Paid leave is one of the most significant employee benefits in India. Paid leave enables employees to take time off work without losing their wages. Paid leave and paid time off (PTO) refer to time away from work for rest or relaxation, family responsibilities, or medical reasons. Paid leave is a way in which employers support employee well-being and a way in which employees can take control over the distribution of their time in a work-life equilibrium.
Understanding how paid leave, as the workplace continues to evolve, will require both employees and employers to understand what paid leave is, who can take paid leave, how much paid leave employees can take, and what employers' responsibilities are for paid leave. This article will explain paid leave in simple terms so that employees can understand how many days of paid leave they have, under what conditions leave can be taken, and be entitled to receive written policies from the employer on taking leave to avoid misunderstandings.
Paid leave is an employee benefit that allows time off from work while still receiving regular pay. It is intended to give an employee time away from work for personal reasons, medical reasons, and other reasons without suffering the loss of pay.
Paid leave is probable in India through various laws of labour and employment contracts. The concept of paid leave is intended to provide employees adequate time off without an employee choosing to lose pay when it is appropriate and necessary to be away from work. Paid leave varies from one industry to another.
Paid leave is assumed to be included in casual leave , earned leave, sick leave, maternity leave, etc. There may be different and relevant rules regarding the different types of leave. The main purpose of all types of paid leave is to provide employees with income security while they are away from work. The number of paid leave days is usually mentioned in the employment contract or company policy , and it is also influenced by state regulations.
In India, eligibility for paid leave typically relates to the nature of the employment, length of service, and paid leave policies of the employer. Permanent full-time employees are usually entitled to paid leave, but the types and numbers of leave can vary.
Most state labour laws require employees to work a specific number of working days in a year in order to earn paid leave of some kind (except for a few public holidays). For example, in many states, employees earn earned leave after working 240 days in a calendar year. Employees who are temporary, on probation (if the period is short), and who do not work the minimum required working days may have limited or no paid leave benefits, depending on the company's practices.
In addition, certain types of leave, like maternity leave, are expressly governed by eligibility requirements established in law. For example, under the Maternity Benefit Act, women employees earn 26 weeks of paid maternity leave after working a minimum of at least 80 days in the previous 12-month period.
In India, paid leave systems can be categorised based on the purpose of leave. The types of leave that are offered by the organisation include:
Casual Leave (CL)
Casual leave is short-term leave to deal with urgent/personal issues. These may be family events, emergencies, etc. Casual leave is generally for no longer than a day or two and cannot be used for extended leave. Casual leave is set up at half a day per day of work completed. However, any balance of casual leave, if any is left over, cannot usually be carried into the next calendar year.
Earned Leave (EL) / Privilege Leave (PL)
Earned leave (or privilege leave) is paid leave that accumulates as a result of an employee's number of days of paid work. Earned leave is generally used for travel or vacation, longer, or important personal issues.
The majority of companies allow employees to encash unused earned leave, carry forward the existing balance of earned leave to the next year. Extend leave that goes beyond the original plan of leave and encash the remaining leave at the time of termination or resignation or retirement.
Sick Leave (SL)
Sick leave is designed for when you are sick or recovering from an illness or injury. Sick leave is time that allows you to truly rest and recover without losing income. Employers might require proof of a doctor's visit a few sick days after, which is a reasonable request if it is longer than the specified number of days. Most organisations do not allow sick leave to carry over to the following year.
Maternity Leave
Maternity leave is a protected entitlement for women employees in India. Women employees are entitled to paid maternity leave days before and after their delivery.
Under the Maternity Benefit Act, an eligible woman can receive maternity benefits for either 26 weeks, and during these 26 weeks, the eligible woman can recover from her delivery, care for her newborn, and feel financial peace of mind.
Paternity Leave
Paternity leave is a short-term leave prescribed for male employees to aid the family after a newborn is brought home after delivery. It enables fathers the opportunity to support the family upon their adjustment and short-term commitment to childcaring and nurturing
There are no national laws or guidelines that require paternity leave for male employees in India; however, there are companies across India that have voluntarily chosen to provide such leave.
