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Leave system in India

The leave system in India is regulated by a range of labor laws and regulations that define the types of leave employees are entitled to and the guidelines for requesting and managing these leaves. It's essential to recognize that leave policies can differ among companies and industries, and state-specific labor laws may also influence the determination of leave entitlements. Employers bear the responsibility of ensuring that their leave policies conform to the relevant labor laws and regulations.

The main categories of leave in India consist of:

  1. Earned leave (EL) or privilege leave (PL): Earned Leave, also known as privilege leave, is a form of paid leave that employees earn based on the number of days they have worked for the company. The number of earned leave days accrued per year may vary depending on the company's policy and the state labour laws. Employees can use earned leave for planned vacations, personal reasons, or to address unexpected situations.
  2. Sick leave (SL): Sick leave is granted to employees for the purpose of taking time off due to illness, injury, or medical emergencies. The number of sick leave days an employee is entitled to may vary depending on the company's policy and applicable labour laws.
  3. Casual leave (CL): Casual leave is a short-term leave option provided to employees for unforeseen or urgent personal needs. It is usually a limited number of days per year and is not cumulative. Casual leave is designed to address short absences from work that do not fall under other specific leave categories.
  4. Marriage leave: Some companies provide a special leave for employees getting married called marriage leave. Marriage leave is not a legal entitlement in India. However, most of the companies tend to give three days of marriage leave as a norm.
  5. Maternity leave: Female employees are entitled to maternity leave to attend to their pregnancy and childbirth. The duration of maternity leave may vary depending on the company's policy and applicable labour laws. In recent years, the government of India has increased the maternity leave duration to provide better support to working mothers.
  6. Paternity leave: Some companies offer paternity leave, which allows male employees to take time off to support their partners during childbirth and the initial days of parenting. The duration of paternity leave may vary based on the company's policy.
  7. Compensatory off (Comp off): Compensatory off is granted to employees who work on holidays or weekends as part of their job requirements. In such cases, the employee is provided with an equivalent number of days off to compensate for the extra work hours.
  8. Bereavement leave: Bereavement leave, also known as bereave leave or death leave, is the time off from work that employers offer to their employees after the death of a close family member, such as a grandparent, parent, sibling, spouse, in-law, or child, or friend. The loss can impact employee's emotional state and affect their ability to perform at job. Bereavement leave policy differs from company to company. Bereavement leave may qualify as paid or unpaid leave depending on the employer.
  9. Loss of pay leave (LOP) or leave without pay (LWP): There are cases when an employee has exhausted all leave balance but still requires time-off for some exigency. In such situations, companies allow them to go on leave without pay (LWP). Since there is a loss of income when an employee avails this type of leave, it's also called LOP leave. There is no concept of a leave balance in the case of LOP leave. However, during payroll processing, we need to deduct salary for the number of days of LOP leave during the month.

Additionally, employees are expected to follow the company's leave application procedures and notify their supervisors or human resources department in advance when planning to take leave. This helps ensure smooth workflow management and proper arrangements for work during the employee's absence.

Disclaimer

The Canadian Trade Commissioner Service in India recommends that readers seek professional advice regarding their particular circumstances. This publication should not be relied on as a substitute for such professional advice. The Government of Canada does not guarantee the accuracy of any of the information contained on this page. Readers should independently verify the accuracy and reliability of the information.

Content on this page is provided by Dezan Shira & Associates a pan-Asia, multi-disciplinary professional services firm, providing legal, tax, and operational advisory to international corporate investors.

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