How do India working time and leave rules work in 2026?

The rules come from the Occupational Safety, Health and Working Conditions Code 2020, which consolidated and replaced the Factories Act 1948 and several other earlier Acts. The Code came into effect on 21 November 2025.

The daily cap of 9 hours means that even where the weekly total stays within 48 hours, no single day may exceed 9 hours of work. This differs from the UK and EU approach, which averages hours over a reference period.

Who is covered

• Workers in establishments covered by the OSH Code (factories, mines, construction, and certain commercial establishments)
• The IT and technology sector typically operates under state Shops and Establishments Acts, which often allow up to 9 to 10 hours per day but rarely exceed the 48-hour weekly total
• Senior management and certain professional roles may be excluded from the daily cap in practice, depending on the applicable state rules

Overtime

Work beyond 48 hours is permitted as overtime. The OSH Code requires overtime pay at double the ordinary rate. Overtime is capped at 125 hours per quarter under the Code. Spread-over (the total span of a working day including breaks) is capped at 10.5 hours.

The weekly rest day must be provided and cannot be waived by contract. In practice, most Indian employers give Sunday as the weekly rest day, though the specific day may vary by establishment type or shift pattern.

The 30-minute break is unpaid unless the employment contract specifies otherwise. It does not count toward the 9 hours working-hours limit.

The 18 days earned leave entitlement applies to workers covered by the Factories Act 1948 and the OSH Code 2020. An employee earns one day of leave for every 20 days worked. The entitlement accrues across the year and is calculated on the basis of days actually worked.

Leave types in India

Indian employers typically grant three categories of leave beyond public holidays:

• Earned leave (EL) or privilege leave (PL): the 18 days statutory entitlement, accruing against days worked
• Casual leave (CL): typically 7 to 12 days per year at the discretion of the employer; not mandated centrally but commonly required by state Shops Acts
• Sick leave (SL): typically 7 to 14 days per year; also governed by state rules rather than a single central minimum

Carry-over rules

Unused earned leave can be carried forward. The Factories Act 1948 permits a maximum accumulation of 30 days of earned leave before the balance is frozen. Any accrual beyond 30 days lapses unless the employment contract provides for encashment. On resignation or termination, the employer must pay out any accumulated earned leave balance.

State-level variation

State Shops and Establishments Acts often set different leave entitlements for commercial establishments (offices, technology firms, retail). Some states grant more than 18 days earned days. The leave rules that apply to a specific employee depend on the state where they work and the type of establishment.

1. Identify which leave rules apply

   Establish whether the employee falls under the central Factories Act and OSH Code 2020 or a state Shops and Establishments Act. The applicable Act sets the earned leave entitlement and the leave categories the employer must provide.

2. Set up the three leave categories

   Configure earned leave, casual leave, and sick leave in your HR system. Earned leave accrues at one day for every 20 days worked. Casual and sick leave are set by the employer and state rules, typically 7 to 12 days each per year.

3. Track the 30-day carry-over cap

   Unused earned leave can be carried forward, but accumulation is capped at 30 days. Any accrual beyond 30 days lapses unless the employment contract provides for encashment. Monitor balances so employees do not lose entitlement.

4. Book public holidays separately from earned leave

   The central government's gazetted public holidays are separate from earned leave and must not be bundled into a single total. Employees are also entitled to choose from restricted holidays; the number available is set by the employer, typically 2 to 4 per year.

5. Pay out earned leave on exit

   On resignation or termination, pay out any accumulated earned leave balance as cash. Include the leave encashment in the full and final settlement alongside any other amounts due at exit.

Restricted holidays

Beyond the 17 gazetted holidays, employees may choose a number of restricted holidays from a longer list that includes regional and religious observances. The number of restricted holidays an employee may take is set by the employer and typically ranges from 2 to 4 per year. The specific list varies by state.

Holiday pay

Employees who work on a gazetted public holiday are entitled to compensation. The usual arrangement is either a day off in lieu or payment at double the ordinary rate, depending on the employment contract and applicable state rules. There is no single central statute requiring premium pay for all public holiday work.

Maternity leave

Paid maternity leave of 26 weeks applies under the Maternity Benefit Act 1961 as amended in 2017, now consolidated into the Code on Social Security 2020. Key conditions:

• The employee must have worked for the employer for at least 80 days in the 12 months before the expected delivery date
• The 26 weeks applies to the first two children. For a third or subsequent child, the entitlement reduces to 12 weeks
• Up to 8 weeks of the leave may be taken before the expected delivery date
• Employers with 50 or more employees must provide a creche facility within a reasonable distance
• Mothers who adopt a child below 3 months receive 12 weeks of adoption leave
• Commissioning mothers in surrogacy arrangements receive 12 weeks of leave

Who pays maternity benefit

The cost sits with the employer for most workers. For employees covered by the Employees State Insurance Corporation (ESIC), the ESIC fund reimburses the employer. ESIC coverage applies to employees earning below a set wage ceiling in notified areas.

Paternity leave in the private sector

India has no central statute requiring private sector employers to grant paid paternity leave. Government employees receive 15 days of paternity leave under central government rules. Private sector practice varies widely. Some larger employers, particularly in technology and professional services, offer 5 to 15 days of paid paternity leave as a benefit above the statutory floor. There is no legal penalty for not offering it in the private sector.

What competitive employers do

Market leaders in India's technology sector typically enhance family-leave beyond the statutory floor. Paid paternity leave of 5 to 15 days is common at larger firms. Some employers offer equalised parental leave policies to attract and retain talent. Offering paternity leave is increasingly a differentiator in the competitive Indian tech hiring market.

The Employees State Insurance Corporation (ESIC) scheme provides sickness benefit at 70% of average daily wages for up to 91 days per year. The scheme operates under the Employees State Insurance Act 1948, now also governed by Chapter VI of the Code on Social Security 2020.

Who is covered by ESIC

• ESIC applies to employees in notified areas and industries earning below a monthly wage ceiling (currently INR 21,000 per month; the ceiling is subject to periodic government revision)
• Employers with 10 or more employees in a notified area must register with ESIC
• Most technology and professional services workers earn above the ESIC ceiling and are therefore not covered by ESIC sickness benefit

For employees outside ESIC coverage

Employees who earn above the ESIC ceiling have no statutory sick pay entitlement. Sick leave for these workers is governed by the employment contract and, where applicable, the state Shops and Establishments Act. Most employers grant 7 to 14 days of sick leave per year under the contract, paid at the ordinary rate. There is no government-backed sickness benefit for these employees.

Sick leave process

• Employees must notify their employer at the start of an absence
• A medical certificate is typically required from the second or third day of absence, depending on the employer policy
• ESIC claimants must obtain a certificate from an authorised ESIC panel doctor to receive benefit payments
• Occupational sick pay above the ESIC benefit or the contractual sick leave allowance is at the employer's discretion

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Key sources: Employees State Insurance Corporation, Ministry of Labour and Employment, India, and the PRS Legislative Research: Labour Codes overview.