What is Leave Encashment?
Leave encashment is payment in cash for unused paid leave. Under section 32 of the OSH Code, a worker can ask to encash leave at the end of the calendar year, can encash leave above 30 days carried forward, and is paid wages in lieu of accrued leave when they leave employment.
Example
A worker resigns with 12 days of earned leave. Wages in lieu are payable before the end of the second working day after quitting and form part of full and final settlement.
Related
See leave rules under the OSH Code and F&F settlement.
Related terms and guides
Sources
- The Occupational Safety, Health and Working Conditions Code, 2020, https://www.labour.gov.in/static/uploads/2025/07/36fcfa5d8e6b9145e282bf7b950d6c47.pdf, live official page, linked for readers; link checked 2026-10-31
- Ministry of Labour and Employment, Additional FAQs on Labour Codes (as on 16 Mar 2026), https://www.labour.gov.in/static/uploads/2026/03/a4ccf4c6d97c4f1f36a6d83f8c64213d.pdf, live official page, linked for readers; link checked 2026-10-31
This is general information, not legal, tax or immigration advice. Rules change and your situation may differ. Consult a licensed attorney or qualified adviser.