Comp Off Rules in India 2026: Law, Expiry and Examples

Comp off, short for compensatory off, is a paid day off that an employee gets in place of a weekly off or a holiday they worked. For workers covered by the Occupational Safety, Health and Working Conditions Code, 2020 (the OSH Code), it is not optional: a weekly holiday lost under an exemption has to be given back, day for day, within the same month or the two months after it. Holiday work is governed by state law, and the states differ: Karnataka lets the employee choose between double wages and a substituted holiday, while Maharashtra requires double wages and a day off.

Most comp off disputes I see come down to one confusion. The company treats comp off as goodwill leave it can attach any condition to, when for a large share of its staff it is a statutory substitute for a rest day the law says they must get. Separate the two and most of the policy follows. In practice that means comp off sits in your leave management software as its own leave type, with its own expiry and its own record of the day that earned it.

This guide is for the HR manager or payroll executive who has to write the comp off policy and defend it. Go to whether comp off is mandatory to see which law covers which employee, to Maharashtra and Karnataka for the state rules, to the worked examples for the numbers, or to the setup checklist if you are rewriting the policy.

Nothing here is legal or tax advice. The four Labour Codes came into force on 21 November 2025 and the Occupational Safety, Health and Working Conditions (Central) Rules, 2026 were notified on 8 May 2026. The Central Rules apply where the Central Government is the appropriate government. Other establishments follow their state's rules under the Code, and each state's Shops and Establishments Act and holiday law continue to apply, so check the notifications for your state before you finalise a policy. Law as at 11 November 2026.

What is comp off in India?

Comp off is a day of paid leave credited to an employee who worked on a day they were entitled to have off. That day is usually the weekly off, a national holiday or a festival holiday. The employee keeps their normal salary for the month and gets the rest day later.

Three terms get mixed up:

• Weekly holiday (weekly off): the rest day that labour law guarantees. Under the OSH Code no worker may work more than six days in a week.
• Compensatory holiday: the OSH Code's term for a rest day given in place of a weekly holiday the worker lost.
• Substituted holiday: the term state holiday laws use for a paid day off given in place of a national or festival holiday the employee worked.

Comp off is not overtime. Overtime is cash for hours beyond the daily or weekly limit. A Sunday shift can earn both, as the first worked example shows. Our compensatory off glossary entry has the short version.

Is comp off mandatory in India?

It depends on which law covers the employee. Work through these four questions in order.

• Is the person a "worker" in an establishment covered by the OSH Code? The Code covers factories, mines, plantations, construction, motor transport and any other place where an industry, trade, business or occupation is carried on with 10 or more workers. A worker is anyone doing manual, unskilled, skilled, technical, operational, clerical or supervisory work, except people employed mainly in a managerial or administrative capacity and supervisors earning more than ₹18,000 a month. Asked whether the working-hour provisions reach white-collar and head office staff, the Ministry of Labour's FAQ compilation answered that they apply to workers as the Code defines them (question 256). For these workers the basic rule is no more than six days' work a week. If the government has exempted the establishment and a worker loses weekly holidays as a result, compensatory holidays are mandatory under section 26(3).
• Is it a shop, office or commercial establishment? Then your state's Shops and Establishments Act applies as well. None of these Acts was repealed by the Labour Codes. Maharashtra's, for example, requires compensatory leave within two months for a weekly holiday that was denied. Where the Code and a state law both apply, the Code overrides anything inconsistent with it, but an employee keeps any benefit that is more favourable to them (section 120). How the two fit together for offices is still being worked out, so meet whichever rule is stricter.
• Did they work a national or festival holiday? Then the state holiday law decides. Karnataka gives the employee a choice between double wages and a substituted paid holiday. Maharashtra gives double wages and a day off.
• Is the person outside all of these? Genuine managers, for example, get comp off only if your policy or their contract offers it, and on the terms the company sets.

Sections 52 and 53 of the Factories Act, 1948, which many HR pages still quote, were repealed when the OSH Code came into force on 21 November 2025 (S.O. 5321(E)). Section 26 of the Code carries the same principle forward, with the same month-plus-two window, so cite the Code now.

What are the comp off rules under the OSH Code?

I checked the Rule 68 wording against the Ministry of Labour's copy of the OSH (Central) Rules, 2026, G.S.R. 345(E) of 8 May 2026. The Central Rules bind establishments where the Central Government is the appropriate government, such as central public sector undertakings, railways, mines and major ports, and the other central-sphere bodies listed in section 2(1)(d). Factories and most private employers fall under their state's rules, so confirm that your state's rule says the same thing before you rely on these details. Our post on attendance compliance under the Labour Codes covers hours and spread-over in more detail.

