How to calculate LOP? Can it be calculated based on the total number of days in a month, or should it be based on the number of business days in the month? If we use the number of business days, the salary be adjusted proportionally for weekends as well. On the other hand, if we consider the total number of days in the month, and an employee takes leave for the entire month, they receive 8 days’ salary. Could someone please clarify as per Indian labor laws?
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Hope you are trying to figure out a logic to arrive at LOP - loss of pay days. These are unpaid days for an employee if s/he fails to authorise absence with paid leave or regularisation. For example, for Jan 2025, an employee worked for 23 days, 5 days paid weekly off, 1 day National Holiday, 2 days on leave (1 day Earned Leave, 1 day Without Pay Leave). Here LOP = 1
Our labor laws do not mandate a specific LOP calculation method I think. The Shops and Establishments Act and Factories Act allow employers to define LOP policies in their employment agreements.
There are two ways one could do - Calendar days method, business days method
- LOP Amount = ( Monthly Salary/Total Calendar Days in the Month)×LOP Days
- LOP Amount = (Monthly Salary/ Total Working Days in the Month)×LOP Days
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Thank you for your reply. This means that the company can choose between calendar days or working days, right?
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Yes I think so. Let’s see any other views from collaborating members
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This is what we follow too using calendar days.
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