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Annual Leave Entitlements in India: A Guide for Overseas Employers

Every country has distinct laws on leave entitlements for employees, and these can be quite different from those in your company’s home country.  If you are hiring employees in India you are entering a new jurisdiction, and you need know how to meet India’s rules on annual leave.

Without a local resource, how will you learn the specifics and make sure that you are in compliance?  We have put together this guide to get you started understanding India’s leave entitlements and how they are calculated.

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Statutory Leave Entitlements in India

It is customary to include terms in the employment contract about how much leave is allowed, and those amounts will need to at least meet the statutory minimums in India.  To complicate things further some types of leave will vary according the industry/sector or state of employment.  There are a number of different laws that govern leave types and amounts, for both local and expat employees.

Types of Leave in India

We had a client who was reviewing an employee’s contract, and had questions about the amount of leave that they were entitled to.  The client also asked if it depended on the state or province for the amount of leave.  Our response was that only casual and sick leave will vary according to the state of employment.

Annual Holiday Leave

We told our client that the annual 24 days of leave provided in the employee’s contract is more than the statutory minimum of 12 days per 240 days of service, so they are in compliance.  There are an additional 10 public holidays each year that are also paid.

Sick and Casual Leave

Sick and casual leave can also be taken for emergency or health issues, and the number of days will depend on the Indian state.  This is in addition to annual leave, and can only be taken after the completion of a probation period.

Maternity Leave

Female employees in India are entitled to 12-26 weeks of maternity leave, and can be taken as early as 8 weeks prior to delivery.  During this time, they will receive their entire daily wage plus a medical bonus if health benefits are not provided by the employer.

The Shield GEO Solution

Leave entitlements in India are complex and require a level of expertise in understanding the country’s employment laws. It may be difficult to access this information and make sure you are offing the correct amount of leave for your employees. It will be challenge matching your company’s policy on leave with Indian’s statutory entitlements.  

We can offer you a complete employment solution in India, from payroll, tax withholding, structuring the employment contract, and calculating leave for your employees.  Through our local employer of record and in country experts, we will ensure that you are in full compliance with Indian employment law.

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