Annual Leave
Annual leave with wages is now governed by the Occupational Safety, Health and Working Conditions (OSHWC) Code, 2020. The Code replaced the leave rules that sat across 13 earlier acts with a single national framework. This page covers who qualifies and how the leave is calculated.
Eligibility
Section titled “Eligibility”A worker qualifies for annual leave if they worked 180 or more days in a calendar year. For this count, lay-off, maternity leave, and annual leave already taken still count as days worked, but a worker cannot earn leave for a period they did not work.
A worker earns one day of leave for every 20 days worked. Teenage workers and those in underground mining earn one day for every 15 days.
Worked example
Section titled “Worked example”A worker works 240 days in a calendar year.
Leave = 240 ÷ 20 = 12 daysAt a rate of one day per 20 days, the worker earns 12 days of leave with wages for that year.
Sandwich leave
Section titled “Sandwich leave”A holiday that falls between days of leave does not count as leave taken. This prevents an employer from forcing a worker to use a holiday as part of their leave.
Carry-forward and encashment
Section titled “Carry-forward and encashment”- A worker can carry forward up to 30 days of earned leave to the next year.
- If the accumulated leave exceeds 30 days, the worker can demand encashment of the excess.
- On resignation, dismissal, retirement, or death, the worker (or their heirs) is entitled to wages in place of any unavailed leave.
Applicability
Section titled “Applicability”The leave provisions apply to workers. The OSHWC Code defines a worker as a person doing manual, unskilled, skilled, technical, operational, clerical, or supervisory work. It excludes people in managerial or administrative roles, and supervisors earning above ₹18,000 a month. Leave applies to practically all establishments where workers are employed.
State rules
Section titled “State rules”The Code is the floor, not the ceiling. State shops and establishments acts can grant more generous leave, and where they do, the worker gets the better benefit. For example, one state may allow 45 days of carry-forward where the Code allows 30. Check the state rules that apply to you so you neither underpay leave nor fall foul of a stricter local rule.
Working hours
Section titled “Working hours”The OSHWC Code sets a normal working week of up to 48 hours and requires at least one rest day a week. Overtime is paid at twice the normal rate. See the Labour Codes overview.