Leave policy as per wage code


Can someone please share some details on how to set up leave policy and manage leaves as per new code?

It would of lot of help. Thank you.


I’m sharing some pointers where you can begin with. Our members can share more as well.
How to design effective leave policies for compliance & employee engagement a very good article to approach it.
also read: https://www.greythr.com/leave-management/leave-types/

Leave Policy in India

To include more, this is a detailed article.


I think the wage code has no impact on leave policy. One indirect aspect would be the leave encashment portion as basic is going to be the crux of it. However it is also noticed that based on Shops & Establishment Act (state wise), entitlements vary. Please have a look at our ready-reckoner https://www.greythr.com/wiki/acts/shops-and-establishments-act-india/


As per Occupational Safety, Health and Working conditions code, 2020, Annual leave with wages entitlement is only of workers.
Please refer to Chapter VII Section 32 of the code.

The code has separate definitions of worker and employee.
Hence, as per this code, employees are not eligible for annual leave with wages.

I think the wage code has no impact on leave policy. One indirect aspect would be the leave encashment portion as basic is going to be the crux of it. However it is also noticed that based on Shops & Establishment Act (state wise), entitlements vary. Please have a look at our ready-reckoner https://www.greythr.com/wiki/acts/shops-and-establishments-act-india/

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  1. (1) No worker shall be required or allowed to work, in any establishment or class of establishment for more than—

(a) eight hours in a day; and

(b) the period of work in each day under clause (a) shall be so fixed, as not to exceed such hours, with such intervals and spread overs , as may be notified by the appropriate Government:

Provided that subject to clause (a) in the case of mines,—
(i) the persons employed below ground in a mine shall not be allowed to work

for more than such hours as may be notified by the Central Government in any day;

(ii) no work shall be carried on below ground in any mine except by a system of shifts so arranged that the period of work for each shift is not spread over more than the daily maximum hours as notified under clause (i);

(iii) no person employed in a mine shall be allowed to be present in any part of a mine below ground except during the periods of work shown in respect of him in the register maintained under clause (a) of section 33:

Provided further that subject to clause (a) that the hours of work in case of motor transport worker shall include—

(i) the time spent in work done during the running time of the transport vehicle; (ii) the time spent in subsidiary work; and
(iii) period of mere attendance at terminals of less than fifteen minutes.

Explanation.—For the purposes of this sub-section—

(a) “running time” in relation to a working day means the time from the moment a transport vehicle starts functioning at the beginning of the working day until the moment when the transport vehicle ceases to function at the end of the working day, excluding any time during which the running of the transport vehicle is interrupted for a period exceeding such duration as may be prescribed by the Central Government during which period the persons who drive, or perform any other work in connection with the transport vehicle are free to dispose of their time as they please or are engaged in subsidiary work;

(b) “subsidiary work” means the work in connection with a transport vehicle, its passengers or its load which is done outside the running time of the transport vehicle, including in particular—

(i) the work in connection with accounts, paying of cash, signing of registers, handover of service sheets, the checking of tickets and other similar work;

(ii) taking over and garaging of the transport vehicles;

(iii) travelling from the place where a person signs on to the place where he takes over the transport vehicle and from the place where he leaves the transport vehicle to the place where he signs off;

(iv) work in connection with the upkeep and repair of the transport vehicle; and

(v) the loading and unloading of the transport vehicle;

Daily and weekly working hours, leave, etc.

Weekly and compensatory holidays.

(c) “period of mere attendance” means the period during which a person remains at his post solely in order to reply to possible calls or to resume action at the time fixed in the duty schedule.

(2) Notwithstanding anything contained in sub-section (1), the hours of work for working journalist shall, subject to a maximum of one hundred and forty-four hours of work during any period of four consecutive weeks and a period of not less than twenty-four consecutive hours of rest during any period of seven consecutive days, be such as may be prescribed by the Central Government.

(3) Notwithstanding anything contained in sub-sections (1) and (2), a sales promotion employee or the working journalist,—

(i) in addition to such holidays, casual leave or other kinds of leave as may be prescribed by the Central Government, shall be granted, if requested for—

(a) earned leave on full wages for not less than one-eleventh of the period spent on duty;

(b) leave on medical certificate on one-half of the wages for not less than one-eighteenth of the period of service;

(ii) may accumulate earned leave up to such maximum limit as may be prescribed by the Central Government;

(iii) shall be entitled for the limit up to which the earned leave may be either encashed or availed of at a time by him and the reasons for which such limit may be exceeded shall be such as may be prescribed by the Central Government;

(iv) shall,—

(a) when he voluntarily relinquishes his post or retires from service; or

(b) when his services are terminated for any reason whatsoever (not being termination as punishment),

be entitled to cash compensation, subject to such conditions and restrictions as may be prescribed by the Central Government (including conditions by way of specifying the maximum period for which such cash compensation shall be payable), in respect of the earned leave earned by him and not availed of;

(v) who dies while in service, his heirs shall be entitled to cash compensation for the earned leave earned by him and not availed of his heirs shall be paid the cash compensation in respect of any period of earned leave for which he or his heirs, is or are entitled to cash compensation under clause (iv) or clause (v), which shall be an amount equal to the wages due to him for such period.

