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Monday, May 25, 2026

New labour laws mandate companies to compensate for over 30 unused leaves - Business Today

In a significant move to acknowledge work-life balance, the government’s new labour laws will have a few changes that will benefit employees in more than one way. One of the laws will mandate companies to compensate employees who have not claimed more than 30 days of leave.

The Occupational Safety, Health and Working Conditions Code, 2020 defines an "employee" as a person who is employed to do any work, skilled or unskilled, manual or clerical, in or in connection with the business of an establishment, whether the terms of employment be express or implied.

The code also clarifies that "managerial or supervisory" employees are not covered by the definition of "employee". Managerial employees are those who are responsible for the overall management of the establishment, while supervisory employees are those who are responsible for supervising the work of other employees.

The four labour laws — Occupational Safety, Health and Working Conditions Code; Code on Wages; Industrial Relations Code; and Social Security Code — have been passed by Parliament and notified by the government. However, they have not yet come into force. The effective date of the laws has not yet been announced. The codes or laws are one of the most major economic changes implemented by the Modi government.

“Section 32 of the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code), has a number of conditions with respect to availing annual leave, carry forward and encashment. Section...



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