Employers must offer their workers various types of leaves in addition to the earned leaves mandated by Indian labor law. If you don’t have any idea about the leave policy for employees in India, read this blog.
Leave Policy for Employees – Employers must also offer their workers several sorts of leaves, such as bereavement leave, sick time or sick leave, fatherhood or maternity leave, compensatory work off days, and casual leaves, in addition to the earned leaves permitted by Indian labour law leave policy.
The number of yearly leave days and the policy that goes along with them are the next best factors that employees look for in a job after the pay. The paid days off an employee is entitled to, in addition to holidays, are called earned holidays or annual leaves. Therefore, businesses need to pay particular attention when arranging for their employees’ yearly leaves. Generic references will enable you to craft a paid leave policy for employees in your employment agreements properly.
Leave Policy for Employees: Factories Act
The Factories Act of 1948 stipulates that each worker or employee who has worked a least 240 days in a calendar year is entitled to 12 working days of paid leave or annual leave. For adult and juvenile employees, paid or earned leave time durations vary (under the age of 15 years).
A juvenile employee under the age of 15 is eligible for a compensated or earned leave of one day following completing 15 working days. An adult employee, however, is eligible for this leave after 20 days of employment. For an adult worker and a child worker, the leave period lasts for 20 and 15 working days.
Employees receive their regular daily pay during the term of earned leave. As a result, the employee is entitled to receive daily pay throughout the yearly leave period. Employees’ full-time daily compensation, excluding incentives and overtime, is their daily pay. However, it includes all other perks, such as dearness allowances and cash equivalents from the sale of food items and other items to the employee.
Private Schools
Leave Policy for Employees – All private school staff are eligible for paid annual leaves in October (up until Diwali) and Summer (starting in May). If a non-permanent employee worked for the bulk of the previous term or will continue working after the vacation, they should be paid their vacation compensation. The employee will be entitled to pay for working days before the vacation as well as vacation money if the education officer is persuaded that the person was fired to avoid paying vacation salary.
Even if they leave their job on the final day before vacation, permanent employees are still entitled to their vacation pay. Additionally, a permanent employee would be entitled to the income mentioned above if they left their position during the term (with proper notice).
Private school students are not entitled a leave; rather, it is up to them to request one. Applications for absences other than casual or extension must be submitted in advance, either within seven days of the beginning day of absence. If not, non-permanent workers are seen as having given up the job after seven days.
Permanent employees could be disciplined in this circumstance. Following three years of no formal statement, permanent employees are deemed to have given up their job.
Except for school leaders, teaching and non-teaching staff members may occasionally be granted casual leaves depending on the State Government’s orders. Any casual leave may be taken with no more than two additional holidays. Other holidays before or after casual leaves exceeding two leaves are an integral part of informal leaves. Within two periods of casual leave, Sundays and holidays are considered part of those leaves. In this scenario, Saturdays and other half-working days are one full leave day. By working the other half, one can take unscheduled half-day leaves. The Act outlines a variety of specific casual leaves, such as those for family planning procedures, etc.
Planned Leave
If an employee plans to take a four-day or longer consecutive absence, their pay should be paid before the leave period begins. To ensure that absences maintain efficient operation, the Chief Inspector of Factories, the employer, and the worker’s committee jointly decide on the leave schedule.
The employee may use all or any of the annual leave entitlements at once, but only after giving written notice to the employer and requesting authorisation at least 15 days before the beginning of the leave. Unless they contravene the policy that has been settled upon by all parties, such requests shouldn’t be turned down. Even if the annual leave is undertaken in instalments, the employee is only permitted to take it three times per year.
The following year’s annual leave could be carried over. A maximum of 30 leaves are allowed, though. If the employee’s employment contract expires before they have had a chance to use their yearly leave, they will be paid out in direct proportion to the number of months and average weekly hours worked.
Leave Policy of Non-Standard or Platform Workers
Independent contractors are frequently seen as non-standard employees. The OSH code covers their leave and working hours rules (Occupational Safety, Health and Working Conditions Code, 2019).