(4) Notwithstanding anything contained in this section, the working hours of an adolescent worker shall be regulated in accordance with the provisions of the Child and AdolescentLabour(ProhibitionandRegulation)Act,1986.

  1. (1) No worker shall be allowed to work in an establishment for more than six days in any one week:

Provided that in any motor transport undertaking, an employer may, in order to prevent any dislocation of a motor transport service, require a worker to work on any day of weekly holiday which is not a holiday so arranged that the worker does not work for more than ten days consecutively without a holiday for a whole day intervening.

(2) The appropriate Government may, by notification, exempt such workers as it thinks fit from the provisions of sub-section (1), subject to such conditions as may be prescribed.

(3) Where, as a result of the passing of an order or the making of a rule under the provisions of this Code exempting an establishment or the workers therein from the provisions of sub-section (1), a worker is deprived of any of the weekly holidays, the worker shall be allowed, within the month in which the holidays were due or within the two months immediately following that month, compensatory holidays of equal number to the holidays, so deprived.

  1. There shall be paid wages at the rate of twice the rate of wages in respect of overtime work, where a worker works in an establishment or class of establishment for more than such hours of work in any day or in any week as may be prescribed by the appropriate Government and the period of overtime work shall be calculated on a daily basis or weekly basis, whichever is more favourable to such worker:

Provided that a worker shall be required to work overtime by the employer subject to the consent of such worker for such work:

Provided further that the appropriate Government may prescribe the total number of hours of overtime.

  1. Where a worker in an establishment works on a shift which extends beyond midnight,—

(a) for the purposes of section 26, a weekly holiday for a whole day shall mean in his case a period of twenty-four consecutive hours beginning when his shift ends;

(b) the following day for him shall be deemed to be the period of twenty-four hours beginning when such shift ends, and the hours he has worked after midnight shall be counted in the previous day.

  1. (1) The work shall not be carried on in any establishment by means of a system of shifts so arranged that more than one relay of workers is engaged in work of the same kind at the same time.

(2) The appropriate Government or subject to the approval of the appropriate Government, the Chief Inspector-cum-Facilitator, may, by written order and for the reasons specified therein, exempt on such conditions as may be deemed expedient, any establishment or class of establishments or any department or section of an establishment or any category or description of workers therein from the provisions of sub-section (1):

Provided that the provisions of this sub-section shall not apply to mines.

  1. No worker shall be required or allowed to work in a mine or factory if he has already been working in any other such similar establishment within the preceding twelve hours, save in such circumstances as may be prescribed by the appropriate Government.

  2. (1) There shall be displayed and correctly maintained in every establishment a notice of periods of work, showing clearly for every day the periods during which workers may be required to work in accordance with the provisions of this Code.

(2) The form of notice required by sub-section (1), the manner of display of such notice and the manner in which such notice shall be sent to the Inspector-cum-Facilitator shall be such as may be prescribed by the appropriate Government.

(3) Any proposed change in the system of work in any establishment which will necessitate a change in the notice referred to in sub-section (1) shall be intimated to the Inspector-cum-Facilitator before the change is made, and except with the previous sanction of the Inspector-cum-Facilitator, no such change shall be made until one week has elapsed since that last change.

Extra wages for overtime.

Night shifts.

Prohibition of overlapping shifts.

Restriction on double employment in factory and mine.

Notice of periods of work.

Annual leave with wages, etc.

  1. (1) Every worker employed in an establishment shall be entitled for leave in a calendar year with wages subject to the following conditions, namely:—

(i) that he has worked one hundred and eighty days or more in such calendar year;

(ii) that he shall be entitled for one-day leave for every twenty days of his work, in the case of adolescent worker for fifteen days of his work, and in case of worker employed below ground mine, at the rate of one day for every fifteen days of his work, in such calendar year;

(iii) any period of layoff, maternity leave or annual leave availed by such worker in such calendar year shall be counted for calculating the period of one hundred and eighty days or more under clause (i), but he shall not earn leave for the period so counted;

(iv) any holidays falling between the leave availed by such worker (in a calendar year or prefixed or suffixed holiday) shall be excluded from the period of leave so availed;

