- The OSH Code, 2020 sets annual leave but no separate sick leave entitlement.
- Maharashtra’s Shops and Establishments Act, 2017 has no separate sick leave provision.
- ESI sickness benefit is 70% of average daily wages, for up to 91 days in two consecutive benefit periods.
- ESI doesn’t pay for the first two days of a spell of sickness, the “waiting period”.
On this page
Who decides sick leave rules in India?
Three sources. State law, your contract, then ESI.
Some states write sick leave into their Shops and Establishments Act. Others don’t. Maharashtra is one of them: section 18 of its Act covers weekly offs, casual leave, earned leave and festival holidays, and nothing labelled sick or medical leave. So for a Pune office, the sick leave number comes from your policy.
Hence the policy matters. Once written into an appointment letter, sick leave is a contractual right. Set the count, the medical certificate rule and whether unused days carry forward.
Many Indian employers simply let staff use casual leave or earned leave for illness. That works, but it pushes sick employees to burn holiday.
How does ESI sickness benefit work?
ESIC pays the employee directly, so you don’t fund it beyond your monthly contribution.
An employee earning up to ₹21,000 a month, insured under ESI, qualifies if contributions were paid for at least 78 days in the matching contribution period. The ESIC sickness benefit page sets out the rate and limits.
Suppose a Pune support executive’s average daily wage is ₹700 and a medically certified illness keeps him off work for 8 days.
| Step | Figure |
|---|---|
| Daily benefit (70% of ₹700) | ₹490 |
| Days payable (8 minus the 2-day waiting period) | 6 |
| ESI sickness benefit | ₹2,940 |
Don’t pay twice by accident. If your policy promises full salary during sickness, many employers pay only the top-up between the ESI benefit and full pay, and say so in writing. Absences without any leave balance or benefit become loss of pay.
What do foreign employers get wrong about medical leave?
They copy a home-country sick policy without checking each state. Or they offer nothing.
A UK-style “self-certify for seven days” rule is fine in India, but write it down. Also decide what happens to long illness after the paid days run out. Our article on simplifying leave policies shows a clean structure.
How does Remunance handle sick leave for your team?
Remunance applies the right state rules for every employee, writes your sick leave policy into the employment contract and files ESIC for those under the ceiling. We have onboarded 1,200+ employees for clients across 34 Indian cities, so a team spread across states gets one consistent policy that still meets each local minimum. To set a sick leave policy that works across Indian states, book a call with our leave administration team.
What else do people ask about sick leave rules in India?
How many sick leaves are allowed in India per year?
There’s no national number. It depends on the state law and your policy. Maharashtra’s Act sets none, so your policy decides.
Is a medical certificate required for sick leave?
Only if your policy asks for one. For ESI sickness benefit, the illness must be certified by an ESI doctor.
Can unused sick leave be encashed in India?
Usually not. It’s encashable only if your policy says so, unlike earned leave.
Planning a hire in India?
Our founding team has run payroll and hiring in India for 22+ years, first as Remunance Systems, which was later acquired by ADP.