Pagar Khata -Staff Payroll & Attendance Management
A leave simply means a day off from the office work apart from the holidays employees are entitled to. It is not required by you to work on all the seven days of the week to earn your salary. Also, you need not work on all working days even, according to the leave policy, to get your salary. You are also allowed additional leaves under certain circumstances.
Many years ago, employees weren't given the privilege of paid leaves, but nowadays, all the employees are given the opportunity for paid leaves. Presently, leaves are one of the best-sought benefits in a job after the healthcare benefits. There are various types of leaves an employee can benefit from. The laws passed by the state governments guide all different kinds of leaves to be granted in a year. Some of these granted leaves expire at the end of the calendar year, while some are carried to the next year. In case of any unavoidable circumstances, if an employee has exhausted all their leaves and still wants more leaves, then they will have to suffer a pay cut for the number of days they want off. This is called at some places, leave without pay or LWP leave.
Being a vital function of the benefits administration, leave management is needed for various reasons. Some of them are discussed below:
Many unwanted situations come up without the presence of a proper leave management process. Any employee may require a better practice if they come across the scenarios mentioned below:
The management of a company is responsible for overseeing the employee's leaves according to the company's leave policy. It is required not only to comply with the law but also to improve employee morale, employee productivity, engagement, and employer branding. Leave management has three broad areas:
There are no written leave policies in many small businesses. Without properly documented leave policies, it is tough to enforce the guidelines, which becomes the primary cause of our discussed problems.
Designing a good employee leave policy requires information about the statutory rules relevant to the location of your industry. The leave policy needs to look for the business interests, employee engagement, and needs while keeping compliance in mind. Designing a leave policy requires various factors like:
The employees working in an organisation are entitled to many different types of leaves, requiring a set of different policies.
The government has made it mandatory for certain leaves to be provided voluntarily by the organisation. Some of the most common leave types are mentioned below:
There are certain sets of rules that are developed to govern the leave policy. The rules are either set by the government or by the organisation. The rules cover many aspects like the number of leaves to be granted each year, eligibility of leaves, how frequently the leaves are to be granted, carry forwarding of the leaves, approval process, and many others.
The state governments declare the official public holiday list at the end of each year. Besides the paid leaves, organisations also have to give their employees around 8 to 14 holidays aligned with the list declared by the government. The entire organisation remains closed on public holidays besides the leaves that the employees take according to their convenience.
The weekend policy is the one that defines the weekdays off for an organisation. These also need to comply with the laws passed by the state governments.
The writing of the leave policies may be a one-time deal, but its enforcement is a full-time HR role. The admin is required to handle, as a part of their leave administration, the following responsibilities:
The leave account of an employee deals with the leave balance. When compared to a bank account which only deals in bank balance, the leaves account needs to keep track of all different types of leave like sick leave, earned leave, etc. Similarly, when an employee earns a leave, the leave count goes up, and when an employee avails leave, the leave count goes down.
There are various leave transactions like grant(-), avail(-), lapse(-) and encash(-) possible which increase or decrease your leave count.
It is the HR admin’s responsibility to diligently keep a record of the leave transactions of an employee. The admin also needs to keep track of the net leave balance of the employee as the leaves balance must tally with the employee's leave transaction. Many leaves can be taken annually or monthly, but certainly, leaves have no leave balance and can be taken under specific circumstances.
According to the statutory laws, the employees are entitled to a specific number of leaves for their earned leave, sick leave, etc., annually. The leave allowance is allotted for the whole year or monthly, which most companies prefer as it reduces the final settlement process when an employee decides to quit the company. If the leaves are allotted monthly, an employee may take more leave but not run out of annual leave balance. In such a case, the employer may allow the employee to overdraft and run a negative balance.
Many leave transactions happen in a leave year. Some companies follow the calendar year as their leave year, while some follow the financial year as their leave year.
The leave balances are carried forward to the next year at the end of the year. However, there is a limit to the number of leaves that can be carried to the next year.
What happens to the leave that cannot be carried to the next year? The leaves lapse or are encashed depending on the leave policy of the company.
The employees may have many queries related to their salary or other benefits. Similarly, the employees need knowledge, information, and support to manage their leaves. Accurate reporting and services are required in such cases. Failing to do so may lead to loss of productivity or mistrust by the employee.
Employees can avail of Leave without pay in cases when they have exhausted all their leave balance but need to take leave. Many organisations work on strict timings and penalise their employees for coming late to work or being absent in an unauthorised way. Loss of Pay (LOP) or leave deduction is a type of penalty imposed. In bigger organisations, HR needs to provide LOP leave deduction advice from time to time to avoid delays in payroll processing.
The full form of LOP is loss of pay in a salary slip. It mea ns that when you don’t go to the office for two or more days without prior information, some amount will be deducted by HR from your salary.
The HR administrator needs to present monthly reports through Management Information System (MIS) as a part of an excellent account-keeping practice and management control perspective. Some reports that the administrator prepares are:
These reports are the statements for either a single employee or for all the employees. The analytical reports also help in identifying the leave-taking mechanism or absence. Apart from these reports, ad-hoc reports are always required.
A proper information system is required for professional leave accounting and record keeping. Usage of spreadsheets, such as Microsoft Excel or Google Sheets, is the most common. It is the easiest way of keeping the records. However, to automate the process and reduce the HR administrator’s efforts, one requires purpose-built software tools. There are two categories of software for distinct users:
All the different activities that are to be handled by the HR administrator are automated by the leave administration software. It also covers the rules set up, reporting the leave, keeping track of the leaves, and much more. Desktop software, online software, and cloud-based software are the different platforms from which the admin tools can be accessed.
The leave portals for employees are either an online or a mobile application, also meant for the managers. With the help of the self-serviced leave portal, employees can track their leave balance and the leave transaction. It also provides automation of the process with few added benefits. Proper leave management can make the life of an HR much easier by solving many issues in leave management. Given below are some of the advantages which an organisation can enjoy:
In the 21st century, having a proper leave policy is essential for an organisation. The HRs of an organisation are usually responsible for developing employee leave policy and maintaining an adequate track record using relevant tools. We hope that through this article, we have presented the different types of leaves in HR and help you understand the leave policy for employees.
The Pagarkhata app comes to your rescue since it helps in effective staff management. So, download this app in order to make your leave management procedure easier. This app records the automatic attendance and leaves of employees, thereby, making employee management much easier.
1. What are the common types of leave policy for employees?
The common leaves for employees are as follows:
2. Why is employee leave management important?
Having a proper leave management system is important so that an organisation can keep track of the leave or absences of employees, manage work accordingly, and adjust them in salary slips.
3. Is there an application through which employee leave management can be made easier?
There are various applications available for tracking and managing employee leaves. Pagarkhata app is one such software which can be used for systematic staff management. The process of automatic recording of employee salary, attendance and leaves etc. are available in this app. Therefore, this app can make the employee leave management process more efficient for a company
Pagar Khata -Staff Payroll & Attendance Management