What are the comp off rules in Maharashtra and Karnataka?

Shops and Establishments Acts and holiday laws are state laws, and the details vary. Maharashtra and Karnataka show the range.

Two points about these provisions:

• In Maharashtra, the weekly off rule has two limbs, compensatory leave within two months and double wages for work on a rest day, and they are triggered by slightly different facts. The text does not settle whether one rest day worked earns both. Until it is settled, giving the day off and paying the double rate is the lower-risk course. Take advice before relying on only one of them.
• In Karnataka, the employee makes the choice, not the employer. A policy that says "holiday work earns comp off only, no pay" does not meet section 5(2). The request form should record which option the employee chose. The Karnataka holiday list has this year's dates.

Does comp off expire?

The law does not set an expiry for comp off that your policy grants on its own terms, so the policy has to. A window of 30, 60 or 90 days from the day worked is easy to run. For statutory comp off, the window must not be shorter than the law's:

• OSH Code workers: the end of the second month after the month in which the weekly holiday fell due. A Sunday worked on 4 October 2026 must be given back by 31 December 2026.
• Maharashtra shops and establishments: two months from the weekly holiday, so by 4 December 2026 for the same Sunday.

A shorter policy window can let a statutory entitlement lapse, which is the employer's problem, not the employee's. The fix is to schedule the day off rather than wait for the employee to ask, and to pay out a credit that lapses because work got in the way.

Can comp off be encashed?

No central law requires policy comp off to be encashed, so your written policy decides. Two rules make sense: pay out unexpired comp off at exit, and pay out a credit that lapsed because the manager refused or postponed the day off. Any payout is salary, and tax is deducted on it with the rest of the pay. Comp off is not earned leave, so take tax advice before you treat any part of it as exempt leave encashment.

For OSH Code workers, encashment is not a substitute for the day itself. Section 26(3) requires compensatory holidays to be allowed, and Rule 68(4) requires them to be given before the worker is discharged or dismissed. Our guide to the full and final settlement covers where a payout sits in the F&F.

Is comp off the same as overtime?

No. Comp off replaces a lost rest day. Overtime is pay at twice the rate of wages for hours beyond the daily or weekly limit, counted daily or weekly, whichever favours the worker (section 27). The Code caps the working day at eight hours (section 25), and the Central Rules use 48 hours for the week. A worked Sunday can earn both: the compensatory holiday for the lost rest day, and overtime if the week goes past 48 hours. Giving the comp off does not cancel the overtime, and paying the overtime does not cancel the comp off. The overtime pay calculation guide covers the wage base and the hourly rate.

How is comp off worked out? Three examples

Example 1: a factory working four Sundays in October

A component plant in Pune has Sunday as its weekly holiday. An export order comes in, and under an exemption the plant runs on all four Sundays in October 2026 (4, 11, 18 and 25 October). Ravi, a machine operator, works all four. His monthly wages, as the Codes define wages, come to ₹22,000. A Pune factory falls under Maharashtra's rules under the Code, so check them; this example applies Central Rules 68 and 69 to show the method.

Compensatory holidays. Ravi has lost four weekly holidays, so he is owed four compensatory holidays. The window is October plus the next two months, so all four must be given by 31 December 2026. The plant has to put up a notice by 31 October listing November's compensatory holidays. At most two can fall in one week, so HR schedules two in the week beginning Sunday, 1 November and two in the week beginning Sunday, 8 November.

Overtime is still due. The Code's week runs from midnight on Saturday, so each of those weeks has the Sunday plus six eight-hour days, Monday to Saturday: 8 + 48 = 56 hours. On a daily count no day goes past eight hours. On a weekly count he worked 8 hours over 48, and section 27 takes whichever count favours the worker. The compensatory holiday in November does not cancel overtime earned in October.

The amounts are worked without rounding the hourly rate first, which is why ₹211.54 × 8 shows as ₹1,692.31 and not ₹1,692.32. The 26-day divisor is the one in Central Rule 69(3) and in our overtime guide. Your state's rules may fix a different method and their own quarterly overtime cap; the Central Rules allow 144 hours a quarter. Ravi's 32 hours in October are well inside that.

Example 2: working Gandhi Jayanti in Bengaluru

Priya is a customer support executive in a Bengaluru office, which the Karnataka holiday Act covers as a commercial establishment. Her monthly wages are ₹36,000. She works on Friday, 2 October 2026 (Gandhi Jayanti) to cover a client go-live. Under section 5(2) she picks one option.

