Compensatory off rules in India for employers
Compensatory off is a paid day off given in place of a holiday the employee worked. Part of it is law: when a worker loses a weekly holiday, the OSH Code requires an equal number of compensatory holidays within a fixed window. The rest, comp off for event work or festival holidays, is company policy. This page separates the two and lists the rules a policy needs.
Last updated 12 September 2026.
When is comp off a legal right?
When a worker loses a weekly holiday. The Occupational Safety, Health and Working Conditions Code, 2020, in force since 21 November 2025, says in section 26(3) that the worker shall be allowed compensatory holidays of equal number, within the month in which the holidays were due or within the two months immediately following.
Three things follow from that wording. Equal number: one lost Sunday is one full comp day. A deadline: roughly ninety days from the lost holiday to the granted one. And "shall be allowed": scheduling the comp day is the employer's job, not something the employee has to chase. The older acts and their weekly holiday sections continue during the transition, per the government's own note, but the code's formula is the clearest one to build a policy on.
Is comp off given for late hours or festival work?
Not by statute. Extra hours on a working day attract overtime wages under the hours rules that apply to your establishment. Money answers extra hours; comp off answers lost holidays. A policy that gives comp off instead of overtime pay where overtime pay is due will fail an inspection.
Everything beyond the weekly holiday case, a launch weekend, a long Saturday, a travel day, is policy territory. The common problem is an unwritten norm that managers apply differently, which makes comp off a steady source of complaints. A written policy needs four lines. Who grants it: the manager, at the time of the extra work, not at resignation. What earns it: a full day worked on a scheduled holiday, with a threshold for what counts as a full day. When it expires: a 60 or 90 day window, which matches the statutory rhythm. What it is worth at exit: nothing, if the policy says comp off lapses, which is the usual design, since the state act encashment duties attach to earned leave.
How should comp off be tracked?
Comp off disputes are record disputes. Was the Sunday worked, was the comp day taken, who approved it. That is attendance data. Atndnz keeps the punch records and the leave register in one place, so the question answers itself. Grant the comp day in the system in the same week as the extra work, with its expiry date attached, and the balance stays clean.
Put the clause in the leave policy with the other types, so nobody is working from memory. The HR policy generator produces the policy document. The other leave types, including leave without pay, are on the types of leave index.
Which comp off design works best?
Three designs are common. First, comp off that never expires. It looks generous, but balances of 20 and 30 days build up, managers stop approving holiday work because of the liability, and at exit employees argue the balance is money. In effect you have created a second earned leave with worse records.
Second, a strict 30 day expiry. Clean, but in a busy quarter the comp day becomes impossible to take and the expiry reads as a penalty for helping. If you use short windows, let the manager extend once in writing.
Third, credit at approval: no comp day exists unless the manager granted it in the system in the same week as the extra work. This design holds up at audits and exits, because the register and people's memories never separate. Its one weakness is managers who forget to log the grant, which training fixes.
Whichever you pick, publish the answers to the three questions people ask: what earns a comp day, how long it lasts, and what happens to it at exit.
Common questions
Is compensatory off a legal requirement in India?
For lost weekly holidays, yes. The OSH Code requires compensatory holidays of equal number within the month they were due or the two months following. For extra work that does not consume a weekly holiday, comp off is a matter of company policy, and overtime wages are the statutory route for extra hours.
Within how many days should comp off be availed?
The statutory window for a lost weekly holiday is the month it was due plus the next two months. For policy comp off, companies commonly set 30, 60 or 90 day expiry windows. Shorter windows keep balances small; pick one and apply it evenly.
Can comp off be encashed?
The state act encashment obligations cover earned leave, not comp off. Most policies let comp off lapse if unused. If your policy is silent, expect employees to ask for encashment at exit, which is a good reason not to be silent.
Is comp off given for working late on a normal day?
Not by statute. Extra hours on a working day attract overtime wages under the hours rules that apply to your establishment. Some companies still grant comp off for very long days as policy, which is lawful as an addition but not as a replacement for overtime pay that is due.
Does comp off apply to managers?
The statutory provisions protect workers as the acts define them, and several acts exclude managerial and supervisory staff. Most companies extend comp off to everyone through policy anyway, since the fairness argument is the same at every level.
Write the comp off rules down
Put the comp off window in a generated policy and track the holidays worked in Atndnz attendance. 50 free credits on Offrd signup, no card.