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Payroll Management

Leave Policy for Employees in India – An Overview

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.

Labour Law Advisor

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.


You can be guided through every step leave policy for employees in India by our legal team at Vakilsearch.

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