Leave rules in India: the Code sets annual leave, your state sets the rest.

For the workers the OSH Code covers, in establishments with 10 or more workers, in force since 21 Nov 2025: someone who works 180 days or more in a calendar year earns 1 day of annual leave for every 20 days worked, unused leave carries forward up to 30 days, and all of it is encashed on exit. Your policy can give more, never less. Managers, and supervisors over ₹18,000 a month, follow the contract and the state law.

The change came with the OSH Code on 21 Nov 2025, and 2026 is the first full calendar year under it. For the workers it covers, annual leave now starts after 180 days worked in a year instead of 240 under the Factories Act, at 1 day for every 20 worked, so at least 9 days for someone who just qualifies. Unused leave carries forward up to 30 days and is encashed on exit, and holidays next to leave are not counted as leave. Maternity benefit stays at up to 26 weeks; casual and sick leave are still set by each state's Shops and Establishments law.

It is the old Factories Act test: a factory worker earned annual leave with wages only after working 240 days in the calendar year. Since 21 Nov 2025 the OSH Code has replaced it with 180 days, for workers in establishments with 10 or more workers, factories included, and the leave then accrues at 1 day for every 20 days worked. Someone who joins mid-year qualifies after working a quarter of the days left in that calendar year. If your policy still says 240 days, rewrite it: it now sets a higher bar than the law, and for the workers the Code covers the Code's 180 days apply. Managers, and supervisors over ₹18,000 a month, follow their contract and the state law instead.

Not for the workers the OSH Code covers: holidays falling inside annual leave, or just before or after it, are not counted as leave, so the sandwich rule cannot apply to their earned leave. For managers and anyone else outside the Code, the policy decides, and most small companies apply the sandwich rule, if at all, only to casual leave. Asha's Friday and Monday of casual leave show the difference: 2 days with the rule off, 4 with it on. Whatever you choose, write which leave types the rule covers and let the request show the days that count before it is sent.

There is no national number. Each state's Shops and Establishments law sets its own minimum for casual and sick leave, and some combine the two. In practice, small Indian companies write 6 to 12 casual and 6 to 12 sick days, or one “paid leave” balance of 18 to 24 days when the founder does not want to police which kind a day is. Check your state's minimum first; the number in your policy can be higher, never lower.

It counts weekly offs or holidays that fall between two leave days as leave. Take Friday and Monday off and, with the rule on, Saturday and Sunday count too: four days used instead of two. For annual leave under the OSH Code it cannot apply, because holidays within the leave period, or just before or after it, are not counted as leave. For casual or company leave it is a policy choice within your state's Shops and Establishments law: name the types it covers and write it down before it applies.

Yes. For the workers the OSH Code covers, unused annual leave carries forward up to 30 days, days above that are paid out on the worker's demand at the year end, and all unused annual leave is encashed on exit. Your policy can set a higher cap. Casual leave usually lapses at the year end. Where your state's Shops and Establishments Act gives more, such as a higher carry-forward cap, keep the more generous rule until your lawyer confirms otherwise.

Most state Shops and Establishments laws require some paid sick or casual leave, but not all set them separately, and the number differs by state. Check the Act and rules where the person works; a company with people in two states may need two minimums. Above the minimum, it is your policy.

Publish next year's holiday list by December, then set a team cap: no more than a fixed share of a team off on the same working day, approved in the order requests arrive, with the cap shown on the request. Write it before October, not during it.

If the policy allowed leave beyond the balance, the excess is recovered at F&F: first against any leave being encashed, then as loss of pay in the last salary. Write that into the policy when you allow advance leave, not at the exit.