(v) in case of such worker whose service commences otherwise than on the first day of January shall be entitled to leave with wages at the rate specified in clause (ii), if he has worked for one-fourth of the total number of days in the remainder of the calendar year;

(vi) in case such worker is discharged or dismissed from service or quits employment or is superannuated or dies while in service, during the course of the calendar year, such worker or his heir or nominee, shall be entitled to wages in lieu of the quantum of leave to which such worker was entitled immediately before his discharge, dismissal, quitting of employment, superannuation or death, calculated as specified in preceding clauses, even if such worker has not worked for the required period under this sub-section making such worker eligible to avail such leave, and such payment shall be made—

(a) where such worker is discharged or dismissed or quits employment before the expiry of the second working day from the date of such discharge, dismissal or quitting; and

(b) where such worker is superannuated or dies while in service, before the expiry of two months from the date of such superannuation or death;

(vii) if such worker does not in any one calendar year take the whole of the leave allowed to him under this sub-section and the rules made thereunder, then, any leave not taken by him shall be added to the leave to be allowed to him in the succeeding calendar year so that—

(a) the total number of days of leave that may be carried forward to a succeeding year shall not exceed thirty days; and

(b) such worker, who has applied for leave with wages but has not been given such leave in accordance with this sub-section and the rules made thereunder shall be entitled to carry forward the leave refused without any limit;

(viii) without prejudice to clause (vi) such worker shall be entitled on his demand for encashment of leave at the end of calendar year;

(ix) such worker shall be entitled, where his total number of leave exceeds thirty days under sub-clause (a) of clause (vii), to encash such exceeded leave.

(2) The appropriate Government may, by notification, extend the provisions of sub-section (1) to any other establishment except railway establishment.

(3) The provisions of sub-section (1) shall not operate to the prejudice of any right to which a person employed in a mine may be entitled under any other law or under the terms of any award, agreement or contract of service:

Provided that if such award, agreement or contract of service, provides for longer annual leave with wages than that provided in sub-section (1), the quantum of leave, which the person employed shall be entitled to, shall be in accordance with such award, agreement or contract of service but leave shall be regulated in accordance with the provisions of sub-section (1) with respect of matters not provided for in such award, agreement or contract of service:

Provided further that where the Central Government is satisfied that the leave rules applicable to persons employed in any mine provide benefits which in its opinion are not less favourable than those provided for in sub-section (1) it may, by order in writing and subject to such conditions as may be specified therein exempt the mine from all or any of the provisions of sub-section (1).

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  • · People are able to take holidays effectively and with clarity;
  • · Performance of colleagues is not affected by absence at work;
  • · Work of the company, productivity and deliverables are not impacted due to your absence.

Working Days And Working Hours:

  • · Official working days are from to .
  • · For any day that you do not show up in a week, put in extra hours on other days to complete the backlog.
  • · Official working hours are from am to pm on weekdays and am to pm on Saturdays. Sundays are weekly off days.
  • · Integrity is one of the key ingredients in [company name] work environment. Come on time and leave on time – unless there is a backlog that requires you to stay till late or a deadline for an urgent project. Nobody will hold you back if your work is done earlier. We encourage you to come early and finish early.

[if there are different branches and working days and/or office timings varies from branch to branch, a table can be provided stating the details of the same]

If Employee/Consultant is required to work on a Sunday or holiday:

· In case of exigencies, if an employee is required to work on Sundays or on holidays with approval from Reporting Managers, that person shall be allowed to take a day off subject to the employee working for hours. The Reporting Manager shall bear in mind the team-coordination in case any member takes a day off during such a weekday.

Criteria for Work From Home:

· This option can be granted only with the alignment of the [appropriate authority] and they are satisfied that there will be no impact on the work. If you are taking the option of work from home, 8 hours of work structure must be sent to Department copying [appropriate authority].

Criteria For Taking Half-Day:

· Half day is counted if the employee works for hours of the day.

Submission of Daily Report:

  • · Submission of daily report as per company rules. If your Reporting Manager complains in writing about not submission of daily report that day will also be considered as leave.
  • · Employee has to submit daily report to their Reporting Manager before leaving the office.

Types of Leaves:

  • · What constitutes a privilege leave? ​The Company refers to vacation or holiday as privilege leaves.
  • · What constitutes a casual leave? The Company refers to sudden personal emergencies as casual leaves
  • · What constitutes a sick leave? ​Sick leave shall mean a leave of absence granted because of illness.

Employees who have ​ completed [period, eg. One year] of continuous employment ​ or are Confirmed :

  • · Number of Privilege leaves in a year – days
  • · Sick Leave – days in a year
  • · Casual Leave – days in a year

Leaves for employees who have ​ not completed [period, eg. one year] of employment ​ or are on Probation Period :

· Any leave will be without pay leave.

