Restricted holidays explained

India celebrates more festivals than any holiday calendar can hold. If you declared every festival your employees care about, the office would shut for a month; if you declare only the big national days, someone's most important festival of the year becomes a working day. Restricted holidays are the standard Indian answer to this problem, and they are worth getting right.

What a restricted holiday is

A restricted holiday (RH), sometimes called an optional or floating holiday, is a day from a published list of festivals that an employee may choose to take off, up to a fixed quota per year. The company stays open on that day; only the employees who opted for it are away. The concept comes from central government practice, where employees pick a small number of restricted holidays from a long official list, and private companies have adopted the same pattern.

The key distinction: a public holiday applies to everyone and needs no application. A restricted holiday applies only to the person who applies for it, and it needs approval like leave does.

Why India specifically needs this

A team in Kochi, a team in Patna and a team in Pune do not share a festival calendar. Onam, Chhath and Gudi Padwa each matter enormously in one region and pass unnoticed in another. Add religious diversity within a single office and no fixed list of 10 to 12 public holidays can be fair to everyone. RH lets each person protect the days that matter to them without inflating the company-wide holiday count. It is also quietly good for operations: on any given RH, most of the team is still working.

How many to offer

Common practice:

• Fixed public holidays: 10 to 12 per year, including the three national holidays (26 January, 15 August, 2 October) which are observed everywhere.
• Restricted holidays: 2 or 3 per year, chosen from a published list of roughly 8 to 15 optional days.

Two RH is the most common number in private companies. Three is generous and rarely abused. One is too few to be meaningful in a country with this many festivals.

Build the optional list deliberately. Include the major regional festivals of the states you operate in, festivals of minority communities, and days like Karva Chauth or Ayudha Puja that some employees observe and others do not. Publish the list in December for the following year alongside the fixed holiday calendar.

How approvals should work

RH should flow through the same request and approval channel as leave, not through hallway conversations. A workable flow:

1. Employee picks a day from the published RH list and applies in advance, ideally 7 days before, same as planned leave.
2. The reporting manager approves or declines based on coverage that day, exactly as they would a leave request.
3. The system deducts one unit from the RH quota, separate from EL, CL and SL balances.
4. Unused RH lapses at year end. Do not allow carry-forward or encashment; it defeats the purpose.

Three rules prevent most disputes:

• RH is not automatic. A manager can decline if half the team has applied for the same day, though in practice this is rare because RH days are by nature minority days.
• RH cannot be taken retroactively. It is a planned festival day, not a regularisation tool.
• The list is closed. Employees pick from the published list; they do not nominate arbitrary days. If a day is missing, fix the list next year.

Keep the RH balance visible in the same place as other leave balances so nobody has to email HR to ask. In ZekoHR, restricted holidays sit as a separate leave type with its own quota and the standard approval chain, which keeps the paper trail clean.

Writing it into policy

Two paragraphs are enough: how many RH per year, where the list is published, the notice period, the approval route, and the lapse rule. Put the actual list in the annual holiday calendar, not in the policy document, so you can refresh it yearly without re-issuing policy. If you are drafting from scratch, the leave management features page shows how the pieces fit together, and our knowledge base has calendar-setup walkthroughs.

Restricted holidays cost very little, signal respect for a diverse workforce, and remove an annual round of awkward negotiations. Few HR mechanisms give you that much for two days a year.