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Lapsable Leave Encashment Policy

Document ID: HRMPL111

• Effective Date: 18-Nov-2018


• Version: 1.2

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hardcopy before using it.
Leave Encashment Policy
HRMPL111 V1.2

Table of Contents
Purpose:.......................................................................................................... 3
Scope:............................................................................................................. 3
Policy Statements:.............................................................................................. 3
Definition of Terms:............................................................................................ 6
Administrative Information:...................................................................................6
Approved By:..................................................................................................... 7

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Leave Encashment Policy
HRMPL111 V1.2

Lapsable Leave Encashment Policy


Purpose:
The purpose of this policy is to provide guidelines on encashment of lapsable leaves, for employees
on active customer projects so as to reduce the billing leakage on active customer projects. The
lapsable leaves include

1. Privilege Leaves(PL) that have to be mandatorily taken in a financial year and casual
leave(CL)/sick leaves(SL) of the financial year
2. Privilege Leaves which are more than the carry over threshold subject to the maximums
defined in the India Leave Policy HRMPL19.

Scope:
1. This policy is applicable to all employees up to band L2 (in engineering function) of Sasken
Technologies Limited India who are on active customer projects (chargeable or non-
chargeable).

2. This policy is not applicable to employees working in overseas locations, Corporate Function,
Sales, Practice or any other employees in the non-billable function(s).

Policy Statements:
1. Sasken will not discriminate in favor of or unfavorably towards any gender, group, creed or
religion. Justice and fairness will be the guiding principles governing every decision related to
this Policy. All employees are responsible to uphold the spirit of the policy, embrace
commitment to Sasken IRISE values and act to ensure compliance and avoid violations.

2. Encashment is applicable for the lapsable leaves defined under Privilege Leave (PL), Casual
Leave (CL) and Sick Leave (SL) only. No other leaves will be considered eligible for encashment.
(Note: Lapsable leave implies those leaves under the category of PL/CL/SL that cannot be
carried forward to the following year (as per the India Leave Policy HRMPL19) and hence lapses
if it is not utilized in the current year)

3. For billable employees, leave encashment is possible through the year provided

a. On the date of application, employees should be working on a project and should be


tagged to a WBS.

b. Request for PL/CL/SL encashment has to be approved by the reporting manager. Before
approval, the manager has to confirm and ensure that the employee is under a WBS at
the time of applying for encashment.

c. Eligible employees can encash their lapsable leaves in any particular month.

d. Any lapsable leave of an employee as on 31st March of every year will automatically go
towards leave encashment and will be paid out along with the April month salary.

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Leave Encashment Policy
HRMPL111 V1.2

4. Each day of PL/CL/SL can be encashed at a maximum of -

a. Rs.1,500 per day * no of approved leaves or,


b. (Annual Fixed salary less retirals/12/30) * Number of approved leaves.

5. Any number of lapsable leaves can be encashed in a year (including CL/SL/PL).

6. Lapsable leave encashment shall be considered as detailed below:

a. For Privilege leave, from the current year accrual, if the PL balance is more than seven
days (since only seven days can be carried over to the next year) at any point in time in
a year, then the leave exceeding seven days is eligible for encashment.
b. Also, based on the carry forward from previous year, if total leave balance exceeds 21
days at any point in time in a year, then leave exceeding 21 days is eligible for
encashment.(refer HRMPL19).
c. CL/SL accrued in the year is eligible for encashment

7. In the case of CL/SL, the prorated leave accumulated as on the date of availing the leave minus
the utilized leave can be encashed subject to the maximum defined. For example: If an
employee opt to encash in July and if the accrued CL / SL is four days (4 days = @ 1 day per
month from April to July) and if the employee has utilized/availed one day of leave, then
employee can encash three days as of July subject to the maximums defined.

8. Employees serving notice period are not eligible for leave encashment payouts by this policy.
For those employees, leave encashment shall be through FnF as per the India Leave Policy
(HRMPL19)

9. Leave encashment is subject to Income Tax as per prevailing rates in the current year of
operation.

10. The cut-off date to exercise and get the encashment amount in the same month is the 15 th of
the said month. Any leave encashment applied or approved after 15 th of the month shall be
processed along with the subsequent month’s salary.

