Leave Encashment [Thread 489825]

Dear All,
Please let me know if there is any law which says about leave encashment,whether earned leaves are to be encashed on Basic salary or Gross Salary.
Thanks for your help in advance.
Regards
Ishneet

Hi Ishneet!
In our Organization, Leave Encashment is done on the basis of gross salary. Only balance Earn Leaves / Paid Leaves can be encashed.

Leave encashment policy for govt employees - Basic + DA
Read here
http://persmin.gov.in/DOPT/Acts_Rule..._I_Rule_03.pdf
For Pvt, it is as per the company policy. Mostly, it is basic+DA.
Pon

Thanks for your help seniors.
That means we can decide the same internally, no law says anything about leave encashment in private companies.
It is mostly paid on Basic Salary, but a question comes when an employee is taking a leave his whole day pay is not getting deducted but when he is not taking leave or is not allowed to take leave because of work pressure or any other reason then the person would only get half or 40% of the day.
Regards
Ishneet

Ishneet,
Leave encashment is a benefit given to the employees at the time of retirement or in between. It is not correct to compare the encashment with deduction of salary for leave. Allowances are not applicable for encashing the earned/privilege leaves.
Pon

Ishneet,
That is why we get leave encashment on the basis of gross salary. Our Company is a Pvt. Ltd. Company. Can't comment on other Company's Policy.

hi,
Paid leaves can ONLY be en cashed at the time of resignation.
If u have 40 leaves at the time of resignation and 30 days is the notice period then the same can be adjusted. you will get the basic pay for 10 days in this case.
A 30 day salary should be given in lieu of notice period.
The same is in most of the companies. Please refer to the terms and conditions of your respective org.