Leave Policies/ Rules

After creating all Leave Types, the next step is to define Leave Rules. Leave Rules control how many leaves employees receive, when they receive them, how they accumulate, and how unused leaves are handled.

To open this, navigate to HRMS->HRMS Configurations->Leave Configurations->Leave Policies.

Important:

Loyalty Leave and Company Outside Support Leave do not require Leave Rules.

They are controlled from Employee Master and Organization Settings.

Leave Rules are created only for:

Paid Leave (CL, SL, EL, etc.)
Unpaid Leave
Earned Leave
Compensatory Leave

Structure of a Leave Rule:

Each Leave Rule contains:

Rule Name
One or more Leave Types
Credit and frequency logic
Carry-forward, lapse, and settlement rules
Eligibility controls (probation, interns, restrictions)

Once created, the rule displays all included leave types with their individual configurations.

1. Unpaid Leave Rule:

Unpaid Leave does not require credit, balance, or limits.

Configuration:

Add Unpaid Leave using ➕
No monthly, yearly, probation, or carry-forward settings required.

Behavior:

Available when paid leaves are exhausted or not applicable.

2. Paid Leave Rule (CL, SL, etc.):

Paid Leave defines most leave policies and controls.

Applicable After (Months):

Controls when the leave becomes usable after assignment.

Value	Availability
0	From joining date
1	After 1 month
2	After 2 months

Used commonly for confirmation-based eligibility.

Leave Rule Frequency:

Defines how the leave year is divided.

Options:

Monthly (12 periods)
Quarterly (4 periods)
Half-Yearly (2 periods)
Yearly (1 period)

Each period follows its own credit and carry-forward logic.

Leave Can Be Obtained:

Defines how often leave is credited within the rule frequency.

Example:

Rule Frequency: Yearly
Credit Frequency: Monthly OR Quarterly
Result: Annual leaves are credited month by month

Total Leaves in a Year:

Total number of paid leaves an employee receives annually.

Example:

12 leaves per year

Paid in Monthly:

Number of leaves credited per month.

Example:

12 yearly → 1 per month

Max Paid in Monthly / Quarterly:

Limits the maximum leaves usable in a month/quarter.

Example:

Balance = 4
Max Paid in Monthly = 3
Employee can use only 3 that month

Monthly Forward / Settle / Lapse:

Defines what happens to unused leaves at month end.

Options:

Forward
Settle
Lapse

Forward types:

Count-based
Hour-based

Count vs Hour Forward:

Count-based

Carries forward as full-day units

Hour-based

Carries forward based on actual shift hours

Count-based is recommended when shift hours change.

Probation and Intern Rules:

Options:

Applicable during probation
Applicable to interns

If not enabled, those employees will not receive paid leave.

Restrict Leave Application:

If paid leave balance is exhausted:

Leave type is hidden while applying

Ignore Monthly Forward:

All yearly leaves are credited upfront based on pro rata.

Example:

12 yearly leaves credited at rule start

Probation Carry Forward:

Probation leaves are carried forward after probation ends in simple after the probation based on pro rata the leaves will be credited.

Yearly Carry Forward:

At year-end:

Carry forward percentage can be defined
Maximum cap can be applied

Example:

50% carry forward
Max 12 leaves

3. Earned Leave (EL):

Earned Leave is based on work completed.

Additional settings:

Credit After:

Earn EL based on:

Every X working days
Monthly

Example:

1 EL per 20 working days
OR 1 EL per month

Minimum Required Days:

Minimum working days required before EL starts.

Example:

240 days mandatory

Option:

Available in Advance bypasses this rule

4. Compensatory Leave:

Eligibility rules are defined in Leave Type.

In Leave Rule:

Only enable the leave
No credit, carry-forward, or frequency required

5. Combined Leave Rule (CL + SL)

Used when multiple leave types share a common pool.

Example:

Total Paid Leave = 12
CL = 6
SL = 6

Behavior:

CL is fully configured
SL draws from the same yearly pool

Once you enable the Combine Rule option, the squared fields will be automatically filled based on the Paid Leave configuration.

6. Company Outside Support Leave:

Not configured in Leave Rules.

Assigned from:
Employee Master → Settings section

Loyalty Leave — Calculation Logic:

Loyalty Leave can be configured from the People Setting(s) section of the General Settings Page. Loyalty Leave is based on completed service duration, not the current date.

Dates Used:

Employee Joining Date
Current Date
One-Year-Past Date from current date

Loyalty Duration:

Calculated between:
Joining Date → One-Year-Past Date

Current incomplete year is ignored.

Example Calculation:

Current Date: 30-12-2025
One-Year-Past Date: 30-12-2024

Joining Date: 30-12-2023

Loyalty Duration = 1 year

Loyalty Slabs (Configured in Organization Settings):

Loyalty Duration	Loyalty Leaves
1 year	2
2 years	4
3 years	6

Loyalty Credit Outcome:

If Loyalty Duration = 1 year → 2 leaves
If Loyalty Duration = 2 years → 4 leaves
If Loyalty Duration = 3 years → 6 leaves

The Bulk Action button allows you to delete multiple leave policies at once, streamlining the management process.

Why One-Year-Past Date Is Used:

Ensures only completed service is counted
Avoids partial-year inflation
Keeps loyalty calculation stable and accurate

Loyalty Leave can be configured by navigating to Configuration->General Settings->People Setting(s) and scrolling down to Loyalty Leave(s).

Final Outcome:

After configuring:

Leave Types
Leave Rules
Loyalty Settings
Company Outside Settings

The system automatically manages:

Leave eligibility
Credit timing
Carry-forward and lapses
Paid vs unpaid handling

This ensures fully automated, policy-driven leave management across the organization.