Various Leave Rules in India – Difference Between CL, EL, PL & Other Leaves


Various Leave Rules in India - Difference Between CL, EL, PL & Other Leaves

Leaves are the time offs given to the employees working in an organization. Employees were sometimes required to work 24/7, leading them to become exhausted physically and mentally and leading them down a path toward decreased productivity. Employees had to lose their wages if they needed to go on leave for any reason. Because of the revolution and the laws governing labor passed by the government, employees do not have the right to take various holidays. Employees can take any time off from work and utilize their time to improve their performance at work. The Indian government offers a wide range of leave options within India that are provided to employees, such as paid leaves, casual leave, pregnancy leave, sick leave, paternity leave, menstrual time, compensatory off leaves, and, finally, losing pay leaves. The leaves are added to the employee’s accounts, and employees must use them whenever required.

The leave policies in India are changing with the growing resentment among the employees to work as they wish. Keeping the employees’ wishes in mind, the government has introduced a 5-day work week so that employees would have ample time to spend with family and friends. Annual leave rules in India mention that the leaves are to be updated every financial year, and any balance leaves would be carried forward per the company’s policy. 

Types of Leaves:

3 major types of leaves are common to every employee, such as earned leave, sick leave, and casual leave, and other types of leaves are given on a need basis and requirement basis. Certain types of leaves, such as maternity and paternity, are to be provided mandatorily by the employer to their employees. Below is the list of leaves available in most of the organizations in India.

Earned Leaves (EL)/ Privilege Leaves (PL):

EL leave full form is Earned leave, also referred to as Privilege leave. As the name suggests, it is the leave that the employees earn for their service in the organization. Earned leaves are obtained based on the number of days worked in the organization. For example, 1 earned leave would be provided for every 20 days worked in the previous year or quarter. The number of days considered for calculating earned leaves does not include the holidays, Saturdays, Sundays, or days when the employee is not working. It is the number of days an employee has worked in a previous quarter or year. 

Earned leaves are usually planned and taken for marriage, vacations, functions, etc. Privilege leaves are to be given mandatorily by any organization as per the Labour Act, Factories Act, and the rules and regulations given by the Ministry of Labor and Employment. One of the unique features of these kinds of leaves is that these leaves can be carried forward to the next quarter or year. The number of leaves that can be carried forward would be decided by the state governments in India.

Earned leaves are the only kind of leaves that can be cashed if not utilized during the period of employment. The encashment would be calculated on the last salary drawn by the employee. The maximum number of leaves that could be encashed depends on the state government rules. The employee’s basic pay at the time of encashment or the gross income is considered for calculation purposes.

Privilege leave is a form of long leave where employees take more than 3-4 leaves at a time. Employees would prefer to take these kinds of leaves only after the exhaustion of other kinds of leaves as these leaves can be encashed, whereas other leaves cannot be encashed.  

Casual Leaves (CL):

Casual leaves are offered by a few employers to help the employee’s unexpected needs. Most companies split some of their earned leaves to give as casual leave, whereas a few employers offer casual and earned leaves. Casual leaves can be taken on a full-day basis or a half-day basis. These kinds of leaves are mandatory in certain states, whereas it is optional in other states. Most of the states in India provide up to 12 leaves as casual leaves.

Casual leaves can be utilized anytime in the calendar year, and the catch in this is that these leaves cannot be carried forward to the next calendar year. The number of casual leaves is calculated based on the number of days worked in the previous year. The number of leaves that can be given varies from one state to another.

Sick Leave (SL):

Sick leaves, also known as Medical leaves, must be provided per the Industrial Acts in India. The employees can take sick leaves without any prior intimation as these leaves are designed to cover unforeseen circumstances such as employees falling sick and taking the leaves. Sick leaves cannot be carried forward to the next calendar year and will be utilized in the same calendar year. The number of sick leaves would usually be 14 days in most of the states. It is to be noted that sick leaves are mandatory and cannot be carried forward or accumulated. Any unutilized sick leaves would expire at the calendar year’s end. Sick leaves are usually granted to employees so they can leave work should they be unwell. To prevent sick leave abuse, employers could request employees to provide a medical certification in case they want to claim additional sick leave.

Maternity Leave (ML):

Maternity leaves are mandated by law in India and are given to any woman carrying or pregnant. The Maternity Act of 1961 has mandated employers to grant the benefit of 26 weeks of paid time off for any woman who has worked for the company and attained a minimum of 80 hours of work during the twelve months before the date of delivery of anticipated information. The woman employee wishes to avail the maternity leaves at any point for the designated number of days/weeks. The other important thing to note is that it is a paid leave in the sense that the employee would be getting a full salary even when on leave. The Maternity Benefit is a consequence of the central government’s law. For the first two children, women employees can take advantage of the benefit of 26 weeks of paid leave, and for the third one, only 12 weeks are available. It also addresses pregnancy, miscarriage, and tubectomy-related events.

