virtue of an exemption granted under section 4, shall be entitled to not less than thirty days’ privilege leave.


(1A) (i) Privilege leave to which an employee is entitled under clause (a) of sub-section (1) or under any such law, contract, custom or usage, award, settlement or agreement as is referred to in section 3, or any part of such leave, if not availed of by such employee, shall be added to the privilege leave in respect of any succeeding period to which he is so entitled to, however, the total period of such privilege leave which may be accumulated by such employee shall not at any one time exceed three times the period of privilege leave to which he is entitled after every twelve months’  employment  under  that  clause  or  under  such  law,  contract,  custom  or  usage,  award, settlement or agreement.

(ii) Leave admissible under clause (b) of sub-section (1) shall not be accumulated.

(2)  If  an  employee  entitled  to  leave  under  clause  (a)  of  sub-section  (1)  of  this  section  is discharged by his employer before he had been allowed the leave, or if, having applied for and having been refused the leave, he quits his employment before he has been allowed the leave, the employer shall pay him full wage for the period of leave due to him.


23. Wages 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  but  inclusive  of dearness allowance.


>>>>> If it is a Small Enterprise; look into SMALL ENTERPRISES (EMPLOYMENT RELATIONS) ACT:

CHAPTER IV: CONDITIONS OF WORK :11. Annual Leave & Holidays


>>>>> Even if you are using some software you may ensure that the forms and formats used are as prescribed under corresponding enactments/labor laws.


>>>>> While some states as per their policies have granted exemption from maintaining physical record, if your establishment is not granted such exemption, you may apply and obtain such exemption from the O/o Labor Commissioner…………………or other competent authority as in your case/in your state………………… 


Maharashtra IT/ITES Policy-2009

3.1.3 Initiatives related to Laws

2)  Exemption from maintaining physical records for attendance and salary.

3)  Option for self-certification and filing of consolidated annual returns under

13 Acts administered by the Labour Department.

2. Provision for IT-ITES units to maintain employee-related records required under various

labour laws in electronic form, and to accept returns in electronic form will be made in

line with the progress of computerization in the Labour Department.



>>>>> You have been posting many one liner queries………………………..

You shall be greatly benefited if you obtain services of competent HR consultant/Labor law consultant/lawyer on permanent or retainer ship basis at your location.


This is particularly useful in case of tricky situations.

Attached File : 501448697 maharashtra itpolicy 2009.pdf downloaded: 444 times

Krishnaveni   20 February 2018

What is the meaning of working days? 

1) Attended days+Sundays+public holidays+Leaves


2) Attended days to the office (Present days to the office without leaves, Sundays and Public holidays)

Kumar Doab (FIN)     22 February 2018

Including off days, approved leave.

Raksha Joshi   22 January 2020

Hello sir,

Earned Leave Rule : Earn leave calculation : 20 Working Day( Without Holiday/Weekly Off/Leaves)= 1EL. 

As per factory act 1948, section 79, any individual will be eligible for the same after the completion of 240 days services and it will be calculated on the basis of one leave for every 20 days actual working (actual working means less Sunday and holiday). Thus this comes around 15,16. This rule is applicable for whole India and also for the industry established under factory act whether its manufacturing or service. If any company pays 30 days annual leave it means they are misinterpreting the law which also enforce 7 days minimum Casual Leave and if ESI is not applicable anyway than SL which should not less than 7days in a calendar year. Further, Casual Leave and Sick Leave lapse after completion of calender year whereas Earned Leave accumulated for next year. 

As per establishment Act, 12 casual leaves,12 sick leaves and 15 earned leaves per year. Earned leaves can be utilised only after the completion of 1 year. 

Best Regards!


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