Every employee in shops and establishments in Karnataka is entitled for annual leave with wages, calculated at the rate of one day for every twenty days work performed by him. 

In addition to this, every employee shall, during the first twelve months of continuous service and during every subsequent twelve months of such service, also be entitled to leave with wages for a maximum period of twelve days. This leave can be availed on the ground of any sickness incurred or accident sustained by the employee or for any other reasonable cause. 

The annual leave with wages for which an employee is entitled may be carried forward to the next year in case he has not utilized it during a year. However, the total number of leave days carried forward shall not exceed a maximum of thirty days.  

An employee can at any time apply in writing to the manager of the establishment to avail the annual leave. However he shall apply minimum ten days prior the date on which he wishes his leave to begin. However this minimum period of ten days is not applicable in case of medical leaves. 

For the leave allowed to an employee, he shall be paid wages at a rate equal to the daily average of his total full time earnings for the day on which he worked, during the month immediately preceding his leave. The number of times, a leave may be taken by an employee during an year shall not exceed three.