She picks option B and takes Friday, 16 October off. HR records her choice on the request, with the date worked and the substituted date. If she had picked option A, the treatment would need a decision. Section 5(1) already pays every employee for the holiday, and option B is worth one extra paid day, which points to one extra day's wages under option A. The text does not settle it, though, so agree the treatment with your labour adviser, write it into the policy and apply it the same way every time. The Act also does not fix a divisor for monthly-paid staff; dividing by 30, or by the 31 days in October, gives a lower daily wage than 26.

Example 3: expiry and exit

Anil is an area sales manager in a Chennai office. His role is mainly managerial, so he is outside the OSH Code's definition of a worker and his comp off is a policy benefit. The policy says comp off must be used within 60 days of the day worked. He works on Sunday, 4 October 2026, so the last day he can use that credit is 3 December 2026.

Anil resigns with three unexpired comp offs. Two are still there because his manager turned down his requests during the quarter-end rush. The policy pays out unexpired comp off at exit, and Anil's monthly wages are ₹30,000:

• Daily rate: ₹30,000 ÷ 26 = ₹1,153.85
• Encashment: ₹30,000 ÷ 26 × 3 = ₹3,461.54, paid in the full and final settlement and taxed as salary

If Anil had been a worker under the OSH Code who lost weekly holidays under an exemption, the position would be different. Rule 68(4) says compensatory holidays due must be given before a worker is discharged or dismissed, and they cannot be counted as part of the notice period. The rule does not mention resignation. The safe course is to schedule any compensatory holidays before the last working day and, failing that, pay for them in the F&F.

What should a comp off policy say?

Outside the statutes above, the law says little about the following, so your policy should settle each one in writing. The attendance policy guide has a sample clause you can adapt.

What are the common comp off mistakes?

• Quoting the Factories Act. Sections 52 and 53 were repealed on 21 November 2025. Policies and appointment letters should cite the OSH Code and the state Act.
• A 30-day expiry for statutory comp off. The OSH Code window is the month plus two, and Maharashtra's is two months. A 30-day lapse rule can take away a legal right.
• Treating comp off as a replacement for overtime. A worked Sunday can push the week past 48 hours. The comp off covers the lost rest day, and overtime is still due for the extra hours.
• Letting the employer choose on holidays. Where the holiday law gives the employee the choice, as section 5(2) does in Karnataka, a comp-off-only rule falls short.
• Long stretches without a day off. Outside motor transport, where the Code allows up to ten consecutive days, the rule for OSH workers is no more than six days in a week unless an exemption applies. Maharashtra requires 24 consecutive hours of rest every week.
• Unlimited balances. Balances with no expiry turn into a liability that gets claimed at exit. Set a cap and a window.
• Merging comp off into earned leave. Keep a separate leave type so the expiry, the audit trail and the F&F treatment stay clean.

What do employers ask most about comp off?

What are the comp off rules in India?

For workers under the OSH Code, a weekly holiday lost through an exemption must be replaced by the same number of compensatory holidays within that month or the next two (section 26(3)). Shops and offices also follow the state Shops and Establishments Act, and holiday work follows the state's holiday law. For staff outside these laws, such as genuine managers, company policy sets the rules.

What are the compensatory off rules as per the Factories Act?

The Factories Act, 1948 was repealed on 21 November 2025. Its compensatory holiday rule now sits in section 26(3) of the OSH Code, 2020: the same number of holidays, within the month they fell due or the two months after. The Central Rules allow no more than two in a week and require a monthly notice.

What are the compensatory off rules in Karnataka?

For national and festival holidays, the Karnataka Industrial Establishments (National and Festival Holidays) Act, 1963 lets an employee who works on one choose between twice the wages, or wages for the day plus a paid substituted holiday. Weekly off work in shops and offices falls under the Karnataka Shops and Commercial Establishments Act, 1961 and, for establishments with 10 or more workers, the OSH Code.

Is comp off given for working on a public holiday?

It depends on the state law. In Karnataka the employee chooses between twice the wages and a substituted paid holiday. In Maharashtra a worker who works a festival holiday gets double the daily average wages and also a day off. Check your state's Act, because the options differ.

Can an employer refuse comp off?

The employer can fix or move the date for business reasons. For OSH workers, a change to a notified compensatory holiday needs at least three days' notice. It cannot refuse a statutory compensatory holiday or let it lapse inside the legal window. For policy comp off, refusals should be rare and recorded, and a credit that lapses because of a refusal should be paid.