The major advantage of these kinds of leaves is that the employer cannot remove the employee when they apply for maternity leave or during their leave period. Employees would have the right to sue the employee if she is denied her rightful maternity leave.

Paternity Leave (PL):

The other kind of leave is paternity leave which is becoming quite popular nowadays. Paternity leave is not mandatory as per the law, but a few companies offer up to 15 days of leave by adjusting the existing leaves or granting new leaves. There is no formal law for this, but employers are providing the option to avail these leaves for men who became parents. Paternity leave can be availed anytime within 6 months of childbirth. This leave is meant for the newly became fathers to take care of their children and spend quality time with them.

Menstrual Leave:

The new kind discussed in India is the Menstrual Leave. Some schools in Kerala already offer menstrual leaves to girls above 18 years of age. The number of leaves under this section varies from country to country, and the concept is still developing. Some colleges in Kerala came up with the idea of attendance relaxation for girl students instead of giving formal leaves. This decision was taken so that the girl students can take menstrual leaves at any point, but the overall attendance is to be maintained.

Compensatory Off (Comp Off):

Compoff or compensatory off refers to the time available to employees for working overtime and on dates like holidays or weekends. Most employees are required to work overtime or work on additional days because of specific business obligations and are given a comp-off. These kinds of leaves are not mandatory as per the law. Employees have to take the approval of their reporting manager and then send the approval to HR, who would, in turn, approve the comp off. It is to be noted that there is an expiry period for the compensatory off leaves provided by the employers, so employees had to utilize their comp off leaves within the stipulated period. 

Loss of Pay or Leave without pay (LOP/LWP):

Sometimes, the employee’s balance of leave is depleted for a specific reason. However, the employee still requires additional days. In such situations, Loss of pay leaves or Leave without pay would come into action. As per this leave, the employee would not be entitled to the salary for the days he/she is absent from work. These leaves are not mandatory as per the law and are given at the employer’s sole discretion. Employers might be particular about not giving prior intimation while availing leaves and might consider leaves taken in such situations as loss of pay leaves. The salary would be deducted for the days the employee was absent.

Covid Leave:

The recent addition to the list of leaves is the Covid leave, where the organizations had given 15 days of paid leave during the covid-19 pandemic. In certain circumstances, employers give paid leave to avoid the losses arising from the sick employee attending his/her duties. Covid was a contagious disease, and employees were advised not to visit the office if they tested positive for Covid. Employees needed to submit a covid positive certificate, after which the organization’s HR would add the Covid leaves to the employee’s account.

Comparison of Leaves:

Type of LeavesEarned LeaveCasual LeaveSick LeaveMaternity Leave
Quantum of leaves1 day leave for every 20 days worked in previous year12 days 12 days26 weeks for first 2 children and 12 weeks for third child
Entitlement On working 240 days in the previous year No requirements of workingNo requirements of workingShould have worked at least 80 days in the past 12 months preceding the delivery expected data
AccumulationCan be accumulated up to 45 days in a calendar yearNo accumulation is permitted and the leaves would expire at the end of the calendar yearNo accumulation is permitted and the leaves would expire at the end of the calendar yearNo accumulation as it would be given on need basis
Computation of leavesNumber of days worked in the previous year excluding weekends, holidays and non-working days. No requirements of workingNo requirements of workingAs per the provisions on Maternity Benefit Act, 1961. 
EncashmentCan be encashed up to 30 leaves per year or 450 leaves during the service.Cannot be encashedCannot be encashedCannot be encashed
Leave Approval Prior approval required from managerPrior approval required from managerPrior approval required from managerPrior approval required from manager
Mandatory or OptionalMandatory as per the lawMandatory as per the law in certain statesMandatory as per the lawMandatory as per the law
Carry ForwardCan be carried forward to the next calendar yearCannot be carried forward to the next calendar yearCannot be carried forward to the next calendar yearCannot be carried forward to the next calendar year

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Susheel Agarwal

Namaste. I'm Abhinay Nedunuru, a Fellow of the Insurance Institute of India with a passion to make insurance simple and crisp. I write on insurance and investment. I have a passion for teaching and training in particular to insurance. I'm currently doing my PhD from IIM in Management.