Leave Policy in India 2026: Types of Leave, Rules & Free Policy Template
A well-defined leave policy is the backbone of any HR system. In India, leave entitlements are governed by a combination of central and state-level laws, making it essential for employers to understand the rules before drafting their company's leave policy.
Types of Leave in India
1. Earned Leave (Privilege Leave)
Earned leave is accrued based on the number of days worked. Employees typically earn 1 day of leave for every 20 days worked. EL can be carried forward to the next year and encashed on separation. Most states allow accumulation of 30-45 days.
2. Casual Leave (CL)
Casual leave is meant for unforeseen personal needs. It usually cannot be carried forward and lapses at the end of the calendar year. Most states grant 7-12 casual leaves per year.
3. Sick Leave (SL)
Sick leave is granted for medical reasons. Many states require a medical certificate for sick leave exceeding 2-3 consecutive days. Entitlement varies from 7 to 12 days depending on the state.
4. Maternity Leave
Under the Maternity Benefit Act, 2017, women employees are entitled to 26 weeks of paid maternity leave for the first two children, and 12 weeks for the third child onwards. This applies to establishments with 10 or more employees. Employers with 50+ employees must also provide creche facilities.
5. Paternity Leave
While there is no statutory paternity leave for private sector employees, central government employees get 15 days. Many private companies now offer 5-15 days of paternity leave as a progressive policy.
6. Compensatory Off
When an employee works on a public holiday or weekly off, they are entitled to a compensatory day off. This must typically be availed within a specific period (usually within the same month or the next).
7. Bereavement Leave
Not mandated by law, but most companies offer 3-5 days of leave in case of death of an immediate family member as a compassionate benefit.
State-Wise Leave Entitlements
Leave entitlements in India vary significantly by state. Here's a quick reference for major states:
Note: "—" indicates that the state may combine sick and casual leave. Always refer to the latest state Shops & Establishments Act for accurate figures.
How to Draft a Leave Policy for Your Company
- Check your state's laws — Ensure your policy meets the minimum statutory requirements
- Define all leave types — Clearly list each type, entitlement, and rules for availing
- Set carry-forward rules — Specify how many leaves can be carried forward and any caps
- Document the approval process — Who approves leave? How far in advance should it be applied?
- Address leave without pay (LWP) — Define what happens when an employee exhausts all leave
- Include special leaves — Maternity, paternity, bereavement, study leave, election duty
- Communicate clearly — Make the policy accessible to all employees via your HRMS or employee handbook
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