Employee Attendance and Leave

You need to keep track of employee’s leaves and attendance to ensure that they are productive. Employee attendance and leave management involve maintaining records of sick leaves and holidays. This ensures that payroll is completed without errors and and on time.

Employee attendance and leave data collection involved recording of approved leaves by managers, their daily attendance, each employee’s daily working hours, half days, overtime and working on National Holidays.

Leaves

Employees are entitled to leave under the OSHWC Code and the state shops and establishments acts. Most states set an annual minimum (commonly 12–18 days) in addition to public holidays. The main leave types used in payroll are described below.

Sick Leave

Sick leaves allow employees to recover from an illness and take care of their health. It is mandated by Labour Law and companies can choose eligibility criteria for same.

Casual leave

Leaves grated to employees for personal reason and short duration (1-2 days). This is dependent on Company Policy and no clear mandate is provided by the law for this leave

Maternity leave

Maternity leave is provided to new mothers for 26 weeks. Under the Maternity Benefit Act, 1961, the employer must give 26 weeks of paid leave to a woman who has worked at least 80 days in the 12 months before delivery. Up to eight weeks can be taken before delivery. The Act applies to all establishments and covers women on contract or permanent terms.

Paternity leave

Leave provided to the father-to-be. This is not a mandatory leave and depends on company policy.

Earned or Privilege Leave

Leaves provided to employee basis working for a certain duration and without any pay deduction. The number and eligibility vary based on company policy

Compensatory Leave

Leave offered to an employee who works on a non-working day.

Bereavement Leave

Leave offered to an employee in case of emergency/ unfortunate death of a family member.

Holidays

Weekly Holidays

Holiday given at end of working week (5day or 6 day). There is no specific mandate on this matter but Government states 9 hours daily working and maximum of 48 hours in a week.

National Holidays

National Holidays are the fixed holidays in India on January 26, August 15, and October 2 every year. These days are Holidays and if an employee works on these days, he/she is either offered a compensatory off or paid double wage for the day

Religious holidays

Religious Holidays given for Employees to be with their families on Key festivals. You need to provide a minimum of 9 Holidays in a year including National holidays, so 6 days are needed to be provided under this head

Loss of Pay (LOP)

When an employee avails leaves even when they have none left in their account, then salary will not be paid for these excess leaves. These leaves are termed as Loss of Pay(LOP) or Leave Without Pay(LWOP).

LOP Calculation

The calculation of Loss of Pay is based on the calendar day logic. You may also state that if an employee avails leave without approval, they will termed as LOP.

When deducting salary for Loss of Pay(LOP), the number of working days in a month impact the final deduction:

• Loss of pay when days = 30

  • Loss of Pay = INR 30,000/30 = INR 1,000 per day

• Loss of Pay when days are calculated excluding Weekends

  • 8 Saturdays and Sundays in a month
  • Effective days = 30-8=22 days
  • Loss of Pay = INR 30,000/22 = INR 1,364/ per day

You need to define the LOP policy and ensure employees are informed prior