How earned leave builds up
Companies credit earned leave monthly, for example 1.25 or 1.5 days a month, or in proportion to days worked. For workers, the OSH Code also sets an entitlement: a worker who completes 180 days of work in a calendar year earns one day of paid leave for every 20 days worked. Carry forward of that leave is capped at 30 days, and the worker may ask for encashment of unused leave at the end of the year. Many company policies are more generous. See the annual leave rules.
Earned leave versus casual and sick leave
Earned leave is the leave meant for planning: a trip home at Diwali, a family wedding, a vacation. It usually needs advance notice, such as one or two weeks, and managers approve it against the team's plans. Casual leave covers short unplanned needs, and sick leave covers illness. Earned leave is also the type normally carried forward and encashed, which is why it matters most in the full and final settlement.
Managing earned leave
Earned leave works best when it builds steadily and people actually use it. In ZeniaHR, EL is credited at a default 1.5 days a month in the Leave Ledger. A joiner or leaver gets a pro rata share for the part month, credits are rounded to half a day, and the balance stops growing at a set maximum. HR previews year-end carry forward before running it, and encashed leave becomes a payroll earning.
- Credit it monthly so joiners and leavers get a fair share
- Set a maximum balance and a carry-forward cap
- Ask for notice and plan around peak seasons
- Encourage people to take leave rather than hoard it
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Is earned leave the same as privilege leave?
Yes. Earned leave, privilege leave and annual leave are different names for the same kind of leave: paid leave that builds up as you work and is used for planned time off. Some companies write PL, others EL. What matters is the policy behind the name: how fast it accrues, how much can be carried forward and whether it can be encashed.
How is earned leave calculated?
Most companies credit a fixed amount each month, such as 1.25 or 1.5 days, pro rata for the month you join or leave. For workers covered by the OSH Code, the entitlement is one day for every 20 days worked in a calendar year, once 180 days of work are completed. Your balance is the credited leave minus leave taken, plus anything carried forward.
What happens to unused earned leave?
It is usually carried forward to the next year up to a cap, and the rest may lapse or be encashed, as the policy says. Under the OSH Code, a worker can carry forward at most 30 days and can ask to encash unused leave at year end. Balances still left when an employee leaves are normally paid in the final settlement.