Leave Policy in India

Types of Leave

• Earned Leave (EL): Employees typically accrue 1 day of earned leave for every 20 days worked, with a maximum of 30 days per year, depending on state-specific laws. Leave may be carried forward up to 45–60 days.
• Sick Leave: Varies by state but typically 12 days per year. Paid at full wages with a medical certificate for absences beyond 2–3 days.
• Casual Leave: Usually 7–12 days per year for urgent personal matters. Not encashable and must be used within the year.
• Maternity Leave: 26 weeks for the first two children. 12 weeks for subsequent children. Covered by employer, subject to eligibility under the Maternity Benefit Act.
• Paternity Leave: No national law, but government employees are entitled to 15 days. Many private firms follow similar practices voluntarily.

Unused Leave

Earned leave can be carried forward up to state-specific caps. On termination or resignation, unused EL must be paid out. Casual and sick leave often lapse at year-end unless stated otherwise in company policy.

Consequences of Mismanagement

Non-compliance with leave rules under the Shops and Establishments Acts or Maternity Benefit Act may result in fines and legal action. Employers should maintain proper registers and policy documentation to avoid inspection issues.

Public Holidays

India observes three national holidays and additional state holidays, typically totaling 10–14 days. Work on holidays must be compensated with double wages or substituted time off.

How AYP Manages Leave Compliance

AYP navigates India’s complex state-wise leave policies and ensures proper payroll integration for maternity leave, earned leave encashment, and sick leave balance tracking. We keep you updated on evolving state laws.

Contact Us

Expanding to India? Contact AYP to stay compliant across all states with our end-to-end EOR services.