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COVID-19 Impact | Companies rethink leave policy as employees take fewer leaves during work-from-home

Provision of fixed leave quantum is mandated — per state government requirements — under the Shops and Establishment Act, 1961; while leave encashment is not

August 30, 2020 / 04:07 PM IST

A large number of companies are modifying their leave policy in light of the COVID-19 pandemic by encouraging employees to take days off or capping leave encashment.

As employees continue to work from home and with very few taking leaves – for fear or job loss or due to travel restrictions, such days are piling up, making corporates rethink their leave policies, Mint reported.

HR tech solution provider PeopleStrong found that less than 40 percent employees have applied for leaves during April-June – a significant drop, the report said.

Notably, provision of fixed leave quantum is mandated — per state government requirements — under the Shops and Establishment Act, 1961; while leave encashment is not.

“While most cannot scrap the policy overnight, many are reviewing the number of leaves that would be eligible for encashment down to 15-20 percent. This promotes a healthy working practice and helps address the burnout issue as well," Pankaj Bansal, the co-founder and CEO of PeopleStrong, told the paper.


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Navneet Rattan, director - performance & rewards, Aon India Consulting, also told the paper that organisations were either “reducing current leave balance, not allowing for leave encashment, or putting a cap on it" in 2020.

The tech sector on the other hand is encouraging employees to take leaves and not pile them up till the year end.

Anandorup Ghose, partner, Deloitte India, said actions by corporates would be guided from the perspective of reducing leave liabilities and improve cash flows, where companies may move annual leave encashment to retrenchment or resignation time instead.
Moneycontrol News
first published: Aug 30, 2020 04:07 pm
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