Loss of Pay (LOP)
LOP stands for Loss of Pay. In some organizations, this is also called LWP or Leave Without Pay. This is applied whenever an employee does not come in to work and does not apply for leave. For those days, the employee's salary is not paid or is under Loss of Pay.
When an employee gets LOP, the current earning can be affected. For example, if an employee has a basic salary of Rs.15000 for 30 days of work, the salary will be paid in full. If the employee has a LOP of 1 day, then basic is paid for 29 days (30 days - 1 day) as Rs.14500
Let us assume that while processing payroll, company has applied LOP for 1 day for an employee for April 2014, that is, paid 1 day salary less. Later, when the employee convinces manager, payroll processor receives a recommendation to pay back. Therefore, in the next month (May 2014), company pays 1 day extra at the rate of Apr 2014. This process is known as LOP Reversal.
Leave - Attendance Link
Number of days worked by an employee or LOP days is a critical payroll input to process payroll for any month.
When employee is Absent on a particular day, it could be because of Holiday (such as 15th August) , Week Off (such as Sunday), not applied Leave of Absence, applied but not approved Leave of Absence or, Time Records not available even though employee came for work. If the absence is on account of other than Week Off or Holiday, typically, the day will be counted for LOP.
Being Absent is different from being on Leave Without Pay (LWP). Absent without any notice is unauthorized. To track the reason for absence and to arrive at insightful reports, it is quite necessary to establish a link between Leave and Attendance.