Leave Policy in India

Key Takeaways:

• Annual leave: Minimum 15 days of paid leave after completing 240 days of employment.
• Public holidays: 12 public holidays per year, with regional and religious substitutions allowed.
• Sick leave: Governed by state-specific Shops and Establishments Acts, typically 12–24 days of combined sick and casual leave.
• Maternity leave: 26 weeks under the Maternity Benefits Act, 1961 (for women with fewer than two surviving children).
• Paternity leave: No statutory entitlement; provided only if specified in the employment contract.

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Overview of Leave Policy in India

Leave policies in India are complex, with state-specific rules for paid holidays and additional local holidays based on agreements. Upcoming changes will impact policies as the Indian government consolidates 25 labor laws into four codes: Social Security, Industrial Relations, Occupational Safety, and Wages.

This guide covers the main leave categories applicable to employees in India:

• Annual leave (earned/privilege leave)
• Public holidays
• Sick leave and casual leave
• Maternity leave
• Paternity, bereavement, and other contractual leave

Employers hiring employees from India or through an Employer of Record (EOR) in India must understand these regulations to ensure compliance and effective workforce management.

Annual Leave (Vacation)

• Minimum entitlement: At least 15 days of paid annual leave per year, as outlined in the employment contract.
• Eligibility: Employees become eligible after completing 240 days of employment.
• Carry-over: Contracts often include additional leave days and rules for carrying over unused days to the next year.
• Approval and notice: All paid time off (PTO) requests must be submitted at least 15 days before the leave starts and approved by the employer, works committee, and manager to ensure work continuity.

Public Holidays

• Workers are entitled to 12 public holidays annually.
• The default countrywide holidays are listed below, but employees can opt to exchange these for their regional or religious holidays.
• Holidays falling on a Saturday are observed on the preceding Friday.
• Holidays falling on a Sunday are observed on the following Monday.

Public Holidays 2024:

• 1 Jan 2024 (Monday): New Year
• 26 Jan 2024 (Friday): Republic Day (National Holiday)
• 25 Mar 2024 (Monday): Holi
• 29 Mar 2024 (Friday): Good Friday
• 11 Apr 2024 (Thursday): Id-ul-Fitr* (Tentative, based on Lunar Calendar)
• 15 Aug 2024 (Thursday): Independence Day (National Holiday)
• 19 Aug 2024 (Monday): Raksha Bandhan
• 26 Aug 2024 (Monday): Janmashtami
• 2 Oct 2024 (Wednesday): Gandhi Jayanti (National Holiday)
• 11 Oct 2024 (Friday): Dusshera
• 31 Oct 2024 (Thursday): Diwali
• 15 Nov 2024 (Friday): Guru Nanak's Birthday
• 25 Dec 2024 (Wednesday): Christmas

Sick Days

Sick leave policies in India differ by state, with local Shops and Establishments (S&E) Acts often providing between 12 to 24 days of sick and casual leave. The Standing Orders (SO) Act may have its own sick leave provisions. Employees typically receive the most favorable leave entitlements available, whether from the S&E Act, the SO Act, or their employer's service rules.

State-level examples:

• Maharashtra: Up to 8 days of casual leave and 8 days of sick leave per year under the Maharashtra Shops and Establishments Act.
• Karnataka: Up to 12 days of sick leave and 12 days of casual leave per year under the Karnataka Shops and Commercial Establishments Act.
• Delhi: 12 days of combined casual and sick leave per year under the Delhi Shops and Establishments Act.

Maternity Leave

• Indian law mandates maternity leave for female employees.
• Maternity leave is governed by the Maternity Benefits Act of 1961 (MB Act) and the Employees' State Insurance Act of 1948 (ESI Act).
• The ESI Act applies to employees earning a monthly salary of up to INR 21,000. Employees not covered under the ESI Act receive their maternity benefits according to the MB Act.

Maternity leave entitlement at a glance:

Additional provisions:

• The MB Act includes provisions for nursing breaks and a medical bonus of INR 3,500 if the employer does not offer post-natal confinement and care.
• Employers with 50 or more employees must provide crèche facilities within a prescribed distance from the workplace.
• Female employees are allowed up to four visits to the crèche each day, including rest breaks.
• If the nature of the job permits, a female employee may work from home after maternity leave, based on mutually agreed terms with the employer.

Paternity Leave

There is no statutory paternity leave entitlement for male employees in the private sector in India. Paternity leave is provided only when specified in the employment contract or company policy.

• Central government employees: Eligible for 15 days of paid paternity leave under the Central Civil Services (Leave) Rules.
• Private sector employees: Entitlement depends entirely on the employer's policy or contract terms.

Casual Leave

Casual leave is granted for unforeseen personal reasons, such as urgent personal work or short-term emergencies.

• Typical entitlement: 7 to 12 days per year, depending on state and employer policy.
• Usage: Generally taken in short durations (1–3 days at a time).
• Carry-over: Casual leave usually cannot be carried forward to the next year and lapses if unused.

Earned/Privilege Leave

Earned leave (also called privilege leave) is accrued based on the number of days worked and is typically used for planned absences such as vacations.

• Accrual: Generally 1 day of earned leave for every 20 days worked, equating to approximately 15–18 days per year.
• Carry-over: Can usually be carried forward, subject to a cap defined by state law or employer policy.
• Encashment: Unused earned leave is often encashable at the time of resignation or retirement, as per applicable rules.

Bereavement Leave

India does not have a statutory provision for bereavement leave. It is typically offered at the employer's discretion or as part of the company's internal leave policy.

• Typical entitlement: 3 to 5 days of paid leave on the death of an immediate family member.
• Eligibility and duration: Defined by the employer's policy or employment contract.

Hassle-Free Leave Policy Management in India with Gloroots

At Gloroots, we understand that navigating leave policies can be complex, especially when expanding your business and hiring across borders. Our platform ensures compliance with India labor laws, maintains clear leave balances, processes leave requests smoothly, and generates comprehensive leave and payroll reports. By partnering with Gloroots, you can focus on scaling your business while we handle the complexities of employee leave management. Contact us to discover how Gloroots can simplify your HR processes and enhance your operations in India.

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