According to the OSH code, a worker is someone who is not an apprentice as defined by the Apprentice Act of 1961 but is instead paid a set wage to perform manual, unskilled, semi-skilled, skilful, clerical, technological, managerial, supervisory, operational, or administrative work for pay or hire in an environment where there are implied or explicit rules of employment.
The legislation does not expressly cover Independent contractors included in the platform economy as it is currently being proposed. However, it enables the legal system to apply the law liberally and favourably to the benefit of platform or non-standard personnel. The 2019 Social Security Code Draft reveals similar considerations.
Public Holidays
Leave Policy for Employees – Employees are entitled to paid time off after public holidays, including those observed in observance of religious holidays and memorial days. Even while India celebrates a variety of religious and cultural holidays, only the following three are acknowledged as national public holidays:
- 26 January Republic Day (15 August),
- Independence Day (15 August),
- Gandhi Jayanti (2 October)
Weekly Days-off
Following Indian labour legislation, employees are entitled to a weekly rest period. Workers are entitled to a minimum of 24 hours of rest on Sunday, the first day of every week. This amount of downtime is referred to as paid downtime. The company may occasionally request that the employee work on a scheduled day off. In these circumstances, the employee is entitled to a make-up day off three days after or before the regularly scheduled weekly holiday.
Employers should ensure that their workers receive an additional day off during the ten-day workweek if they substitute their employees’ holidays.
When an organisation opts out of the weekly leave policy and does not give its workers any weekly time off, it is required to give them an equivalent number of make-up days off within two months.
Employers must also offer their workers various types of leaves, such as bereavement leave, medical leave or sick leave, paternity or maternity leave, compensatory work off days, and casual leaves, in addition to the earned leaves mandated by Indian labour law.
Industrial Establishments (National And Festival Holidays) Act
The Industrial Establishments (National and Festival Holidays) Act mandates that organisations in India must grant holidays on specific national days: Republic Day on January 26, Independence Day on August 15, and Gandhi Jayanthi on October 2. States have the authority to determine additional holidays for other festivals. For example, Delhi adheres to the Punjab Industrial Establishment (National and Festival Holidays) Act, providing employees with three national holidays and at least four festival holidays. In contrast, the Tamil Nadu version of the act requires four national holidays and five festival holidays. Organisations must comply with these laws based on their state’s regulations to ensure proper holiday entitlements for their employees.
Maternity Benefit Amendment Act 2017
The Maternity Benefit Amendment Act of 2017 made significant improvements to the Maternity Benefit Act of 1961 to support working mothers. This law grants every mother 26 weeks of paid leave, allowing them to recover from childbirth and care for their newborns without quitting their jobs. For the first two children, mothers get 26 weeks of paid leave, and for any subsequent children, they get 12 weeks of paid leave. In cases of adoption, women receive 12 weeks of paid leave if the adopted child is less than three months old. To be eligible for this benefit, an employee must have worked for at least 80 days in the organisation.
Shops and Establishments Act
The Shops and Establishments Act governs working conditions, employment terms, working hours, and employee rights in shops and commercial establishments across India. Although the act applies nationwide, specific regulations vary by state. For example, the Delhi Shops and Establishments Act mandates that employees receive 24 hours of rest each week and grants up to 15 days of earned leave for those who have worked continuously for a year. Additionally, employees are entitled to at least 12 sick leaves annually. It’s important to note that the Shops and Establishments Act does not apply to state and central government organisations.
What are the different leave types in India?
In India, various types of leave cater to the diverse needs of employees, ensuring a healthy work-life balance. Here are the common leave types found in most organisations:
Maternity Leave for Female Employees
Maternity leave is a mandatory benefit that allows mothers to take 26 weeks of paid leave for their first and second children. For subsequent children, they are entitled to 12 weeks of leave. This leave helps mothers recover from childbirth and care for their newborns. To be eligible, women must have worked at least 80 days in the 12 months before their expected delivery date.
Paternity Leave for Male Employees
Paternity leave lets new fathers take time off to care for their newborns. Unlike maternity leave, there is no formal policy for paternity leave in the private sector, so the duration and pay are decided by the organisation. However, male employees in the central government can take 15 days of paid paternity leave.
Sick Leave
Sick leave allows employees to rest and recover when they are ill or injured. Most organisations provide a minimum of 12 sick leaves per year, which are credited at the start of the year. These leaves usually cannot be carried over to the next year or cashed in.
