Dear Seniors,
Thanks all for the valuable inputs,
As told earlier my co deducts salary every month if the employee avails any leave and encash the same ie the paid leaves 15 at the end of the financial year.
That amount is mentioned in the CTC breakup for new joinee which i feel is wrong as the co is not paying any accumulated leaves .
I spoke to the finance person he says its correct as it is a cost to the company as the company is paying them.
Request your inputs on the same.
Thanks all for the valuable inputs,
As told earlier my co deducts salary every month if the employee avails any leave and encash the same ie the paid leaves 15 at the end of the financial year.
That amount is mentioned in the CTC breakup for new joinee which i feel is wrong as the co is not paying any accumulated leaves .
I spoke to the finance person he says its correct as it is a cost to the company as the company is paying them.
Request your inputs on the same.
No, this is a violation of the factories act.
The factories act very clearly states that each employee is entitled to paid leave of 1 day for every 20 day worked in the previous year. The company does not have the option of compulsorily accumulating this and paying it as encashing. It is required by law to pay salary for leaves till they are exhausted (subject to certain procedure specified in standing orders)
What your company is doing is giving the amount of wages for 15 days at the end of the year and then deducting wages for absence throughout the year. This is illegal. As per law the amount of encashing is like a bonus. The employee is still entitled to paid leave.
However, deducting for absence in the first year of employment is correct. The leave is accumulated/ credited to the leave account at the end of the year. But the law specifically states Callander year, not financial year
From India, Mumbai
2358The factories act very clearly states that each employee is entitled to paid leave of 1 day for every 20 day worked in the previous year. The company does not have the option of compulsorily accumulating this and paying it as encashing. It is required by law to pay salary for leaves till they are exhausted (subject to certain procedure specified in standing orders)
What your company is doing is giving the amount of wages for 15 days at the end of the year and then deducting wages for absence throughout the year. This is illegal. As per law the amount of encashing is like a bonus. The employee is still entitled to paid leave.
However, deducting for absence in the first year of employment is correct. The leave is accumulated/ credited to the leave account at the end of the year. But the law specifically states Callander year, not financial year
From India, Mumbai
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