Types of Leave in a Company Every HR Must Know

In every organisation, managing employee leave is not just an administrative task, it’s a core HR function that directly impacts productivity, compliance, and employee satisfaction. Understanding the types of leave available to employees is essential for designing effective HR policies that balance business needs with employee rights.

Whether you’re an HR manager designing a new leave policy or a business owner trying to stay compliant with Indian labour laws, this guide covers the most common and essential employee leave types applicable in Indian workplaces. Let’s explore these leaves in detail and see how an efficient leave management system can help streamline the process.

Employee Leave Types in India

Understanding the various employee leave types is essential for organisations to remain compliant with labour laws and support their workforce effectively. In India, labour laws along with company-specific policies define and regulate different types of leaves in office environments. These leave types address a variety of employee needs such as health, personal emergencies, planned vacations, and life events.

Below is a detailed look at the most common types of leave granted in Indian companies:

1. Privilege Leave / Earned Leave (PL/EL)

Privilege Leave also called Earned Leave is meant for planned absences such as vacations, family functions, or extended personal time off. This leave is earned over time, based on the number of days worked by the employee.

• Accrual: Employees typically accrue 1 day of earned leave for every 20 days worked. For example, if an employee works 240 days in a year, they may earn up to 12 days of PL.

• Usage: Privilege leave must be applied for in advance. It is commonly used for long holidays, religious travel, or attending personal functions.
  
• Carry Forward & Encashment: One of the key features of PL is that it can be carried forward to the next year, usually up to 30–45 days. Many companies allow employees to encash unused earned leave at the end of the year or during exit.
  
• Legal Provision: The Factories Act, 1948 mandates 1 day of earned leave for every 20 days worked for workers in factories.

This type of leave allows employees to take extended breaks without losing pay, supporting long-term well-being.

2. Casual Leave (CL)

Casual Leave is intended for short, unforeseen absences that occur due to personal reasons, emergencies, or urgent work outside the office.

• Typical Limit: Companies usually allow 7 to 10 days of casual leave per year. These are spread across the year and are often granted in small durations such as 1 or 2 days at a time.
  
• Purpose: This leave is used for short-term, unplanned requirements like attending family events, last-minute travel, or minor health issues.
  
• Restrictions: Casual leave often cannot be combined with earned leave or holidays to create long vacations. Also, it usually lapses if not used within the year.

This type of leave provides flexibility for handling unexpected responsibilities without affecting payroll or productivity.

3. Sick Leave (SL)

Sick Leave is granted when employees are ill, injured, or medically unfit to perform their job responsibilities. It is a critical component of any employee benefits package.

• Annual Allotment: Generally, 7 to 12 days of sick leave are allowed per year, depending on company policy or state-level laws like the Shops and Establishment Acts.
  
• Medical Certification: For illnesses lasting more than 2 or 3 days, a medical certificate is usually required to validate the absence.
  
• Non-Encashable: Sick leave usually cannot be carried forward or encashed. It lapses if not utilised.
  

Having a proper sick leave policy ensures that employees do not come to work while unwell, which could affect both their health and workplace productivity.

4. Maternity Leave

Under the Maternity Benefit (Amendment) Act, 2017, women employees in India are entitled to 26 weeks of paid maternity leave for the birth of the first two children.

• Eligibility: A woman must have worked at least 80 days in the 12 months preceding the expected delivery date.
  
• Additional Benefits: The Act also mandates crèche facilities for organisations with 50 or more employees, and flexible return-to-work options.
  
• Adoption & Surrogacy: Women adopting a child under 3 months old or commissioning mothers (through surrogacy) are entitled to 12 weeks of leave.
  

Organisations that offer smooth maternity leave transitions reflect a people-first work culture.

5. Paternity Leave

Although there is no specific law mandating paternity leave in India, many companies offer it as part of progressive HR policies.

• Duration: Usually between 5 and 15 days.
  
• Eligibility: Often granted to male employees immediately after the birth of their child or adoption.
  
• Usage Window: The leave is generally to be availed within the first few weeks of childbirth.

Paternity leave fosters family bonding and supports the idea of shared parenting responsibilities.

6. Compensatory Off (Comp-Off)

Comp-Off is a type of leave granted when an employee works on a weekly off, public holiday, or company-declared holiday due to business needs.

• Application Process: Employees must record their attendance on the day worked and apply for Comp-Off within a stipulated period (often 30 days).
  
• Use Cases: Often used in customer service, sales, and project delivery roles that may require weekend work or holiday shifts.

Tracking comp-offs can be automated through tools like Qandle’s leave and attendance software, which ensures policy compliance and transparency.

7. Bereavement Leave

Bereavement leave is offered to employees when a close family member passes away.

• Duration: Typically ranges from 3 to 7 days depending on the relationship and company policy.
  
• Purpose: This leave provides time for employees to grieve, attend ceremonies, and be with their families.

Though not mandated by law, offering bereavement leave shows compassion and strengthens employee-employer trust.

8. Sabbatical Leave

Sabbatical leave is an extended break provided to employees for higher education, volunteering, research, or dealing with personal health issues.

• Eligibility: Usually offered to employees who have completed a significant tenure—often 3 to 5 years—with the company.
  
• Duration: Can range from 3 months to 1 year. It may be paid, partially paid, or unpaid.
  
• Return Policy: The rejoining process is typically pre-defined and agreed upon before availing the sabbatical.

Sabbaticals act as powerful retention tools and show an organisation’s commitment to employee growth and well-being.

9. Leave Without Pay (LWP)

Leave Without Pay is granted when an employee needs to take time off beyond the available paid leave balance.

• Implication: The days taken as LWP are deducted from the employee’s salary.
  
• Approval: Usually requires strong justification and managerial approval.
  
• Payroll Impact: Affects benefits like PF contribution, bonus eligibility, and increment cycles.
  

Using software like Qandle ensures that LWP is tracked accurately, avoiding payroll errors and compliance risks.

10. Marriage Leave

Marriage leave is a special leave offered to employees during their own wedding.

• Duration: Typically 3 to 5 days.
  
• Once-in-a-Lifetime Leave: Usually offered once during the employee’s entire tenure.
  
• Proof Required: Some companies may ask for a wedding invitation or marriage certificate.

This type of leave contributes to employee happiness and work-life harmony.

11. Voting Leave / Election Leave

Voting leave allows employees to cast their votes during elections, supporting democratic participation.

• Mandate: Employers are required to grant paid leave for voting as per the Representation of the People Act.
  
• Geographical Relevance: Applies mainly to areas where elections are scheduled.

Properly managing voting leave can help businesses remain compliant with state notifications during elections.

Conclusion

Understanding the different types of leave in a company is critical for maintaining a motivated and productive workforce. A well-structured leave policy not only ensures legal compliance but also promotes employee trust and loyalty. By addressing all key employee leave types—from privilege leave to sabbaticals—HR leaders can build a flexible, empathetic, and efficient work culture. Using a digital solution like Qandle’s Leave Management System can automate leave tracking, simplify approvals, and generate accurate reports for payroll and compliance. This not only saves time but also prevents leave-related errors and disputes.