India: Amendments to Labour Law Framework
On 21 November 2025, the Government of India implemented four consolidated Labour Codes: the Code on Wages (2019), the Industrial Relations Code (2020), the Code on Social Security (2020), and the Occupational Safety, Health and Working Conditions (OSHWC) Code (2020). These Codes replace 29 existing Central labour laws with a unified statutory framework governing wage, social security, working conditions, and industrial relations. These Labour Codes aim to modernise India’s labour framework, reduce statutory fragmentation, and align legal definitions and obligations with contemporary workforce structures.
The full operational rollout of the Labour Codes will proceed in a phased manner due to labour being a subject under the Concurrent List of the Indian Constitution. Hence each State Government will independently develop and issue its own rules and procedural frameworks in alignment with the central legislation.
Until individual state-level rules are formally notified, the existing provisions under prior state labour laws and regulations will remain in effect. As a result, there is a transitional period where older state rules coexist alongside the newly introduced central Codes, creating a temporary dual-compliance environment for employers operating across multiple jurisdictions.
Key Substantive Changes:
This section focuses on the major legal changes compared to the previous framework, particularly those affecting time tracking, payroll accuracy, and workforce classification.
Working Hours & Overtime
Previously, multiple acts applied simultaneously to various employers (Factories Act, Shops & Establishments Acts) with varying daily limits of working time (often 9 hours/day).
Effective 21 November 2025, the OSHWC Code standardises working hours across establishments. The new framework permits 8 to 12 working hours per day, subject to an overall cap of 48 hours per week.
Overtime: Any work beyond the prescribed working hours is considered as overtime work. Overtime must be compensated at not less than double the employee’s regular rate of pay and may only be assigned with the explicit consent of the employee.
What remains unchanged is the 48-hour weekly limit and the continued requirement to provide employees with statutory weekly rest, which are consistent with the earlier regime.
Karnataka
Current Law : Karnataka Shops and Commercial Establishments Act, 1961 and Karnataka Shops and Commercial Establishments Rules, 1963
Working Hours: An employee’s daily working hours shall not exceed more than 9 hours per day and 48 hours per week.
Overtime: Any work performed beyond 9 hours per day and 48 hours a week is considered as overtime. An employee working hour including overtime shall not exceed 10 hours per day. Hence, a maximum of 1 hours of overtime can be performed in a day.
Total number of overtime hours shall not exceed 50 hours in a period of 3 consecutive months.
Pay : Employee is entitled to receive at least double their regular rate of pay for overtime work.
Breaks and spread over: Employees shall not be allowed to work for more than 5 hours without an unpaid break period of at least 1 hour.
The spread-over of working hours in a day, inclusive of breaks, must not exceed 12 hours, as mandated under the Karnataka Shops and Commercial Establishments Act, 1961.
Proposed Amendments
The Karnataka Labour Department has issued draft amendments to the Karnataka Shops and Commercial Establishments Act, 1961, proposing revisions to working hours and overtime regulations. These amendments are only at the draft stage and have not yet been enacted or officially notified.
Reference: Proposed alignment with the Occupational Safety, Health and Working Conditions Code, 2020 and forthcoming state rules.
Working Hours (Proposed): Employees daily working-hour limit would be increased to 10 hours a day, while the weekly limit would remain fixed at 48 hours a week.
Overtime (Proposed): The daily working time including overtime work would increase from 10 hours to 12 hours a day.
The quarterly overtime ceiling is proposed to increase to approximately 144 hours, while the overtime pay rate would continue to be payable at twice the employee’s regular rate of pay for overtime work.
Breaks / Spread over (Proposed): Employees would be entitled to a rest break after 6 continuous hours of work.
Haryana
Current Law : The Haryana Shops and Commercial Establishments (Amendment) Ordinance, 2025
Effective Date: November 12, 2025 (promulgated under Article 213 of the Constitution of India)
Legal Status: This is an Ordinance that has been promulgated and is currently in force. It will be tabled in the upcoming winter session of the Haryana Legislative Assembly for conversion into an Act.
Working Hours: The daily working hour limit is increased to 10 hours/day, while retaining the weekly cap of approximately 48 hours/week.