Do managers get comp off?

Not under the OSH Code if they are employed mainly in a managerial or administrative capacity, or are supervisors earning more than ₹18,000 a month. State laws have their own definitions, and Karnataka's holiday Act, for example, covers supervisory staff. Beyond that, it is a policy decision.

Can comp off be adjusted against the notice period?

Not for OSH workers. Rule 68(4) says compensatory holidays are not counted as part of any notice period and must be given before discharge or dismissal. For policy comp off, your written policy decides.

Is comp off given for half a day's work?

The law does not set half-day rules for comp off. Your policy should, for example a half day for four or more hours on a rest day and a full day for a full shift.

How do you set up a compliant comp off policy?

• Map each location to its law. For each site, record whether it is an OSH Code establishment (a factory, or any establishment with 10 or more workers), which Shops and Establishments Act applies, and which state holiday law applies.
• Classify staff. Mark who is a "worker" under the OSH Code and under the state Act. A supervisor earning ₹18,000 or less a month is still a worker under the Code. People employed mainly in a managerial or administrative capacity are not.
• Publish the weekly off and the holiday list. Put up the weekly holiday notice (Rule 67 under the Central Rules) and the state holiday list at the start of the year. Our state holiday lists are a starting point.
• Require pre-approval for rest-day work. Use a request that records the date, hours, reason and approving manager. For holiday work in states like Karnataka, also record whether the employee chose double wages or a substituted holiday.
• Credit comp off from attendance, not from memory. Credit a full or half day from punched hours against the thresholds in your policy.
• Set the expiry window to match the law. For OSH workers, that is the end of the second month after the month the holiday fell due. For Maharashtra shops it is two months. Anything shorter can let a statutory entitlement lapse.
• Schedule, don't just credit. For OSH workers, put up the monthly notice of next month's compensatory holidays and keep to the two-per-week cap. For everyone else, managers should plan the day off with the employee.
• Run overtime separately. Check the daily and weekly hours for every week that includes rest-day work, and pay overtime at twice the rate where it applies.
• Handle exits. Give due compensatory holidays to OSH workers before the last day. For everyone else, pay or forfeit according to your written policy, and show any payout as a separate line in the F&F.
• Review every quarter. If the same team keeps building comp off balances, you have a staffing problem, not a leave problem.

Comp off goes wrong on paper because three things have to line up: the attendance punch, the approval and the leave balance. In Engage, comp off is part of the leave module. HR can credit comp offs to any employee, employees request them from the mobile app, and leave policies and holiday calendars can be set up location by location. The attendance module handles custom shifts and weekly offs and syncs with payroll, which reads the same attendance and leave records, covers the full and final settlement, and keeps an audit trail on every change. Engage is built for organisations with 50 or more employees, and pricing is on the site.

Related reading: overtime pay calculation in India, attendance compliance under the Labour Codes, the attendance policy guide, leave policy requirements under Indian labour laws and the compensatory off glossary entry.

Sources

• Occupational Safety, Health and Working Conditions Code, 2020. Gazette of India, 29 September 2020, as hosted by DGFASLI, Ministry of Labour and Employment. Section 2(1)(d) on the appropriate government; section 2(1)(v) on establishments; section 2(1)(zzk) on the week; section 2(1)(zzl) on workers; sections 26 and 27 on weekly and compensatory holidays and overtime; section 120 on more favourable benefits; section 143 on repeals.
• Notification S.O. 5321(E), 21 November 2025. Ministry of Labour and Employment. Brings the provisions of the OSH Code into force from 21 November 2025.
• Occupational Safety, Health and Working Conditions (Central) Rules, 2026. G.S.R. 345(E), 8 May 2026. Rule 67 on the weekly holiday notice; rule 68 on compensatory holidays; rule 69 on overtime, the 1/26 daily wage and the 144-hour quarterly cap.
• Ministry of Labour and Employment, Compilation of FAQs on Four Labour Codes and Central Rules (as on 25 October 2026). Questions 215 and 229 on the Code and state law; 231 on the quarterly overtime limit; 256 on working-hour provisions for head office staff.
• Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017. English text, Labour Department, Government of Maharashtra. Section 1(3) on application; section 16 on the weekly holiday and compensatory leave; section 18(7) on festival holidays.
• Karnataka Industrial Establishments (National and Festival Holidays) Act, 1963. As hosted by PRS Legislative Research. Section 2 on industrial establishments and employees; section 3 on the ten holidays; section 5 on wages and the employee's option.