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LOP stands for “Loss of Pay.” It is defined as the deduction in salary due to leave taken by an employee when he/ she does not have adequate leave balance in the account. The loss of pay is calculated based on the per-day salary of an employee. If an employer plans to grant leave and compensate for that specific workday on the weekend on a strike day, and an employee does not show up both days, the employee will be given a loss of pay. Also, if a person works on a weekend to finish his or her task owing to inefficiency or lack of supervision, that day is considered LOP.
Loss of pay is calculated as the one-day basic salary based on the number of days in a month.
LOP= Effective salary of one day* Number of days employee has taken the leave
Efficient one-day salary of an employee= Total monthly salary of an employee/ Number of days in a month
Let’s understand how LOP is calculated using a basic illustration
Suppose the salary of an employee is 90000 per month
LOP when number of days in a month is 30= 90000/30= 3000
Number of days on the weekend=4*2=8 days in a month
When accounted for the weekend LOP= 90000/22= INR 4090
Variety of reasons contribute to loss of pay for employees in the organization.
Various reasons of loss of pay are:
If a worker gets ill or gets injured due to some unforeseen accident it may result in loss of pay for employees.
There could be a number of reasons for loss of pay
Unauthorized absence may result in loss of pay for employees. Sometimes employees take leave without providing prior notice which may result in loss of pay for them. Unfair pay reductions due to unauthorized absences can damage morale of employees and lead to long-term legal issues.
Employees may take leave due to a number of reasons. This may include family issues, doctor’s appointments, bank visits or some emergency situations. These situations may add to LOP for employees which reduces their monthly payout substantially.
LOP in attendance may adversely affect your income and financial stability/monthly budget. In order to avoid LOP in your salary you must follow all these steps carefully:
An employee has to ensure that he must communicate the leave in advance with the management or designated authority so that they can make the schedule in advance or assign a replacement for those days if required. This helps to avoid loss of pay in the salary slip of the employee.
If you have taken an LOP in an emergency you must compensate for the lost time by working extra hours on weekends or overtime on some days to avoid the loss of salary at the end of the month. This reduces employee tension as well as burden.
You must invest some time to check your leave balance. If there is an LOP you must compensate for it as soon as possible and if there is leave balance remaining you can take a leave to relax your mind. This will help you to improve your productivity and maintain a proper work-life balance.
Avoid taking unnecessary leaves as it hampers your productivity as well as your salary. Take leave when necessary or if you have sufficient leave balance. This helps to avoid LOP in your salary slip.
To know about the Leave Policy you can refer to it.
Leave without pay(LWP) refers to the leave availed by an employee with prior consent and approval by designated authority. No amount is deducted from the employee’s salary for taking this type of leave if he has sufficient leave balance with him.
Loss of Pay(LOP) refers to the leaves taken by the employees without approval from the manager. When an employee in the organization takes leave without following the norms it is considered as LOP days means employees would not be compensated for the absence.
Loss of pay may cause several impact on the employees including
1. Loss of monthly and yearly income of employee
2. A poor attendance record of employees which reduces work productivity.
3. Strains the medical insurance coverage and retirement benefits of employees.
4. Impact the productivity of employees adversely.
5. Impact the employee’s growth and advancement in his career.
As more and more employees work in the organization either through hybrid mode or remote platforms it becomes difficult to keep track of attendance of every individual employee with man power. So it becomes necessary for the organizations to track accurate productivity, leave balance and productivity of employees.
An efficient leave management system may help the employers to keep this record efficiently avoiding errors. This also saves a lot of crucial time for employees which they can invest in more crucial tasks.