The leave types to define, how accrual and carry-forward should work, who approves what, and a policy skeleton you can adapt — written for companies of 10 to 100 staff.
In a company of fifteen or thirty people, leave is usually handled by asking. An employee messages a supervisor, the supervisor says yes or no, and nothing is recorded except that message. It works until it does not — and the failures follow a pattern.
Someone resigns and claims eighteen days of accumulated leave; nobody can prove otherwise, so it gets paid. Two employees in the same role find out they were treated differently for the same request, and one of them is now looking for another job. Three technicians take Friday off in the same week because each asked a different supervisor. At month end, payroll has to decide whether an absence was leave or loss of pay, guesses, and the payslip triggers a complaint.
None of this is caused by generosity or by strictness. It is caused by the entitlement, the accrual and the approval path existing only in people's heads. A written leave policy is the cheapest HR document you will ever produce and it removes most of the recurring arguments.
India has no single statute setting one leave entitlement for every employer. What applies to you depends on the type of establishment and the state:
Two implications for a small company. First, if you operate in more than one state, one entitlement table for everyone can quietly fall short of the minimum somewhere — the same problem that makes professional tax state-specific in payroll. Second, your policy sets the floor at the statutory minimum and then whatever you offer above it is your choice, made for retention rather than compliance.
Keep the list short. Four or five categories that people understand beat nine that nobody can tell apart.
The main annual entitlement, accrued through the year based on days worked. This is the leave that usually carries forward and that gets settled at exit, so it is the one that must be tracked as a running balance rather than reset informally each year.
Paid leave for illness. Decide upfront when a medical certificate is required — commonly beyond two or three consecutive days — and say so, because asking for one only when you are suspicious is how a fairness complaint starts.
Short-notice personal leave, usually one or two days at a time, not meant to be clubbed into a long break. If you offer it, define the maximum consecutive days and whether it can be combined with earned leave.
Maternity leave as required by law, and paternity leave if you choose to offer it (it is not a general statutory entitlement in the private sector). Write down the notice expected and how the role is covered, because for a small team the coverage question is the real one.
Essential for service businesses. If a technician works a Sunday or a declared holiday, they get either overtime pay or a comp-off — and the policy must say which, who decides, and by when the comp-off must be used before it lapses. Unwritten comp-off is the most commonly disputed balance in field teams.
Not a benefit, but it needs defining: what happens when someone is absent with no balance, and how it shows on the payslip. It appears as reduced paid days and LOP days, exactly as described in our guide to the salary slip format.
The leave types are the easy part. These are the clauses whose absence causes disputes:
For an office role, approved leave means one desk is empty. For a field or shift team it means the day's capacity dropped and jobs have to move. That is why leave approval in a service business cannot be a purely HR decision made in isolation from the schedule.
The practical arrangement that works: leave requests are visible against the roster before they are approved, so the approver can see that two of four technicians in one zone are already off that day. Approve first and discover the clash on the morning of, and the day is spent apologising to customers. This is the same coverage logic covered in shift scheduling for teams across multiple sites, and it is why leave, attendance and the roster belong in one system rather than in three.
VeloCrew keeps attendance, shifts and leave together, so an approved leave shows up in the roster and in the paid-days figure payroll uses without anyone re-entering it.
Two pages is enough. Use these headings in this order:
Have it read by someone familiar with your state's Act before you circulate it, and date the version.
Write the policy this week, at whatever length you can finish. A short, dated, circulated policy with an honest opening-balance exercise behind it is worth far more than a comprehensive one that never gets issued. Then make sure the leave balance, the roster and the payroll paid-days figure are reading from the same record — that is what stops the policy from drifting back into a set of individual verbal arrangements.
VeloCrew keeps leave, attendance, shifts and payroll in one place so an approved leave reaches the roster and the payslip without a second entry. See the platform overview, and the related guides on running payroll in India and GPS attendance for field teams.
General guidance only, not professional advice. Leave entitlements are set by state legislation and change — confirm the current requirements for your establishment and state with a qualified professional.
There is no single national number. The minimum entitlement for earned or privilege leave and for sick leave comes from the Shops and Establishments Act or Factories Act applicable to your state and type of establishment, and casual leave is largely a matter of company practice. Start from your state's minimum, then decide what you want to offer above it to stay competitive for the staff you hire.
Casual leave is mostly a convention rather than a uniform statutory entitlement, though some state rules do specify it. Earned or privilege leave and sick leave are the categories most commonly prescribed by state legislation. Whatever mix you choose, the total should meet or exceed the statutory minimum applicable to you.
Carry-forward of earned leave up to a cap is common and in many states there is a statutory position on accumulation. Encashment is usually a company decision except at exit, where the settlement of accumulated earned leave is normally expected. Whichever you choose, state the cap and the treatment in the policy — silence is what causes arguments at resignation time.
It becomes loss of pay for those days, which reduces paid days and therefore the salary for that cycle. This must be written into the policy and the deduction must be visible on the payslip as LOP days, not applied as an unexplained lower credit in the bank.
The entitlement should be the same, but the notice and approval process usually needs to be tighter. A field technician's absence removes capacity from a scheduled day, so planned leave should require earlier notice and approval should sit with whoever owns the day's dispatch, not only with HR.
Yes, and arguably more than a large company does, because at that size decisions are being made verbally and inconsistently. A two-page written policy costs an afternoon and removes the two most common disputes: what someone was entitled to, and whether a refusal was fair.
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