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All-in-one HR platform · v2.0
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All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
The way leave is earned over time, such as a fixed number of days credited each month or quarter, rather than granted in full on the first day of the leave year. Accrual ties the balance to service actually worked, so a mid-year joiner or leaver holds only what they have earned.
Accrual runs on a schedule set in the leave policy, often on the first of each month, crediting a fraction of the annual entitlement. HR's monthly check is that new joiners received a pro rata credit for their partial first month and that people on long unpaid leave did not accrue if the policy excludes that time.
Example with illustrative figures: a policy grants 18 days of earned leave a year, credited at 1.5 days a month. An employee joining on the 16th of a month might receive 0.75 days for that month, and a leaver on the 10th none for the final month, depending on the rounding rule written in the policy.
State Shops and Establishments Acts and the Factories Act set their own rules on earning leave, and these vary by state and establishment type, so the accrual schedule must meet the applicable law. The common mistake is letting accrual continue during notice periods or sabbaticals without a written rule either way.
Accrual credits leave gradually, such as monthly, as the employee works. Front-loading credits the full annual entitlement at the start of the year.
Many policies stop accrual during loss-of-pay periods. The rule should be in the leave policy and applied consistently.
The first month's accrual is usually pro-rated by days worked. Rounding rules should be set so balances do not drift over time.
Some employers allow negative balances for a limited period. If the employee leaves before earning it back, the amount is usually recovered in the final settlement.
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