Employee Benefits in India – Paid Leave

In India, there is no standard structure of paid leave for employees. Different sectors follow different structures. Following factors influence the leave structure –

1)     Employer Type – Government, Semi-Government, or Private

2)     Type of Industry

3)     Central or Federal Legislation’s

4)     State or Local Legislation’s

5)     Employee Benefits

6)     Collective bargaining by Trade Unions

According to Factories Act, 1948, Shops and Establishment Act of various states and Maternity Benefit Act, 1961 following rules shall be adhered to, however employers are free to modify these rules as long as they are providing anything better than what has been listed by Government.   

1)      No adult worker shall be required or allowed to work in a factory for more than 48 hours in any week.

2)      No adult worker shall be required or allowed to work in a factory for more than nine hours in any day

3)      The periods of work of adult workers in a factory each day shall be so fixed that no period shall exceed five hours and that no worker shall work for more than five hours before he has had an interval for rest of at least half an hour

4)      The periods of work of an adult worker in a factory shall be so arranged that inclusive of his intervals for rest, they shall not spread-over more than ten and a half hours in any day

5)      No adult worker shall be required or allowed to work in a factory on the first day of the week [Sunday], unless he has or will have a holiday for a whole day on one of the three days immediately before or after the said day

6)      Every worker who has worked for a period of 240 days or more in a factory during a calendar year shall be allowed during the subsequent calendar year, leave with wages for a number of days calculated at the rate of (a) if an adult, one day for every twenty days of work performed by him during the previous calendar year; (b) if a child, one day for every fifteen days of work performed by him during the previous calendar year.

7)      Female employees of company shall be eligible to avail maternity leave of 12 weeks

Weekly-off's is not identical across industries in India. Many industries work for SIX days of week, several others work for FIVE days of week and there are few that work for FIVE and a-half days of week.

Following types of paid leave are given to employees in India –

1)      Public Holiday – These holidays are declared by Central and State Governments. Private companies can decide to follow all or few of the declared holidays. These holidays are influenced by prevalent festivals in a State and religious beliefs of employer. Usually companies decide to give 10 – 15 days of Public Holidays to their employees. However, Independence Day and Republic Day of India shall be compulsory holiday for all companies in India.    

2)      Sick Leave – Falling sick is beyond the control of an individual. Employees can take sick leave, if they are unwell. This type of leave is uncommon across industries. Employers have policies to let their employees take 6 – 12 days of sick leave in a calendar year. Employees shall produce medical and fitness certificate on their return from leave, if they have availed THREE days or more of continuous sick leave.   

3)      Casual Leave – Emergency, accidents or unexpectedness is beyond the control of an employee. To address such situations, employees are allowed to take casual leave. Similar to sick leave, this leave is uncommon across industries. This leave is prevalent manufacturing set-ups. Employers have policies to let their employees avail 6-12 days of casual leave.

4)      Earned Leave – According to Factories Act, 1969, an adult employee shall be allowed to take one day of leave for every twenty days of work performed by him during the previous calendar year. This is very common type of leave in India. Usually, employers have policies to allow their employees take 18-24 days of leave in a calendar year. Some industries do not segregate leave into sick, casual and earned leave; instead they allow their employees to take 30 days of earned leave in a calendar year.  Earned leave is also called as Paid Vacation or Paid Time-Off.

5)      Bereavement Leave – Some companies allow 3-5 days of bereavement leave in case of death in immediate or extended family.

6)      Maternity Leave – As per Maternity Benefit Act, a female employee of the company is entitled to take 12-weeks of maternity leave. The legislation is silent on marital status of female employee. As a best HR practice, some companies in India allow 24 weeks of maternity leave to their female employees. 

7)      Paternity Leave – Allowing paternity leave of male employees is not a legal requirement in India. However, some employers have policies to let their male employees avail 3-5 days of paternity leave. If it is compulsory to be married to avail paternity leave is open for debate.

8)      Birthday Celebration Leave – As a best HR practice, many companies in India allow their employees to avail paid day off on their birthday.

9)      Wedding Anniversary Celebration Leave - As a best HR practice, many companies in India allow their employees to avail paid day off to allow them celebrate their wedding anniversary.

10)   Marriage Leave - As a best HR practice, many companies in India allow their employees to avail paid day off of 3-5 days for their marriage.

While explaining about paid leave benefits, it is important to discuss about rules to avail Earned Leave in India. While letting their employees avail Earned Leave, many companies follow “Blanket Coverage” while some other follows “Non-Blanket Coverage”.

Blanket Coverage – Any weekend or Public Holiday that might occur during your earned leave or paid vacation shall be considered as part of your leave. For example, if an employee avail leave on Friday and following Monday then it shall be considered as FOUR days of leave instead of TWO days of leave.

Non-Blanket Coverage – Weekends or Public Holidays that might occur during your earned leave shall NOT be considered as part of your leave. Earned leave availed on otherwise working day shall only be considered as leave.

We hope this information will be of use to you. In case of any queries, write to us.

Composed By: Sanjeev Himachali

Email ID – Sanjeev.himachali@gmail.com

Twitter - @Sanjuhimachali

V: 7895

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