This leave type is called Earned Leave because you 'earn' these leaves for days worked.
This kind of leave is also known as Vacation Leave (VL) or Privilege Leave (PL) or Flexi Holiday, or Annual Leave (AL).
The EL leave type is typically used for personal reasons such as vacation, to observe festivals that are not declared holidays, etc.
Leave availed for a week or more is considered as "long leave.” Since work may get disrupted if a team member goes on extended leave, this type of leave needs to be planned ahead of time, and the team or manager informed about it in advance.
Providing earned leaves is mandatory as per labour laws, though the quantum of such leaves vary state by state. The leave entitlement is calculated based on a certain number of days worked (e.g., 20 workdays). Days worked shall not include holidays, weekends, or days when the employee does not work.
A unique feature of earned leaves is that the leave balance at the end of the leave-year is carried forward to the next year. Again, state laws govern the quantum of leave to be carried forward to the following year.
Earned Leaves can also be converted to cash through a process called Leave Encashment. The basic salary is usually considered as the unit of exchange to encash leaves. One day of EL balance converts to one day's basic pay. In some organizations, gross income is considered instead of basic salary.