Transitioning to a 5-Day Workweek: How Many Paid Leaves Should We Offer?

Hi All, Ours is a private limited company. Until last year, we were working six days a week with the 2nd and 4th Saturday off and used to provide 18 paid leaves in a year, which equals 1.5 leaves per month.

Starting this year, we are planning to transition to a five-day working format. Could you please advise on the appropriate number of paid leaves that should be allowed in this case?

Thanks,
Pallavi

Understanding Leave Requirements for Commercial Establishments

What is the nature of your business? If you are a commercial establishment, you need to provide 21 days of annual leave (paid leave) during a calendar year as per the Bombay Shops and Establishments Act. The Act does not permit any relaxation for five-day working establishments. You may accordingly make necessary adjustments like giving off on the 1st Saturday and last Saturday, etc., if you feel the employees may combine leave with weekly offs and have prolonged holidays.

Regards,
B. Saikumar
HR & Labor Law Advisor
Mumbai

Thank you, Sai. Ours is a media company. We specialize in creating 3D animations and walkthroughs. Our CA has informed us that we are required to offer one paid leave for every 21 working days. I am still uncertain about the specifics of our leave policy. Can you provide some clarification on this matter?

Thank you,

Pallavi

Compliance with the Bombay Shops and Establishments Act

You are covered by the Bombay Shops and Establishments Act, assuming that the activity of making 3D animations is commercial but not manufacturing in nature. The Bombay Shops Act requires an employer to grant 21 days of paid leave (annual leave or privilege leave) to employees in a calendar year. That equates to one day of leave for every 17.5 days, roughly. If you provide paid leave at the rate of one day for every 21 days, then the total leave amounts to only 17.5 days during a calendar year, which is less than that provided under the Bombay Shops Act and hence not in accordance with the Bombay Shops Act.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai