Leave Encashment under Maharashtra S&E Act

Clarification regarding Leave Encashment (under Maharashtra S&E Act 2017)

Query 1:-
How many Leaves Accumulation is allowed / permitted under the Maharashtra Shops and Establishment Act, 2017?

Response:-

As per Maharashtra S&E Act, 2017, under section 18 (5), Every worker shall be permitted to accumulate earned leave upto a maximum of forty-five (45) days.

Query2:-

Whether Leave Encashment is to be calculated on Basic or Gross Wages?

Response:-

As per Maharashtra S&E Act, 2017, under section 18 (10), Every worker shall be paid for the period of his leave earned under sub-sections (3) and (4) at a rate equivalent to the daily average of his wages for the days on which he actually worked during the preceding three months, exclusive of any earnings in respect of overtime.

In simple words, It's on the fixed gross salary - Other than variable pay and Bonus if any.

 

Note that The provision of Leave Encashment is allowed only in two scenarios:-

1. Employer refuses to sanction the leave - Employee entitled to encash the leaves in excess of 45 days.
2. During separation of employment for the balance leave stand on the employees account to be encashed.