HRSINGAPORE Community Discussions
Encashment of Annual Leave
May I enquire when your Company does encashment of annual leave to employees, do you base it on the current salary or the salary from 2017. The annual leave was brought forward from the Year 2017. Kindly advise.
Encashment of annual leave is based on current salary, not the previous year’s salary.
We practice based on current salary.
The usual practice is to use the current salary to encash. The logic is if the employee utilise his leave (whether earned in 2017 or 2018) now, he will be paid current salary.
We use the current salary rate over 52 weeks.
If the leave is allowed to b/f to this year, then we pay the latest salary.
In my years of practice, I use the latest salary.
If I understand correctly, you are also coming from Finance point of view, whereby accrued figure of unconsumed leave for the current year, is derived from last year's salary. Therefore encashment of leave by right should tally with the accrued figure.
However, accruals is still a provision which can be changed as it is merely an accounting entry.
While the value of unconsumed leave should be adjusted according to the salary rate, to be fair to staff. As someone who oversees both Finance and HR, I am more inclined towards people welfare. However, this is what I can only suggest as I am unable to find a legal clause to support this approach.
Pay leave should follow the current salary.