Private companies in India usually treat “leave policy” as an HR document. In practice, it is also a compliance document. Two areas create the most risk – maternity benefits and overtime – because they combine statutory rights, payroll calculations, and penalties if you get them wrong.

A major update matters here: the four Labour Codes were brought into force from 21 November 2025. As a result, maternity benefits now sit under the Code on Social Security, 2020, and working hours/overtime sit under the Occupational Safety, Health and Working Conditions Code, 2020 (OSH Code). Many older central laws were repealed from that date, and the detailed rules are still rolling out through Central/State notifications. Your policy should reflect this shift.

Part 1: Maternity leave policy in India for private companies

1) Who is covered?

As a policy baseline, treat maternity benefit coverage as broad:

• It applies to women working in covered establishments (including private companies), subject to statutory conditions.

• It is not limited to “permanent employees” only. Courts have repeatedly frowned on artificial classification that defeats maternity welfare.

2) Eligibility: the “80 days” rule

A woman typically qualifies if she has worked at least 80 days in the 12 months immediately before the expected delivery date. For this calculation, certain paid holidays/laid-off days can count, depending on the applicable rules.

Policy tip: Define how you count “days worked” and keep attendance/payroll records clean. Disputes often become record-disputes.

3) Duration: 26 weeks (and when it reduces)

A compliant maternity leave policy should state the statutory minimum clearly:

• Up to 26 weeks of paid maternity benefit (for the first two surviving children), with up to 8 weeks before the expected delivery date.

• If a woman has two or more surviving children, the maximum benefit reduces to 12 weeks, with up to 6 weeks before expected delivery.

Important practical point: The law restricts the duration, not the right. A recent Supreme Court ruling clarified that there is no absolute bar on eligibility merely because the employee has more than two children – only the duration changes.

4) Adoption and surrogacy (commissioning mother)

Your policy should also cover:

• Adopting a child below 3 months: 12 weeks from the date the child is handed over.

• Commissioning mother (surrogacy): 12 weeks from the date the child is handed over.

5) Related leaves that employers forget to write down

A good private-company policy should also mention these statutory paid leaves (where applicable):

• Miscarriage / medical termination of pregnancy: 6 weeks paid leave.

• Tubectomy operation: 2 weeks paid leave.

• Illness arising out of pregnancy/delivery, etc.: up to 1 month additional paid leave (subject to proof).

6) Pay during maternity leave

Maternity benefit is typically paid at the woman’s average daily wage (as defined under the law/rules). Many disputes arise because employers:

• exclude regular wage components,

• delay payments, or

• treat maternity benefit like “earned leave encashment”.

Policy tip: Spell out (a) the wage base used, (b) payroll cut-off dates, and (c) the payment timeline.

7) Work-from-home and nursing breaks

Where the work permits, the law allows work-from-home after maternity benefit, based on mutual agreement.

Also, most maternity frameworks provide nursing breaks post-return to work. Your policy should specify:

• how to request nursing breaks,

• how managers must accommodate them, and

• how this affects shift scheduling (without reducing entitlements unlawfully).

8) Crèche facility (childcare)

If you meet the statutory threshold (commonly 50 or more workers), your policy should address:

• whether you provide an in-house crèche or a common/shared facility,

• location/distance, timings, and access,

• the process for enrollment.

9) Job protection and non-retaliation (the “do not terminate” zone)

Your policy must clearly prohibit:

• dismissal/discharge during maternity absence,

• adverse changes to service conditions because the employee took maternity benefit,

• coercion to resign.

This is not just “best practice” – it is a frequent litigation trigger.

Dr. Kavita Yadav v. Secretary, Ministry of Health & Family Welfare 2023

F (Facts): A fixed-term contractual employee applied for maternity benefits, but her contract was due to expire shortly after her maternity leave began. The employer offered benefits only up to the contract end date.
I (Issue): Can maternity benefits continue even if the contract tenure ends during the benefit period?
R (Rule): Once statutory eligibility is met, maternity benefits are a legal entitlement. Statutory maternity protection can operate beyond the contractual end date for the limited purpose of granting benefits.
A (Application): The Court treated the end of contract during maternity period as a form of “discharge” for maternity protection purposes and held the benefits can travel beyond the employment term.
C (Conclusion): The employee was entitled to full maternity benefits even though the benefit period exceeded her contractual tenure.

Why this matters for private companies: If you rely heavily on fixed-term hiring, your maternity policy must avoid “contract expiry = no maternity pay” logic. That position is high-risk.

Overtime policy in India (private companies)

Overtime compliance depends on who the person is (worker vs managerial category), and which legal framework applies to your establishment. After 21 November 2025, overtime is primarily governed by the OSH Code framework (subject to rules and applicability).

1) Baseline working-hour limits

Under the OSH Code approach:

• Workers should not be required/allowed to work more than 8 hours a day, and

• The weekly structure and spread-over/intervals are controlled through rules/notifications.

2) When overtime becomes payable

Your overtime policy in India should clearly state:

• overtime applies when a worker works beyond prescribed daily/weekly hours,

• overtime should be calculated in the manner most favourable to the worker (daily vs weekly computation where relevant),

• overtime must be properly approved and recorded (to prevent “off-the-clock” disputes).

3) Rate of overtime pay: “double”

A safe policy statement is:

• overtime wages are paid at twice the normal wage rate (double rate), as per the statutory framework.

4) Consent and caps

Modern overtime frameworks emphasise that:

• the worker’s consent matters (overtime cannot become disguised forced labour), and

• the government may prescribe overtime caps (many draft/legacy rules use quarterly caps – your HR team should check the latest Central/State rules applicable to your unit).

5) The payroll trap: what counts in “ordinary rate of wages”?

Even before the Labour Codes, courts repeatedly litigated this point. Two practical lessons remain useful for drafting and payroll operations:

• Overtime is computed on the “ordinary rate” concept – typically basic wages plus allowances that the worker is actually entitled to, while excluding bonus and prior overtime.

• Employers get into trouble when they exclude regular allowances from the base, or include “notional” components the employee does not actually receive.

Gujarat Mazdoor Sabha v. State of Gujarat (Supreme Court, 2020)

F: During COVID-19, notifications attempted to extend daily/weekly working hours and dilute overtime protections.
I: Can the state relax protections so that overtime is not paid at the statutory double rate?
R: Overtime pay is a core worker protection; diluting it undermines labour welfare and constitutional protections against exploitation.
A: The Court struck down the notification framework that effectively reduced statutory overtime safeguards.
C: Employers must treat overtime pay obligations as non-negotiable statutory protections, not as a flexible HR cost item.

A practical checklist for compliant policies 

Maternity policy checklist

• Eligibility rule (80 days) + how you count days

• Leave duration matrix (26 weeks / 12 weeks; adoption/commissioning)

• Pay method + payment timelines

• Medical bonus, documentation, and proof requirements

• Work-from-home option (where feasible) with process

• Nursing breaks and return-to-work planning

• Crèche coverage and access rules (if applicable)

• Non-retaliation clause + grievance escalation channel

Overtime policy checklist

• Coverage category (who is eligible for statutory overtime)

• Daily/weekly thresholds and approval workflow

• Rate (double) and base-wage components

• Consent language and overtime caps (as per applicable rules)

• Recording mechanism (biometric/attendance + manager approval)

• Monthly audit process (to catch unpaid/underpaid OT)