Official holidays for your employees in India: this is what you need to know

The number of public holidays that employees are entitled to in India is not as clearly defined as in Europe or the US. When is your Indian staff entitled to a day off? Our expert Nirali Varma shares tips on how to organize your calendar.

Official holidays in India

In India, the number of paid days off that an employee can take is divided into 3 categories:

• Earned leave – an average of 12 days per year
• Casual leave – an average of 7 days per year
• Sick leave – an average of 12-14 days per year
  The minimum number of days off that a company in India is required to offer its employees depends on the state in which the company is located. Above we mention the averages per leave category, but this minimum differs per Indian state and you can therefore not simply copy HR policy from other countries or even other Indian states. You should always check whether your policy complies with local regulations. Help from local experts is not an unnecessary luxury.

Earned leave

“Earned leave is, as the name suggests, a form of leave that is earned by employees. On average, an employee gets 1 day of leave per month that he or she works for your company,” Nirali explains. “The conditions for taking these days of leave differ from company to company, but normally this must be indicated 15 days in advance. Earned days of leave can be offset if they are not taken. It depends on the employer whether the offset of the outstanding earned days of leave takes place at the end of each year or at the end of the employment contract. In the latter case, the unused days of leave can be carried over to the following year – the maximum transferable days is 30 – but it is not mandatory for employers to offer this possibility.”

Unplanned leave

Unplanned leave is days that can be taken by the employee just before the leave or on the day itself. “This concerns unexpected circumstances that result in the employee not being able to come to the office, such as a sick child who is suddenly at home or, a very Indian problem, extreme weather and therefore enormous traffic jams,” says Nirali. “Most employers do choose to limit the number of unplanned days of leave that can be taken in succession, in many cases someone can take a maximum of 2 or 3 days of unplanned leave in a row.”

Sick leave

Sick leave can be taken for 1 or 2 days in a row, if an employee is sick for longer, he or she must be able to provide a doctor’s certificate.

Step-by-step plan to organize official holidays in India

India has 3 national holidays on which all companies are required to close:

• Republic Day – January 26
• Independence Day – August 15
• Gandhi Jayanti – October 2
  In addition to these three mandatory days off, dozens of other holidays are celebrated in India. When determining the number of official holidays that your employees are given off, it is important that you check whether you are compliant with local regulations. All Indian states have established basic rules on this. In general, a minimum of between 8 and 14 official public holidays are given, depending on the state. This includes the three national holidays mentioned above and also gives employers and employees the freedom to choose the other holidays themselves.

“In India, dozens of religious and regional holidays are celebrated, which are often determined by the lunar calendar,” says Nirali. “This means that holidays fall on a different day every year, so you have to be flexible with your planning. In addition, employers in India often have to deal with a diverse workforce that practices different religions and therefore wants to take time off at different times. Organizing this can feel like a challenge, but there are smart ways to tackle it.”

With this step-by-step plan, you can ensure that you organize the public holidays as inclusively and efficiently as possible:

1. Legal guidelines

The number of official holidays that you need to give off depends largely on your location. That is why it is important to be aware of the holidays that your state government gives off. Every year, around October/November, the Indian states publish their list in the local or national newspapers. The number of holidays that companies must give off are also announced. This number varies from 8 to 14 days per year, depending on your location. If you operate in multiple states, the number of days off between your locations may vary.

2. What are other businesses doing in your area?

In addition to being aware of local regulations regarding holidays, India has regional holidays and, due to the use of the lunar calendar, national holidays fall on different dates in different locations. It is therefore wise to check which holidays businesses in your area have taken leave of in the past few years. This will give you a good benchmark of the most important holidays in your state.

3. Demographics of your employees and customers

Since the holidays are important times for employees to celebrate and get together with their families, the demographics of your employees are important in determining the days you give off. Map this out and don’t forget to look at your clientele. If you have a lot of international clients, they will probably want a clear overview of the days that the office is closed or some of the staff is absent. This can make it harder for you to offer flexibility to your employees. If you have a lot of Indian clients, both in and outside your state, you will also need to consider the holidays that are relevant to them.

4. Choose a flexible or fixed approach

You can approach holiday release in two ways, with a flexible or fixed list. If you choose a flexible approach, you give your employees the opportunity to take holidays that are important to them. For example:

Your company is required by the guidelines to offer 10 holidays off and you have a very diverse workforce. You therefore choose to give the entire office the 4 biggest and most important holidays in India (although this of course depends on the demographics of your staff), these are Diwali, Eid, Christmas and Vaisakhi (an important holiday in both Sikhism and Hinduism), and the 3 national holidays. For the other 3 days, your employees can choose when they would prefer to have the day off by submitting these days to you. These are called special holidays, because not every employee, but only a specific group will have the day off. This approach is becoming increasingly popular in India, because it is the most inclusive. However, for companies with a large workforce or international clients, this can be difficult to implement. In that case, you can also choose to compile a list of official days off yourself based on regional rules and preferences and share it with your employees and clients.

“If you’re wondering which holidays to include in your policy, it’s good to know that Indians are comfortable taking an unplanned or earned day off for a holiday that’s important to them,” says Nirali. “I’m not talking about a major festival like Diwali, where you won’t be able to get an Indian to work, but rather about less celebrated days. Furthermore, in India, it’s not customary to get double pay if an employee has to work on a holiday; instead, this is compensated by offering additional days off at a later date when needed, known as compensatory leave. These days are similar to earned leave and can be used or offset.”

The Guide for Employers in India

Finding, hiring and retaining employees in India, whether remotely or as part of your entity, comes with a lot to consider. You’ll face new recruitment challenges, different contract rules and differences in work culture. To make things a little more clear for you as a European employer, IndiaConnected has created a special guide with advice for every challenge you may encounter (see here).