Casual (Planned) Leave
Casual leave, also known as planned leave, lets employees take time off for regular vacations or personal responsibilities, like attending important events. Some organisations provide all casual leaves at the beginning of the year, while others distribute them monthly.
Earned (Privileged) Leave
Earned leave, or privileged leave, is accumulated based on the number of days an employee works. The amount of earned leave varies by region. Unlike sick and casual leave, earned leave can be carried over to the next year, though there is a limit on accumulation. Some organisations also allow employees to cash in their earned leave.
In addition to these common leave types, many organisations now offer special leaves like anniversary leave, birthday leave, and mental health leave to better meet the needs of their employees.
Other leave types
In addition to the standard leave types, some organisations offer additional leave options as extra benefits for their employees:
Marriage Leave
For employees getting married, many organisations provide marriage leave, ranging from a minimum of three days to a maximum of two weeks. The exact number of days varies by organisation.
Compensatory Leave
Compensatory leave is offered to employees who work overtime or on non-working days such as weekends and holidays. These employees can take time off during regular weekdays to compensate for the extra hours worked.
Loss-of-Pay Leave
organisations may allow employees to take leave even after exhausting their allotted leave balance. These extra days off are unpaid and are known as loss-of-pay (LOP) leaves.
These additional leave options, though not mandated by law, help cater to the diverse needs and circumstances of employees, promoting a more flexible and supportive work environment.
Leave Rules
After identifying the types of leave available, it’s essential to establish clear rules for each type:
Grant/Entitlement
Define the amount of leave granted, how frequently it can be taken, and specific timing requirements.
Availing Rules
Set guidelines on how often an employee can take a particular leave, including any limits or restrictions.
Eligibility
Determine who qualifies for each type of leave based on factors like job role and tenure.
Approvals
Specify who can approve leave requests and any approval limits.
Clubbing & Covering
Establish rules for how leave interacts with weekends or holidays that fall within the leave period.
Encashment
Identify which types of leave can be converted to cash, the limits on encashment, and the salary components used for this calculation.
Year-End Activity
Define policies for carrying forward unused leave, any maximum limits, and handling lapses.
For specific leaves like Sick Leave and Maternity Leave, ensure all required documentation is collected and maintained by HR. These decisions should align with the organisation’s unique needs and culture, providing a structured yet flexible leave policy.
Rules For Granting Leaves
When establishing rules for granting leaves, consider the following aspects:
Amount of Leave
Decide the total number of leave days an employee can take in a year.
Frequency of Granting
Determine how often leave is allocated, whether monthly, quarterly, or annually.
Expiry Period
Set a time frame within which the granted leave must be used before it expires.
Eligibility
Define which employees qualify for the leave based on their role, tenure, or other criteria.
Top-Up Leave Grants
Establish rules for adding extra leave days beyond the standard allocation.
Prorating
Determine how to adjust leave entitlement for employees who join or leave the organisation mid-year.
What is a Good Leave Policy
A good leave policy is your rulebook for paid time off. It should be clear, easy to understand, and fair for both you and your employees. Here’s what makes a leave policy great:
- Organised and Up-to-Date: Think of it like a well-maintained recipe book. It should have clear sections, page numbers, and a title for easy reference. The policy should also be dated and have revision history to show any updates.
- Crystal Clear Language: Leave jargon at the door. Use plain English that everyone can understand. Define any specific terms used in the policy to avoid confusion.
- Mobile-Friendly and Accessible: These days, employees need access to information on the go. Make sure your leave policy is available online and optimised for mobile devices.
- Bilingual Power: If your company has a large number of employees who speak a different language, offer the policy in both English and the local language. This ensures clear communication and avoids misunderstandings.
- Two-Way Street: A good leave policy protects both the company and its employees. It should outline procedures for requesting leave, what qualifies for paid time off, and how employees should stay reachable during their absence.
- Regular Check-Ups: Just like your health, your leave policy needs regular reviews. Schedule updates every two years or so to ensure it aligns with current company needs and legal requirements.
Conclusion
You can be guided through every step leave policy for employees in India by our legal team at Vakilsearch.