  • · Privilege leaves during probation period – days
  • · Sick Leave during probation period – days
  • · Casual Leave – days in a year


· Privilege leave earned during the previous year shall be credited to employees’ individual account on first of January/April of the following year or on monthly basis on prorata.

· Any unused privilege leave will be added to the next period, provided that in no case such number of accumulated privilege leave will be more than days at any point of time or Maximum Carry forward of privilege leaves will be days.

· Sick Leave & Casual Leave will be expired at the end of the year. No Carry forward of Sick & Casual Leave to next leave year.

· Undue number of holidays must not be taken. In case of prolonged sick leave impact on work has to be kept in mind.

· Privilege leaves cannot be taken continuously for more than days.

· For leaves planned for more than days (inclusive of weekends), inform the Leadership a month in advance in order to allocate your projects accordingly.

· For more than days of continuous sick leave, one must submit appropriate relevant medical documentation, including diagnostic tests results, doctors’ prescription and medical shop bills (not one but all of these).

· Every leave needs to be approved by the Leadership team. Drop an email at least one week in advance and get it approved. Leaves are not to be taken at the cost of work. It is highly recommended that you create and share a workable structure for ensuring how work will get done without disruption and delays and take alignment of the person you report to and the Leadership.

· If two or more people from the same team is taking leave on the same day/period, alignment must be taken from the [appropriate authority].

· Last minute leaves are not encouraged. Last minute leaves are likely to impact your own, your colleagues’ and the company’s work and the results you produce. It shall also trigger disciplinary actions.

· The Leadership holds the right to approve or disapprove your leaves depending on the current project, your requirement for special projects, and your backlog.

· If you take leave without due authorization under this policy, you would still be expected to finish your deliverables in such a way so that your teammates are not affected and work can progress uninhibited. If you fail to do this, that would reflect on your performance review, bonus and future increments.

· Unauthorized absence in a month can lead to disciplinary action, extending to deduction of salary or termination of existing consultancy arrangements in appropriate cases.

Attendance Protocol

[the following clause can be included if the company has access card reader system]

Attendance through Access Card/Biometric Reader System

The Automatic Access Machine is available at the company office. It is located at the [entrance gate or the reception]. Identity cards cum access cards/biometrics are allotted/registered to every employee of the company situated at the office which captures record of the attendance. Every employee has to punch/swipe their identity card cum access cards/biometric at the time of entering or leaving the office premises.

[the following clause can be included if the company has ARS sheet system for attendance of employees]

Attendance through Attendance Record Spreadsheet (ARS) sheet

The ARS sheet is available at the company office and is placed at the [entrance gate or reception]. The ARS sheet ensures that the attendance is captured for every employee working at the office. Hence, all employees in order to capture their attendance have to follow the guidelines given below. The ARS sheet should legibly filled and properly maintained without any scribbling or overwriting. Employees have to ensure that they write their correct employee code, name and signature in the ARS sheet.

No employee is allowed to sign for future timings, future attendance and for proxy for friends and colleagues for a future date. This is a serious offence involving integrity and code of conduct. Disciplinary action including termination can be taken against the concerned employee(s).

[Other specifications which can be covered under the Attendance Protocol clause are :

· What happens when the employee forgets to bring his ID cum access card

· ‘Out-door’ status in case employee is visiting another branch of the company or attending to office work outside the premises

· If there is an option of ‘tour’ when the employee is on official tour for the company

· If there are multiple offices/branches/locations of the company, and the employee is on visit such other location where access card reader system is installed, it can be provided here that, ​ “the employee must swipe his/her card at such respective location”​

Duty of the HR personnel

  • · On receiving the attendance sheet/, the HR personnel should ensure that the accuracy of attendance sheet. Incase of any discrepancy the same has to be informed via mail to the immediate [reporting authority].
  • · Once the comments are received from the Immediate [reporting authority] the HR personnel should update the same in the system.
  • · The data that is collated should be sent to the payroll team for salary processing.

Late/Early Coming:

· If you come at any time after am or leave early any time before pm, you will be considered late/early and being late or early on three occasions in a month will be counted as one leave. This absence will be adjusted against a privilege/casual leave. If at that time you have no privilege leaves remaining, this will be adjusted against your salary.

· If you are late by more than an hour [specify time] or leave early by more than an hour [specified time], it will be counted as a half day. Your salary will be deducted pro rata due to unauthorized absence.

Holidays and Festivals:

1st​ January, 26th​ January, 15th​ August, 2nd​ October, Holi, Dusshera, Diwali, and 25th​ December (Christmas) are official holidays. If you need holiday for any other festival, make a request to the [appropriate authority] and it will be considered.

[a list of holidays covering more festivals can be provided here]

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