Holidays

They come from different sources and behave differently, and conflating them is where holiday policies go wrong.

National holidays are the small fixed set that every establishment must grant, typically covering Republic Day, Independence Day and Gandhi Jayanti, with some states adding one or more. The employer has no discretion over them.

Festival holidays are chosen. The state notifies a list, prescribes how many must be granted, and the employer selects. That is why two companies in the same city can have different holiday calendars and both be compliant.

Weekly rest is neither. It is a day of rest in each week, with provisions about substitution where an employee is required to work on their rest day. It is a working conditions requirement rather than a holiday entitlement.

Confirm the national holidays, the number of festival holidays and the notified list for each state before publishing a calendar. All three are state-specific and revised.

An employer with offices in several states cannot publish one holiday list and be compliant everywhere. The mandatory days differ, the festival list differs, and the number to be granted differs.

Three approaches, only two of which are defensible.

• A list per state or per location. Accurate, and the standard answer for anyone with a real multi-state presence.
• A common list set at the most generous applicable standard, plus the mandatory days for each state added locally. Simpler to communicate, costs a little more, and does not fall below any floor.
• One national list at an average. Non-compliant somewhere, usually without anyone knowing which state until an employee raises it.

The practical complication is that employees compare. A team in one city with fourteen holidays and another with eleven will notice, and the explanation that it is statutory is true but rarely satisfying. That is an argument for the second approach in organisations where the teams work closely together.

Someone has to work on some holidays: support desks, plants running continuous processes, retail, security. The question is what they get for it.

The entitlement comes from statute rather than from policy. Working on a national or festival holiday generally attracts either compensatory time off or payment at a premium rate, and where an employee is required to work on their weekly rest day the substitution rules apply, including limits on how many consecutive days may be worked without a rest day.

Two things employers get wrong here.

• Treating holiday working as ordinary overtime. The bases are different, and the statutory entitlement for a holiday may exceed what the overtime rate would produce.
• Offering compensatory off with no expiry discipline, so the balance accumulates and is neither taken nor paid. A compensatory day granted and never used is an unpaid entitlement, and at exit it becomes a claim.

Verify the premium rate, the compensatory off entitlement and the substitution and consecutive-days rules against the applicable Code and state enactment. This entry states none of them: the Code's rest, hours and overtime provisions have not been checked against the enacted text, and no state holidays enactment has been read for it. The list of national holidays given above is the common pattern, not a statutory citation, and the number of festival holidays is set by each state.

Many employers publish a list of optional holidays from which each employee may choose a small number. This is a policy device, and it is a good one: India's festivals are not observed uniformly, and a fixed list inevitably grants days that some employees do not observe while missing ones they do.

Three rules keep it clean.

• Optional holidays sit on top of the statutory minimum, not inside it. Using them to make up the prescribed number of festival holidays defeats the entitlement, because an employee who does not select a day has lost it.
• The selection should be made in advance and recorded, so attendance and payroll treat the day correctly.
• Unselected optional holidays lapse, and the policy should say so plainly rather than leaving employees to assume they accumulate.

The reason to bother is retention rather than compliance. An employee who can take the day their family actually observes, rather than a day chosen for them, notices.

• One national calendar applied everywhere, falling below the prescribed number of festival holidays in at least one state.
• Mandatory national holidays treated as selectable, or converted into optional holidays.
• A holiday falling on a weekly off, with no policy on whether it is substituted, which employees experience as losing a day.
• Holiday working paid as ordinary overtime rather than on the statutory basis.
• Compensatory off granted without expiry, accumulating into a liability that surfaces at exit.
• The calendar published late, after employees have made plans.
• Contract workers at the premises excluded from the holiday list, when the principal employer's obligations do not stop at its own payroll.