lop reversal- Importance and Meaning Share ✕ Updated on: 8th Apr 2024 5 mins read HR Glossary Payroll LOP Reversal Meaning LOP Reversal is salary reimbursed after deduction to employees. It generally happens when an employee has exhausted all their leave balance and still avails more leaves, those leaves are considered as loss of pay. Loss of pay can also be due to technical glitches or because of fine imposed on the employee. As loss of pay reversal, the employer is reimbursed by the employee for extra leaves. LOP reversal example- an employee earns ₹ 60,000 per month and avails 3 leaves over balance, the salary paid to the employee would be ₹ 54,000- this is loss of pay. Then, after careful consideration- loss of pay has been reversed by employers which can be termed as LOP reversal. In This Article Loss of Pay Reversal Causes of LOP Causes of LOP Reversal How to Avoid LOP Reversal Key Takeaways FAQs Causes of LOP Before understanding LOP reversal, let’s understand a number of reasons for loss of pay. There is not only one single reason responsible for this. A few of the reasons are: 1. Unapproved leaves Unauthorised leaves can result in termination of employment. But, the more urgent repercussion is loss of pay. 2. Illness An employee may avail themselves of extra leave after exhausting their leave balance due to an injury, illness or an accident. 3. Miscellaneous A few other reasons that an employee may have a loss of pay could be because of unexpected reasons such as family emergency, unplanned visit to the doctor’s or other personal reasons. But sometimes LOP occurs due to mismanagement on the employer’s side. Let’s discuss Causes of LOP Reversal 1. Glitches in technical system At times, technical glitches like attendance issues, may create ruckus which lead to LOP. These glitches must be addressed manually. 2. Mismatched approval cycles Inconsistencies or delay in approval process of leaves or time off work may ultimately result in LOP. 3. Irregular data of attendance system Irregular data here means inaccuracies in attendance system of the company. This usually leads to LOP due to (mistaken) absence in the workplace. 4. Manual calculation of payroll When the salaries are paid by manual calculation, there is a great chance of error in payroll calculations. Consequences of LOP Reversal The consequences of LOP Reversal may vary depending on the situation. But the most prominent consequences are: Monetary adjustments LOP Reversal primarily includes adjustments to employee’s salaries to pay the employee what he/ she is owed. Employee satisfaction Employees are more satisfied knowing that they receive their rightful compensation. This in turn boosts employee morale. Legal complications Mishandling or refusing LOP Reversal may lead to legal actions by the employee. Administrative load LOP Reversals impose burden upon administration because of the need of detailed documentation. How to Avoid LOP Reversal 1. Approval of leave beforehand Employees must get approval for their leave beforehand so that the management can look for a replacement or figure out an arrangement for the period of absence. 2. Compensation of time Employees can compensate for their time off by working overtime or by working on weekends. This may avoid an employee loss of pay by the end of the month. 3. Avoid unnecessary leaves Employees must keep track of their leaves. You should opt for leaves only when necessary. This may help avoid the situation. Key Takeaways LOP Reversal is salary reimbursed after deduction to employees. It generally happens when an employee has exhausted all their leave balance and still avails more leaves, those leaves are considered as loss of pay. Factors such as unapproved leaves, illness, injury or accidents may be the key cause of the LOP. LOP reversal may lead to monetary adjustments, administration burdening, and legal issues. LOP could be avoided by leave approval beforehand, compensation of time by working extra hours, and avoiding unnecessary leaves. FAQs Q1. Can LOP be Reversed? When the LOP is incorrectly marked or is a result of some glitches, the LOP needs to be reversed. The employee, hence, receives a reverse salary from the employer. Q2. Can LOP be avoided entirely? In emergency situations such illness or accidents, the employer may refrain from implementing LOP, though such situations could be avoided by effective communication and maintaining a check on your attendance. Q3. What happens when an employee takes leave without prior approval? Leaves without prior approval will lead to LOP and maybe disciplinary actions. In a few cases, it may also lead to employment termination. Q4. Can employers grant compensatory leave to avoid LOP? Employers may or may not offer compensatory leave in exchange of additional work done during overtime or holidays.
