Paid vacation in India may still be a utopian dream for some, especially those employed in the nation’s unorganised sector, but it’s slowly becoming a reality in many workers’ and employees’ lives. Though the net needs to be cast wider to bring all the workers earning daily wages under the provision of “paid holidays,” employers today are recognising its need and working toward it, which is a positive sign for sure.
Types of Paid Holidays in India
The minimum leaves that employers in India provide are dictated by national and state laws. However, depending on what sector the business is in, the leave rules’ specifics tend to vary widely.
For example, factory workers are guided by the Factories Act, 1948. Other businesses, such as service providers, IT and ITES companies, shops, and other commercial establishments come under the purview of their respective state’s Shops & Commercial Establishments Act.
As a result, what one IT company in state A offers its employees by way of paid vacations could differ from what another IT company in state B offers. Yet, there are some leaves that are provided by most Indian employers to their employees and workers.
Let’s take a look at them to have a better grasp of the scenario.
1. Annual Leaves
Also called earned leave (EL) or privilege leave (PL), this leave is what you earn for working a certain number of days for your existing employer. You can use this leave for personal reasons, such as during festivals that aren’t declared holidays, family functions, vacations, etc.
In case you plan to take a long leave that will be for a week or more, most employers will prefer you to plan it in advance to avoid work getting held or disrupted. Such long leaves also need to be informed to your team or manager in advance to help them plan the work schedule accordingly.
Though India’s labour laws make it mandatory for employers to provide annual leaves, their amount varies from state to state. Typically, leave entitlement is computed based on a specific number of days worked (say, 20 workdays in a month). Days worked won’t include the weekends, holidays, or days when the employee didn’t work.
At present, you become eligible for leaves after working for 180 days in a year. Earlier, the period was 240 days. A day’s leave is earned for every 20 days you work. You can carry forward 30 days’ leave to the succeeding year.
A unique feature of annual or earned leaves is that you can convert them to cash via a process called “leave encashment.” Your basic salary is generally considered as the unit of exchange for such leave encashment.
For most employers, one day of EL balance converts to your basic pay for one day. However, some companies and organisations could consider your gross income instead of your basic salary when computing leave encashment.
To understand it all better, let’s consider a scenario where you have 45 days of unutilised leave at the end of a calendar year. In such a case, your employer will be required to pay you 15 days’ leave encashment and allow the balance leave of 30 days to be carried forward to the next calendar year.
It’s important to note here that the Shops and Establishments Act at present typically allows leave encashment only at the end of your employment period (which could be either at the time of your retirement or resignation).
2. Leaves for New Parents
The 1961 Maternity Benefit Act allowed female employees in India 12 weeks of paid maternity leave. However, the 2017 Amendment to the Act increased the time to 26 weeks. This Amendment applies to pregnant women employees working in companies or factories, whether unorganised or organised, where ten or more employees are engaged. Thus, these women can now look forward to a 26-week paid holiday.
If you are a woman employee in India and your employer isn’t willing to let you go on maternity leave, it pays to know your rights. Remember – there’s a penalty for employers who don’t satisfy the mandatory steps under the nation’s laws and regulations related to maternity leave and pay.
Male Central Government employees in India can enjoy paternity leave for 15 days if they have less than two existing children. If you need a paid holiday to care for your newborn child and wife, you can take a paid paternity leave 15 days before or within 6 months from the date of delivery of your child. However, many private companies are still reluctant to give such leaves to parents.
As a result, new parents often struggle to manage their work and personal lives, and women have no other solution but to resign from their jobs to take care of their little ones.
3. Casual Leaves (CL)
Such leaves help meet any unexpected or urgent personal requirements. Unlike planned leaves or annual leaves, CLs are taken all of a sudden. For instance, if you get a call at the office from your home about an urgent plumbing issue, you could take a half-day CL to get it sorted.
Though many states have made it mandatory for employers to provide such paid leaves, others haven’t. Employers in some states like Delhi have a combined entitlement for causal leaves (CL) and sick leaves (SL).
Some Indian employers just have GLs (general leaves) and paid annual leaves to keep it simple. By reducing the category of leaves, they help simplify their company’s leave policy.
4. Sick Leaves (SL)
They are also known as medical leaves (ML) and are provided when you fall sick or meet with an accident. Since these leaves are prone to be misused, employers usually need you to submit a medical certificate signed by a registered medical practitioner, especially if your leave period extends to 2-3 days.
As mentioned earlier, some states like Delhi have a combined entitlement for both SL and CL. Some other states, such as Tripura permit payment of 50% of salary for CL/SL in lieu of full pay.
5. Compensatory Off (Comp-off)
If your company makes you work on a holiday or the weekends due to some urgent or priority-based deliverables, they will offer you a compensatory off (or comp-off) on any other workday. As these leaves occur based on the needs of a company or organisation, they are granted on a case-to-case basis and have a specific process for claiming them.
For instance, if you have worked the last Sunday, you can claim a comp-off on Monday (or any other workday) the following week (or even later). You need to get this comp-off request approved by your immediate manager, which will then get forwarded to HR. Once approved, you will be granted a comp-off leave.
Such leaves usually come with an expiry period of 4 to 8 weeks. This means after having worked a holiday or weekend, you need to utilise your comp-off leave within this expiry period.
Some generous employers may also offer paid leaves for marriage and bereavement. Leaves for the latter are allowed when there’s a death in the family and you need to attend the last rites or take care of personal matters, not to mention the time to grieve.
It pays to know what leaves you are entitled to, as it ensures your right as an employee isn’t violated.