Is it Legal under the New Labour Code to extend employee work days beyond eight hours?
The introduction of India’s new labour codes has caused a shift in the way HR professionals are structuring, recording, and compensating working hours. The new code maintains a 48-hour week as a fundamental principle but provides that there may be flexibility in daily working hours, with some cases allowing for up to 12 hours of work daily. Many different industries have questions surrounding this new provision because of the potential impact on employee welfare and productivity.
With compliance, employee welfare, and business requirements top of mind, organisations are strategically evaluating how to effectively use technology to manage attendance, payroll, and leave policies in connection with the 48-hour weekly cap and the new flexible daily hours provision. This complete guide discusses how to manage all the above mentioned issues and will provide HR professionals with the necessary tools to successfully adapt to these changes.
Understanding the 48-Hour Weekly Limit Under the New Labour Codes
The weekly maximum workweek of 48 hours is not new; it has been set since at least the original Factories Act. That law limited a worker’s maximum hours to 48 per week and 9 per day. The OSH Code now consolidates and simplifies these regulations with regard to working hours.
Major Highlights of the Weekly 48-Hour Limit
- Maximum total working hours = 48 per week.
- Overtime wages are if more than 48 total working hours.
- Required to provide rest breaks between shifts.
- Required to provide at least one day off each week.
- Requirement for employers to maintain documentation of their compliance with this law.
This new framework provides a better definition and uniformity for all affected by this issue. While employers have the ability to distribute total working hours throughout the week, they may not exceed the total of 48 working hours without having to pay overtime.
Flexible Daily Working Hours: What HR Must Know?
One focus of discussion surrounding the revamped labour codes relates to the ability of workers to work flexible daily hours (potentially working as many as 12 hours per day).
Is there a requirement for a 12-hour workday?
No. From a practical standpoint, a company is not required to provide a worker with a 12-hour workday. However, where an employer chooses to have flexible shift arrangements, they are bound by certain requirements, including the following:
- Cannot exceed 48 working hours in any week.
- When hours exceed the weekly limit, the employer must pay for overtime.
- When working, the worker must receive rest periods (rest breaks) and must be provided with at least one day off each calendar week.
For example:
| Scenario | Daily Hours | Weekly Total | Overtime? |
| 8 hrs × 6 days | 8 | 48 | No |
| 12 hrs × 4 days | 12 | 48 | No |
| 10 hrs × 6 days | 10 | 60 | Yes (12 hrs overtime) |
This flexibility can benefit industries like manufacturing, logistics, healthcare, and IT, where project-based or peak-demand cycles exist.
What Are the Legal Safeguards Around Working Hours?
While flexibility is permitted, compliance remains strict. HR must ensure:
1. Weekly Working Hour Limits
Employers should not allow employees to work more than the legally permitted maximum weekly hours (48 hours) without making the required additional payments for overtime.
2. Overtime Wage Rates
Employees must be paid overtime wages for any hours worked above the standard weekly hours of work (generally, at least half of an employee’s normal hourly wage) (but may be required to pay the overtime wages for the hours worked).
3. Required Breaks
Employees must take breaks for a legally required period of time to prevent excessive fatigue, to ensure they remain safe while on the job, and to help maintain their productivity.
4. Weekly Time Off
An employee has a right to receive at least one full day off from work every week.
5. Attendance Records
Employers must keep complete records to document each employee’s attendance on a daily basis, including the number of hours worked per day, the number of hours of overtime worked, and the days each employee was off for compliance purposes.
6. Compliance with Occupational Health and Safety
Extended hours must be compliant with occupational health and safety regulations (i.e., excessive fatigue, workplace hazards) and must protect the health and safety of employees.
Failure to comply can result in penalties under the new labour codes.
What is the Impact of a 48-Hour Weekly Limit on HR Policies?
The shift toward flexible scheduling affects multiple HR functions:
1. Workforce Planning
Planning the workforce is greatly affected by the move to flexible scheduling and new shift management strategies.
- Switch shift rosters to keep employees under 48 hours of work per week.
- Automate alerts to avoid employees working more than 48 hours in any given week.
- Adjust staffing to ensure that you have enough employees to run your business smoothly with no disruption.
- Use workforce analytics to predict how many employees you will need at any given time.
- Change employee shifts regularly to minimise fatigue and prevent burnout.
- Have appropriate documentation available during inspections and compliance audits.