Bereavement Leave
Bereavement leaves permits time off when there has been a death or serious illness of an immediate family member or loved one. This leave allows employees time to grieve, take care of urgent arrangements, and spend time with family or loved ones during the difficult times.
Public Holidays
Public holidays are days that are pre-advertised by a government or an organisation. These public holidays may include occasions to observe a religious festival, a state/national day, or a statutory holiday.
Public holidays are paid time off away from work and do not contribute to your leave balance. Public holidays provide employees with an opportunity to celebrate, rest, or spend time with family without using personal leave.
The amount of paid leave an employee is entitled to in India varies within the same state, and among private companies and, to some extent, industries (some of which are covered by legislation). In general, employees in India will receive an average of about 18 to 30 days' paid leave (excluding public holidays) in one year.
An amount of 12–15 days of combined casual and sick leave, along with 15–30 days of earned leave, would typically be common across companies, this version would naturally fluctuate based on the company’s policy. Some companies also allow for unused earned leave to be carried forward or encashed, but in general, casual and sick leave can’t be carried forward. This approach means that workers get enough time off to be rested, recover, and tend to personal situations while also being compensated.
Paid leave is not only good for employees, but it is also good for employers. Paid leave allows for time off for employees to rest, manage personal tasks, etc., and allows employers the benefits of increased productivity and healthy workers.
1. Rest & Recovery: Paid leave guarantees money for employees while providing them with time for recovery and relaxation to avoid burnout while travelling, attending family events, or simply resting.
2. Work-Life Balance: Paid leave allows employees to spend time with family, take care of personal matters, or simply recharge. This allows employees to manage work and personal issues better.
3. Health and Well-being: Sick leave allows employees to rest, if necessary, without the stress of lost pay while working to recover. This allows the employee to make sure they are healthy and ready to return to work.
4. Less Stress: When employees know they can take leave if needed, there is less worry and stress about asking for time off when they need to. This helps to improve mental health and increase focus while at work.
5. Job Satisfaction: Employees who can take leave or paid leave when they need to, feel trusted and valued by the employer. This increases happiness, motivation, and organisational loyalty.
1. Elevates Productivity: When employees are afforded sufficient rest and recovery time, they will return to work with more energy and focus. This leads them to work at faster, more efficient, and more effective rates.
2. Increases Employee Retention: When paid leave, in the form of vacation, is offered, it offers employees a more favourable and supportive workplace. Employees who feel that they are valued are less likely to leave a company, which lowers hiring and training costs to the company.
3. Less Absenteeism: If employees know they have reasonable leave options, they won't need to take sudden, unplanned leave. This helps to prevent disruption and keep things running smoothly. This prevents disruption and keeps things running smoothly.
4. Workplace Culture: When an employee can take leave and not stress about it, the employee knows the company honestly cares about their health and other concerns. The result of allowing employees to take leave is a trusting relationship between the employer and employee, fairness in work, and a positive workplace.
5. Stronger Compliance: A clear set of approved paid leave policies can help companies comply with labour laws while reducing the chance of disputes or legal issues. Additionally, paid leave policies result in a fair and transparent process for employees.
Employees in India do have rights relating to paid leave under labour laws and company policies. There may be some differences in terms of the number of paid leave entitlements, carry forward of earned leave, and encashment of earned leave at the time of resignation or retirement (depending on the policy).
There are a number of acts that provide protection of paid leave to employees, such as the Factories Act, Shops and Establishments Acts of different states, and the Maternity Benefit Act of various Indian states. And importantly, employers cannot deduct from an employee's pay for legally entitled leave days; they may only withhold payment to employees for leave if leave was already exhausted.
Employees do have a right to know what the policy on leave is in writing, to make the employer accountable and prevent misunderstandings between the employees and the organisation.
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