Every country has its own set of leave policies that cater to the welfare of employees. Similarly, India has a well-defined leave policy that covers employees across various sectors, including both private and government organizations. As per the Indian labor laws, employers are required to offer their employees a certain number of leaves, which can be availed as part of earned and casual leave programs. In addition to these, some other leaves are also granted to employees across the country, depending on their job profile, tenure, and the company’s policies.
To know the other types of leaves offered in India, check out: https://www.enspirehr.com/blogs/types-of-leaves-offered-by-companies-in-india/
While the specifics of the leave policies might differ from one state to another, both casual and earned leaves are available across every state in India and depends whether the company falls under The Shops and Establishment Act or The Factories Act. These leaves are designed to cater to different needs and circumstances of employees and play a crucial role in maintaining work-life balance.
Causal Leaves vs Earned Leaves: What’s the Difference?
Casual leaves (CLs) are an important part of an employee’s leave entitlement in India. These leaves are designed to provide employees with the flexibility to take time off work for unforeseen or unavoidable circumstances, such as a family emergency or an unexpected personal event. However, it is important to note that employees cannot use casual leaves for outstation trips or leisure activities. CLs are meant for personal reasons only, and employers are usually careful when granting such leaves to employees.
Employers typically offer up to three CLs in a month, and employees must apply for leave in advance. Employers may reject an abrupt or sudden request for a casual leave, as they need to ensure that the employee’s absence does not hamper the work or cause any inconvenience to the organization. One of the key advantages of casual leaves is that they do not affect an employee’s pay. An employee can take a casual leave without any deduction from their salary. This makes it a convenient option for employees who need to take a short break from work for personal reasons.
Earned Leave (EL) is a type of leave that an employee in India earns for each year of their service. It is also known as privilege leave or paid leave. The number of earned leaves an employee is entitled to depends on their length of service in the organization. As per the Leave Rules of the respective state governments or the central government, employees are entitled to a specific number of earned leaves annually. Typically, the entitlement ranges from 15 to 30 days in a year, depending on the organization’s policies and the employee’s service duration.
Earned leaves are provided to employees for planned vacations, medical needs, and personal work or family commitments. It is mandatory for employers to grant earned leaves to their employees and cannot be forfeited or encashed, except when an employee leaves the organization.
Casual Leaves vs Earned Leaves: A Snapshot
| Basis for Comparison | Casual Leave | Earned Leave |
| Purpose | For unforeseen and emergency personal needs. | For planned and unplanned time off, such as vacation and medical needs etc. |
| Accrual | Not earned but provided annually by the employer. | Accrued annually and added to an employee’s leave balance. |
| Availability | Usually, employers offer up to three casual leaves in a month. Six, if the Company is registered under the Shops and establishment Act | Under the Factories Act, a single earned leave is granted for every 20 working days, i.e., 18 leaves per year. Under the Shops and Establishment Act, five privilege leaves are granted for four months of work, i.e., 15 leaves per year. |
| Carrying Forward | Generally, not allowed. | Usually, employees can carry forward their unused earned leaves to the next year. |
| Encashment | Not eligible for encashment. | Usually, employees can encash their unused earned leaves at the end of the year or on leaving the organization. |
| Usage Restrictions | Can be used only for personal reasons and not for vacations or leisure. | Can be used for vacations, medical needs, or other personal reasons. |
| Usage During Notice Period | Can be availed during the notice period before resigning. | Cannot be availed during the notice period before resigning. |
| Approval Requirements | Employees are required to apply for leave in advance and get approval from the employer. | Employees are required to apply for leave in advance, and the employer needs to approve the same. |
| Payment | No deduction in pay for the casual leaves taken by employees. | Paid leaves, and the employee receives their regular salary during the leave period. |
Also read: https://www.enspirehr.com/blogs/hr-strategies-to-meet-employee-engagement-and-work-life-balance/
Takeaway:
Employers need to follow the rules and regulations related to both types of leaves to ensure a smooth work environment and employee welfare. It is crucial for employees to understand the leave policy of their organization and the rules and regulations related to each type of leave to avoid any confusion or disputes.
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