Overtime: Any work beyond 10 hours a day and 48 hours a week is overtime. The quarterly overtime limits are expanded up to 156 hours per quarter. Overtime must be paid at double the employee’s regular rate of pay for overtime work, and:
- Employee consent is mandatory
- Detailed OT registers must be maintained
- Employers must avoid coercion and ensure voluntary overtime
Breaks: The maximum period of continuous work before a mandatory rest interval has been extended from 5 hours to 6 hours.
Previously: Governing Act: The Punjab Shops and Commercial Establishments Act, 1958 (as applicable to Haryana)
Working Hours: An employee’s daily working hours shall not exceed more than 9 hours per day and 48 hours per week.
Overtime: Any work performed beyond 9 hours per day and 48 hours a week is considered as overtime. An employee working hour including overtime shall not exceed 10 hours per day. Hence, a maximum of 1 hours of overtime can be performed in a day.
Total number of overtime hours shall not exceed 50 hours in a period of 3 consecutive months.
Pay: Employee is entitled to receive at least double their regular rate of pay for overtime work.
Breaks and spread over: Employees shall not be allowed to work for more than 5 hours without an unpaid break period of at least 30 minutes.
The spread-over of working hours in a day, inclusive of breaks, must not exceed 12 hours per day.
Maharashtra
Current Law : Maharashtra Shops and Establishments (Amendment) Ordinance, 2025
The Maharashtra Shops and Establishments (Amendment) Ordinance, 2025, effective 1 October 2025, is currently in force as an Ordinance. It will remain valid for six weeks from the reassembly of the State Legislature and must be converted into an Act by the Maharashtra Legislative Assembly to become permanent law.
Working Hours: An employee daily working hours is increase up to 10 hours/day and 48 hours per week.
Some categories/establishments (especially continuous-process or special zones) granted expanded flexibility
Overtime: Any work beyond 10 hours a day and 48 hours a week is Overtime. The quarterly overtime ceiling increased from 125 hours to 144 hours/quarter. The employer and employee must follow the key obligations:
- Overtime must be voluntary
- Paid at double the employee’s regular rate of pay for overtime work
- Employer must maintain digital/physical overtime registers.
Night Work / Women: Women can work night shifts with written consent, provided the employer ensures:
- Safe & GPS-enabled transport
- CCTV coverage
- Female supervisors
- Well-lit workplace & restrooms
- No back-to-back day/night shifts This is now formally allowed without needing special case-by-case permissions.
Breaks / Spread-over: Employees shall not be allowed to work for more than 6 hours without an unpaid break period of at least 30 minutes.
The spread-over of working hours in a day, inclusive of breaks, must not exceed 12 hours per day.
Previously: Governing Act: The Maharashtra Shops and Establishments (Regulation of Employment and Conditions of Service) Act, 2017
Working Hours: An employee’s daily working hours shall not exceed more than 9 hours per day and 48 hours per week.
Overtime: Any work performed beyond 9 hours per day and 48 hours a week is considered as overtime.
Total number of overtime hours shall not exceed 125 hours in a period of 3 consecutive months.
Pay : Employee is entitled to receive at least double their regular rate of pay for overtime work.
Breaks and spread over: Employees shall not be allowed to work for more than 5 hours without an unpaid break period of at least 30 minutes.
The spread-over of working hours in a day, inclusive of breaks, must not exceed 10.5 hours per day.
Night Work / Women: Earlier, women’s night work (between 7 PM – 6 AM) was restricted unless employers obtained permission and ensured safety conditions, including transport and security. Permissions were generally granted but not automatically allowed.
Andhra Pradesh
Current Law : The Andhra Pradesh Shops and Establishments (Amendment) Act, 2025
Working Hours: An employee daily working hours is increase up to 10 hours/day and 48 hours per week.
Overtime: Any work beyond 10 hours a day and 48 hours a week is overtime. . The quarterly overtime limits is expanded up to 144 hours per quarter. Overtime must be paid at double the employee’s regular rate of pay for overtime work. The employer and employee must follow the key obligations:
- Overtime must be voluntary
- Paid at double the employee’s regular rate of pay for overtime work.
- Employer must maintain digital/physical overtime registers
Breaks and spread over: Employees shall not be allowed to work for more than 6 hours without an unpaid break period of at least 30 minutes.