11. If an employee resigns, then the PL/CL/SL will be prorated till the last working day and any
excess PL/CL/SL utilized or encashed will be deducted in the final settlement. The calculation
of recovery is as follows. Each day of excess utilized PL/CL/SL will be recovered at a maximum
of

a. Rs.1,500 per day * no of approved leaves or,


b. (Annual Fixed salary less retirals/12/30) * Number of approved leaves.

12. Leave encashment can be applied only for a full day(and not a half day) through the year but
any leave that is getting lapsed in decimals will be encashed automatically at the year end

13. Important: Leave encashment at the time of exit follows the India Leave Policy(HRMPL19)

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Leave Encashment Policy
HRMPL111 V1.2

Illustration 1

Note: Given below are 3 scenarios to explain lapsable Leave encashment

Leave Leave Max Lapsable


Leave Closing
utilise encashe carry leaves /
eligibility Balance
d d forward encashable
E=
Overall
21 Days
A B C D = A-B-C and from F = D-E
Current
year Max
7 days
OB Privilege
X 21 0 0 21 21
Leave
CY Privilege
Y 12 0 0 12 0 12
Leave
CL/SL Z 12 0 0 12 0 12
24
Z=
Total 45 0 0 33 21* (All 24 are
X+Y+Z
encashable)

* The maximum carry forward from current year is 7 days and overall 21 days for PL

Illustration 2

Max Lapsable
Leave Leave Leave Closing
carry leaves /
eligibility utilised encashed Balance
forward encashable
E=
Overall
21 Days
and
from
D = A-B-
A B C Current F = D-E
C
year
Closing
balance
Max 7
days
OB Privilege
X 13 0 0 13 13 0
Leave
CY Privilege
Y 9 1 0 8 7 1
Leave
CL/SL Z 12 5 0 7 0 7
Z=
Total 22 6 0 31 20* 8
X+Y+Z
*The maximum carry forward from current year is 7 days and overall 21 days for PL

Illustration 3

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Leave Encashment Policy
HRMPL111 V1.2

Max Lapsable
Leave Leave Leave Closing
carry leaves /
eligibility utilised encashed Balance
forward encashable
E=
Overall
21 Days
and
from
D = A-B-
A B C Current F = D-E
C
year
Closing
balance
Max 7
days
OB Privilege
X 0 0 0 0 0 0
Leave
CY Privilege
Y 12 6 2 4 4 0
Leave
CL/SL Z 12 8 2 2 0 2
Z=
Total 24 14 4 6 4* 2
X+Y+Z
*The maximum carry forward from current year is 7 days and overall 21 days for PL

Definition of Terms:

Term / Abbreviation Definition / Expansion


PL Privilege Leave
CL Casual Leave
SL Sick Leave
LWP Leave Without Pay
OB Privilege Leave Leave balance as of 1st April carried forward from previous year
CY Privilege Leave Current Year Privilege Leave eligibility from 1st April to 31st March
FnF Full and Final Settlement

Administrative Information:

1. The Company reserves the right to amend, abrogate, modify and / or rescind the policy or
any part thereof at any time.
2. The Policy will be reviewed once in two years or subject to any change due to a business
context whichever is earlier.
3. For any exigent scenarios, an exception to the policy can be raised in Iken -> MyApps ->
Exception Portal
5. In case of conflict in interpretation to this policy, decision of HR head is final.

Approved By:
Whole time Director and CFO

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Leave Encashment Policy
HRMPL111 V1.2
Revision History
Version Approval Amendment Description Author(s) Change ref. (Process
Date Change Request No.)
0.1 - New Policy for Leave Pradeep PCR 4449
Encashment Kunnangath

1.0 30-Oct-15 Policy approval Pradeep PCR 4449


Kunnangath
1.1 29-Sep-16 Brought in clarity on leave Pradeep PCR 4455
encashment for days in Kunnangath
decimals.
1.2 16-Nov-2018 Employees who have Susan PCR 4889
resigned cannot opt for Thomas
leave encashment.
Recipients of Change Notification
Target Audience E-mail ID (or the means of notification)
Sasken Technologies Limited, India STL-India-Employees@sasken.com

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