What is casual leave?

Indian leave policies normally have three buckets. Casual leave covers short, unforeseen absences. Earned leave (also called privilege leave or annual leave) builds up with days worked and is meant for planned holidays. Sick leave covers illness. Some employers merge casual and sick leave into one “sick and casual” allowance, and many add optional or restricted holidays on top.

There is no single national casual leave quota for private employers. The amount usually comes from the state’s shops and establishments law and the employer’s own policy. The central government’s Model Shops and Establishments Bill, 2016, which states could use as a template, provides eight days’ casual leave with wages in every calendar year, credited quarterly, alongside earned leave at one day for every 20 days worked. Each state’s enacted law can differ, so check the act for the state where the employee works.

Earned leave is where national law now sets a floor. Under the Occupational Safety, Health and Working Conditions Code 2020, in force since 21 November 2025, a worker who has worked 180 days or more in a calendar year earns one day of paid leave for every 20 days worked. That is separate from casual leave and should be shown separately on payslips and in the leave policy.

A practical casual leave policy states the number of days a year, whether they are credited at the start of the year or quarterly, the maximum taken at once, whether casual leave can be combined with earned leave, how to apply (and when after-the-event approval is acceptable) and that unused days lapse at year end if that is your rule. The term is rarely used in the UK, US or Australia, where the same need is usually met by personal days or annual leave. This is general information, not legal advice.

Also called: CL, personal leave, casual leave policy.