New labour laws mandate payment for excess unused leave

The upcoming labour laws will cap paid leave accumulation at 30 days per calendar year. Unused leave days will require compensation from the employer


A set of four labour laws poised for implementation will usher in significant changes across various employment sectors. Once these laws come into effect, a notable regulation stipulates that employees cannot accumulate more than 30 days of paid leave within a single calendar year. If an employee’s accrued leave days surpass this limit, it becomes the responsibility of the employer or company to compensate for the excess leave days.

In this context, the ‘Occupational Safety, Health and Working Conditions Code,’ one of the four labour laws, defines ’employee’ as an individual without a managerial or supervisory position.

The four labour laws in question—the Ooccupational Safety, Health, and Working Conditions Code; the Code on Wages; the Industrial Relations Code; and the Social Security Code—have already received parliamentary approval and government notification. Their official commencement date is yet to be announced.

Section 32(vii) f the 2020 Occupational Safety, Health (OSH) and Working Conditions Code permits employees to carry forward their yearly leave into the following calendar year, up to a maximum of 30 days. If, at the end of the calendar year, the balance of annual leave exceeds 30 days, the said employee has the right to encash the surplus leave and carry forward a maximum of 30 days into the next calendar year. 

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