Sandwich Leave Policy in India: Is It Legal, and How to Write a Fair One

Last Updated on October 22, 2026 by Abhijit Divekar

Sandwich leave is a leave rule where a weekly off or public holiday that falls between two days of leave is also counted as leave. Take Friday and Monday off under a sandwich rule and you lose four days of leave, not two. Since India’s Labour Codes came into force on 21 November 2025, that rule is no longer a free choice for many employers.

What is a sandwich leave policy?

A sandwich leave policy counts the non-working days that sit between two leave days as leave too. The holiday is “sandwiched” between the leave. Companies use it to stop long weekends; employees see it as losing days they were never meant to work.

Worked example: counting leave without the sandwich rule

Priya works in a 25-person firm in Pune and is a “worker” under the OSH Code. Her weekly off is Sunday, and Saturday is a working day. She applies for leave from Thursday to the following Tuesday.

Total leave deducted: 5 days, not 6. Under a sandwich rule her employer would have deducted 6.

What does the OSH Code say about holidays during leave?

Section 32 of the OSH Code covers annual leave with wages. Clause (iv) of section 32(1) reads: “any holidays falling between the leave availed by such worker (in a calendar year or prefixed or suffixed holiday) shall be excluded from the period of leave so availed”.

The same section sets the other basic leave rules for workers:

• Eligibility: a worker who has worked 180 days or more in a calendar year is entitled to annual leave with wages.
• Rate: one day of leave for every 20 days worked (one for every 15 days for adolescent workers).
• Holidays: holidays between, before or after leave are not counted as leave.
• Carry forward: up to 30 days of unused leave can be carried into the next year; leave the employer refused can be carried forward without that limit.
• Encashment: a worker can ask to encash leave at the end of the calendar year, and leave above the 30-day carry-forward limit can be encashed.

For the wider picture, see our Labour Codes guide for small businesses.

Who does the OSH Code leave rule cover?

The OSH Code applies to an establishment where 10 or more workers are employed. It defines a worker as anyone employed for manual, unskilled, skilled, technical, operational, clerical or supervisory work. Two groups are left out:

• people employed mainly in a managerial or administrative capacity, and
• people in a supervisory role drawing wages of more than ₹18,000 a month (or a higher amount the Central Government notifies).

In practice, office assistants, accounts executives, technicians and sales staff are usually workers. Managers and well-paid supervisors usually are not.

Can managers still be put on a sandwich rule?

For employees outside the Code’s definition of worker, there is no central rule on sandwich leave. Their leave is governed by your state’s Shops and Establishments Act, which differs from state to state, and by the leave policy and appointment letter. Even where it is allowed, a rule that eats into weekly offs is hard to defend if an employee complains to the labour department, and running two leave rules for different staff makes payroll harder. Check your state’s Act with your HR or legal adviser before applying it to anyone.

Sandwich leave vs loss of pay: what is the difference?

Sandwich leave is about approved leave: whether a holiday next to leave is counted as leave. Loss of pay (LOP) is about absence without approval or without a leave balance: those days are unpaid. The two are often mixed up. A holiday next to approved leave should stay a paid holiday for workers the OSH Code covers. Treating a holiday as unpaid because the employee was absent without approval on both sides is a separate question that depends on your state’s rules and your policy, so take advice before you write it in.

Why most small businesses should drop the sandwich rule

• Compliance: for staff covered by the OSH Code, counting holidays as leave goes against section 32(1)(iv).
• Full and final settlement: leave wrongly deducted reduces leave encashment at exit, a common source of disputes.
• Morale: employees see it as losing weekends.
• Admin: one rule for everyone is simpler to run in attendance and payroll.

If the real worry is long weekends, use fairer tools: a notice period for leave next to holidays, approval rules for back-to-back leave, or limits on leave during peak days. See the types of leave every Indian employer should offer.

Leave policy checklist for the Labour Codes

• Do not count weekly offs or holidays inside or next to annual leave as leave.
• Allow annual leave once a worker has worked 180 days in the calendar year.
• Credit one day of leave for every 20 days worked.
• Let up to 30 days of unused leave carry forward; leave you refused carries forward in full.
• Let workers encash leave at the end of the calendar year, and encash leave above the 30-day limit.
• Update the leave settings in your HRMS so holidays are excluded automatically.
• Put the rule in writing in the leave policy and appointment letters, and tell your team.

How should you write the leave clause?

Here is a simple clause you can put in your leave policy and appointment letters:

Weekly offs and declared holidays that fall within a period of approved leave, or immediately before or after it, are not counted as leave. Leave requests for days adjoining a weekly off or holiday must be applied for at least [3] working days in advance and are subject to manager approval.

Change the notice period to suit your team, and make sure your HRMS counts leave the same way.

How do you switch off the sandwich rule in your HRMS?

Most HRMS tools have a setting on each leave type, often called “count holidays and weekly offs as leave” or “sandwich rule”. Turn it off for every leave type used by workers the OSH Code covers. Then run a quick test: apply leave for a Friday and the following Monday, and check the system deducts two days, not four.

Frequently asked questions

What is the sandwich rule in leave?

It is a policy that counts weekly offs or holidays falling between two leave days as leave. Leave on Friday and Monday becomes four days instead of two.

Is sandwich leave allowed under the new Labour Codes?

Not for workers covered by the OSH Code in establishments with 10 or more workers. Section 32(1)(iv) excludes holidays between, before or after leave from the leave taken.

Does the sandwich rule apply to managers?

The OSH Code’s leave rule covers workers, which excludes managerial and administrative staff and supervisors earning more than ₹18,000 a month. Their leave depends on the state Shops and Establishments Act and the employment contract.

Can a holiday be unpaid if an employee is absent without approval on both sides?

Some companies treat the holiday as unpaid when an employee is absent without approval before and after it. Rules on this differ by state, so take advice before adding it to your policy.

How many days of annual leave does a worker get under the OSH Code?

One day for every 20 days worked, once the worker has worked 180 days or more in the calendar year.

Does the sandwich rule apply to casual or sick leave?

Section 32 of the OSH Code deals with annual leave with wages. Casual and sick leave usually come from your state’s Shops and Establishments Act, standing orders or company policy, so check those rules for each leave type. The simplest approach is to treat holidays the same way for every leave type.

What should I do if leave was wrongly deducted in the past?

Correct the leave balances going forward and credit back the days that were wrongly deducted, especially before any full and final settlement, so leave encashment is paid correctly.

Sources: Occupational Safety, Health and Working Conditions Code, 2020, section 2 (definitions of establishment and worker) and section 32 (annual leave with wages); Labour Codes in force from 21 November 2025. This article is general information, not legal advice. Last reviewed 15 October 2026.