Privilege Leave

What is Privilege Leave

Privilege leave implies paid leave which is gained by employees after a definite period of service to the organisation. Privilege leave or earned leave is vital for both employees and HR professionals. 

Practically, privilege leave has been designed with the sole purpose of taking planned vacations and long leaves in life. The basic essence of privilege leave lies in the fact that it provides compensation in the form of rest for their hard work.

Key Features

• Accrual: Privilege leave accrues gradually over the year, depending on the total number of days worked, either on a monthly or yearly basis.
• Planning: It is a planned leave intended to cover long periods of absence; therefore, the employee must plan before utilising it.
• Carry Forward: Unused privilege leaves can normally be carried forward into the following year according to any limitations stipulated in the company’s policy or labour law.
• Encashment: Most companies provide for leave encashment of the unused balance accrued by employees during their time in the organisation.

Example of Privilege Leave

Imagine a software engineer who earns one and a half days’ privilege leave for each month they work. After serving for an entire year, they earn 18 days’ leave. With plans to go on a two-week vacation in another country, they submit their application four weeks prior. They get approved and enjoy 10 days off with pay.

Why Privilege Leave Matters

Privilege leave is essential for an organisation as:

• Promotes Long-Term Rest: It facilitates long leave and promotes relaxation, which helps an organisation to achieve consistent productivity.
• Drives Retention: Linking leave accrual to service duration creates incentives for loyalty and retention.
• Adds Financial Value: Elements like carry-forward and encashment make accumulated leave a monetary benefit for employees.