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Leave Encashment Policy
Human Resources » Policies & Samples

Chrm Message From: pOOrnima Total Posts: 31 Join Date: 13/04/2007
Rank: Executive Post Date: 16/04/2007 11:36:41 Points: 155 Location: United States

Dear All

I am looking for a leave encashment policy if any of you have it;  requesting you to please forward a copy to me for my understanding of the same.



Chrm Message From: sinhaparna Total Posts: 35 Join Date: 13/04/2007  
Rank: Executive Post Date: 16/04/2007 11:40:38 Points: 175 Location: United States

Dear Poornima,

Please find herewith our leave encashment policy.

Our policy is to accumulate 30 days leave in account and the leave which are more thatn 30 are eacashed. i.e if total leave for any person on 1st Jan is 45 then he will get an encashment of 15 days. The leave encashment policy is as under

Basic Salary divided by 26 multiply by No. of days to be encashed. In the above case it is 15 days.

Personnel Policy No: 5
Policy : Leave

Authorized by :

Managing Director
Effective date :

1st December 2003

Supersedes Policy dated:

Next Review date:

30th November 2004


To enable employees, avail leave to meet personal exigencies and recoup periodically, by taking rest and being with the family.


All the employees on the rolls of the organization shall be covered under this policy.

Policy Guidelines:

1. Leave shall be determined for the calendar year (i.e. January to December)

2. The Leave will be credited to an employee’s account on 1st of January every year. In case an employee joins after the above date, leave will be granted on pro-rata basis.

3. No employee shall be entitled to leave during the probationary period (except due to sickness/ personal exigencies). However, such probationary period preceding confirmation will be taken into account while calculating leave entitlement.

4. Intervening weekly offs and paid holidays will not be counted as part of availed leave.

5. Employee cannot avail leave as a matter of right. The Management reserves the right to refuse, revoke or curtail leave as per the exigencies of work.

6. Leave cannot be availed by any employee, unless and until the balance is available to ones credit. Exceptions can be made only by Chief Operating Officer / Unit Head and that too under extreme emergency only.

7. The employee has to retain a minimum of his leave entitlement as balance on the leave account on 31st December of every year. Any excess leave unavailed during the financial year, will be automatically encashed.( Based on one month’s basic salary for 26 working days, subject to deductions as per IT rules.

Hope this helps : )

Warm Regards

Aparna Sinha

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