Please let me know the exact rule for encashment of Earned Leave. Some companies pay on the basis of Gross Salary and some pay on the basis of Basic + D. A. only.
Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 ) 29 October 2013
As per the Factories Act, it is :
(Basic+DA) / 26 * No of Encashment Days.
But this is flouted by most companies for their benefit as they calibrate the rule as under
(Basic+DA) / 30 * No of Encashment Days
Kumar Doab (FIN) 29 October 2013
If the establishment is Factory: Sec 79: Current per day salary in place of Basic+DA should be accounted for which monthly wages should be divided by 26.
If the establishment is Shop & Commercial Establishment: This act of respective state may be referred to: e.g Delhi: Sec23: @ Daily Average wages
If the establishment is Small Enterprise: The Small Enterprises( Employment Relations) Act 2002: chapter IV - conditions of work may be looked into.
Subrata Chakraborty (Manager (Comm.)) 31 October 2013
Thank you Mr. Ramachary, Mr. Doab, Mr. Sudhir Kumar. But When an employee is absent, his gross salary is deducted, then leave should also be encashed on Gross pay.