Seven leave-policy decisions to make before you configure any software

Most leave-tracking problems in a growing Indian company are not software problems. They are policy questions nobody answered, which the software then answers by default. Settle these seven first and the configuration takes an afternoon.

By the Workdome team · 13 October 2026 · 6 min read

A note on the law before the decisions. Minimum leave entitlements in India are set mostly by your state's Shops and Establishments Act (or the Factories Act, for factories), so earned leave, carry-forward limits and encashment rules differ from state to state. Maternity leave follows the Maternity Benefit Act. Treat everything below as the decisions you make above those minimums, and check the Act for each state you employ people in.

1. Which leave types exist, and which ones use up a balance

Casual, sick and earned leave are the usual three. The decision people skip is which types actually consume a balance and which ones count as absence. Work from home, for example, usually needs approval but should neither reduce a balance nor show the person as absent on the attendance report. Unpaid leave counts as absence but has no balance at all.

In Workdome: each leave type is marked paid or unpaid, balance-consuming or not, and absence or not, independently.

2. How leave accrues

Credit the whole year on 1 January (or 1 April), or accrue it monthly or quarterly? Up-front credit is simpler and friendlier; accrual protects you when someone takes their full year's leave in March and resigns in April.

In Workdome: monthly, quarterly or yearly accrual, per leave type.

3. When a new joiner becomes eligible

Immediately, from a cut-off date in the month they join, after probation, or after a number of years' service (common for extra earned leave)? Write down the answer for each leave type — "after probation" for sick leave is the decision that most often gets made inconsistently.

In Workdome: immediate, joining-date cut-off, after probation, or after N years, per leave type.

4. What happens to unused leave at year end

Three choices: it lapses, it carries forward up to a cap, or it is encashed. Your state's Act may set a minimum carry-forward for earned leave, so check that before choosing "lapse". Encashment has a payroll consequence — decide who approves it and in which month it is paid.

In Workdome: lapse, carry forward up to a cap, or encash. Year-end encashment raises encashment requests for approval; the payout itself is processed in payroll. Leave encashed at exit is calculated in the full-and-final settlement.

5. Half-days, weekends and holidays in the middle of a leave

Can people take half a day? Does a Saturday inside a week's leave count? Most companies say weekends and mandatory holidays are not deducted. Some apply a "sandwich rule", where a holiday between two leave days is counted as leave — decide deliberately, because it is unpopular and must be in writing to be enforceable.

In Workdome: half-days are supported, and weekends and mandatory holidays are not deducted. There is no sandwich rule — if your policy needs one, that is worth raising in a demo.

6. Whose holiday calendar

The three national holidays — Republic Day, Independence Day and Gandhi Jayanti — are paid holidays everywhere, and each state adds its own festival holidays. A company with offices in two states may need two calendars; a company in one state usually needs one calendar plus a short list of optional holidays people choose from.

In Workdome: one company-wide calendar with optional holidays. Separate calendars per location are not supported today.

7. Who approves, and where

The line manager is the obvious answer. The real questions are who approves when the manager is on leave, and whether approval happens somewhere people will actually see it in time.

In Workdome: requests go to the reporting manager, and employees can apply, check their balance, see holidays and see who is on leave from Microsoft Teams, where the manager approves or rejects from a card.

Then configure

With these seven answered, configuration is mechanical: create the leave types, set accrual and eligibility for each, load the holiday calendar, and import opening balances — Workdome imports leave balances and past requests, so nobody starts the year at zero.

This article is general guidance on leave policy, not legal advice. Check the Shops and Establishments Act for each state you employ people in.