Previously: Governing Act: The Andhra Pradesh Shops and Establishments Act, 1988 (Act No. 20 of 1988)
Working Hours: An employee’s daily working hours shall not exceed more than 8 hours per day and 48 hours per week.
Overtime: Any work performed beyond 8 hours per day and 48 hours a week is considered as overtime. No employee shall be allowed to work overtime, for more than 7 days at a stretch.
Total number of overtime hours shall not exceed 50 hours in a period of 3 consecutive months.
Pay: Employee is entitled to receive at least double their regular rate of pay for overtime work.
Breaks and spread over: Employees shall not be allowed to work for more than 5 hours without an unpaid break period of at least 1 hour.
The period of work of an employee inclusive of interval for rest shall not spread over for more than 12 hours (inclusive of overtime) in any day.
Several Indian States such as Uttar Pradesh, Delhi, Gujarat, Odisha, and West Bengal etc have either enacted or released similar draft amendments to their respective Shops and Establishments Acts with the objective of aligning their regulatory frameworks with the anticipated implementation of the Central Labour Codes and responding to evolving economic and operational requirements.
These state-level reforms broadly reflect a move toward harmonised standards, including longer permissible daily working hours, expanded quarterly overtime ceilings, more liberal night-shift permissions for women subject to safety conditions, and reduced compliance obligations for smaller establishments.
Leave & Gratuity Reforms
Previously, employees became eligible for annual leave only upon completing 240 days of work in a calendar year.
Under the new regime, this eligibility threshold for availing annual leave is reduced to 180 days, thereby enabling earlier access to earned leave. The entitlement structure remains unchanged, with employees continuing to accrue one day of leave for every twenty days of actual work performed.
The new framework also clarifies that periods of lay-off, maternity leave, and approved leave count toward the 180-day eligibility calculation, strengthening employee protections. Accrued annual leave continues to be carried forward and encashed in accordance with statutory limits, though state rules may prescribe specific caps.
Women Working at Night
Previously, many state laws restricted women from working at night unless employers obtained specific exemptions, resulting in inconsistent and limited permissions across jurisdictions.
Under the new regime, women may be employed during night shifts, provided employers implement mandatory safeguards such as secure transportation, workplace safety measures, and written consent creating a uniform and regulated framework for night work.
Key Employer Obligations and Compliance Considerations
As the Codes move toward full implementation, employers should prioritise compliance areas that directly affect workforce structuring, payroll accuracy, time management, and regulatory exposure.
Workforce Classification
- Reassess all categories of workers permanent, fixed-term, gig, and platform to ensure alignment with statutory definitions.
- Identify and mitigate misclassification risks that may trigger retrospective social-security liabilities.
Employment Documentation and Policies
- Update appointment letters, HR policies, shift regulations, and standing orders to reflect new requirements.
- Incorporate provisions on overtime consent, night-work conditions, leave eligibility, and fixed-term employment.
- Review vendor and contractor agreements in light of restrictions on engagement of contract labour in core activities.
Wage Structure and Payroll Compliance
- Conduct a wage-structure review to confirm allowances do not exceed the 50% statutory cap.
- Recalibrate PF, ESI, gratuity, overtime, and leave encashment calculations.
- Ensure payroll systems track statutory payment deadlines across all categories of workers.
Time and Attendance Governance
- Strengthen mechanisms for recording working hours, breaks, and shift patterns.
- Ensure written employee consent is captured for overtime, which is now uniformly payable at twice the ordinary rate.
- Maintain digital attendance and wage registers to support audits under the inspector-cum-facilitator model, which relies on online and risk-based inspections.
Multi-State Compliance Management
- Monitor state-specific rules as they are notified, recognising that implementation timelines and thresholds may vary.
- Prepare for parallel applicability of legacy state laws and the Codes during the transition period.
- Develop jurisdiction-wise compliance matrices until uniform nationwide enforcement is achieved.
Take away: India’s Labour Codes signal a major move toward a unified and modern regulatory framework. While legally in force, full implementation depends on state-level rulemaking. Employers should use this transition period to enhance time-tracking, statutory wage calculations, and multi-state compliance systems to ensure readiness for complete enforcement.