2. Compensation Structure
The 48-hour weekly cap will have a direct effect when calculating overtime rates, for wage structure creation, and for statutory compliance.
- Ensure that the payroll software you are using automatically calculates overtime in excess of 48 hours.
- Ensure that your payroll system provides separate pay slip entries for regular wage payments and overtime wage payments.
- Integrate your time and attendance management software with your payroll systems to ensure proper calculation of overtime.
- Ensure that statutory overtime rate calculations occur without any manual intervention.
- Store digital copies of all wage registers for compliance reporting.
- Perform periodic payroll audits on your organization to reduce potential legal risks.
3. Leave Policy Alignments
The flexibility of work days can influence the accumulation of leave, the deduction of leave, and the cashing out of leave.
- Revise leave policies to reflect the new hours of operation.
- Adjust any software used for calculating leave accumulations to include allocated accumulations.
- Establish policies that define when and how an employee’s leave is deducted if they work a 13-hour shift instead of an 8-hour shift.
- Align leave encashment calculations to the new pay scale structure.
- Utilize a method of accurately tracking half-day or hourly leave when an employee is working under the new model.
- Provide employees with instant access to check their available leave to promote transparency.
How Is Overtime Calculated Under the 48-Hour Weekly Rule?
Let’s break it down practically.
When an employee has a monthly salary of ₹20000 and an average of 60 hours per week.
- Standard weekly limit: 48 hours
- Overtime hours: 12
- Overtime rate: 2× regular wage
Calculating overtime for 100’s of employees is extremely difficult without an automated system.
Modern Payroll Systems:
- Automatically calculate overtime
- Automatically connect to and interface with your company’s attendance system
- Generate all legal reports
- Meet all of your tax obligations.
What Are the Sector-Wise Implications of Flexible Working Hours?
1. Manufacturing & Industrial Units:
Long work schedules can minimise downtime in production processes by allowing fewer hand-offs (transitions), which improves continuity in production operations and facilitates more consistent operating time.
Extended shifts also require more strict compliance with safety regulations, fatigue monitoring and adequate supervision to prevent accidents and errors from occurring as a result of long working hours.
2. IT And Services:
Flexible or project-based schedules provide a level of flexibility that assists teams in effectively aligning their start and end times with those of their global customers in different time zones.
The use of structured flexibility may improve productivity, expedite deliveries and enhance the efficiency of resource utilisation while still complying with weekly limits on hours worked and the application of overtime policies.
3. Healthcare:
Flexible duty rosters greatly assist hospitals in addressing the need for a quick and effective response to emergency conditions, seasonal increases in patients, and unanticipated shortages of staff.
Healthcare providers should also pay close attention to fatigue levels when developing duty rosters, as fatigue can negatively impact the safety of patients and the well-being of healthcare workers.
What is the Role of HRMS in Managing the 48-Hour Weekly Limit?
1. Real-Time Monitoring of Employee Work Hours
Having an HRMS track employees’ daily and weekly work hours automatically ensures that you do not exceed the maximum number of hours an individual can work per week (48), and helps you avoid any potential violations or non-compliance with local labour laws.
2. Instant Overtime Calculations
Using integrated payroll software will allow employers to calculate the amount of overtime an employee is entitled to receive immediately when that employee has an hour of work over and above what the law allows.
3. Attendance and Shift Management
Attendance management systems track all clock-ins, shifts, and weekly days off. They provide you with real-time data of your employees, and thus, you will always have transparent and auditable records for all of your employees.
4. Leave Integration and Balance Accuracy
Leave management software links to your attendance management system and updates the number of hours you have working from an employee’s leave record using the employee’s flexible work schedule.
5. Compliance Reporting & Documentation
HRMS will automatically create all of the necessary statutory reports, wage registers, and inspection-ready documentation to comply with the new legislation regarding the Labour Code.
What are the Common Misconceptions About the 48-Hour Weekly Limit?
Myth 1: The 48-Hr Weekly Limit Applies To 8-Hrs Per Day Only
People think that the daily hour limit for work cannot exceed eight hours.
However, if the total hours worked by an employee during the week do not exceed 48, then flexible working schedules are permitted.
Myth 2: 12-Hour Shifts Are Required Now
The new regulations allow for flexibility in the number of hours worked each day.
This means that organizations are no longer required to implement 12-hour shifts.
Myth 3: Overtime Only Applies After 12-Hr Workday
The trigger for overtime is if the total number of hours worked in a week exceeds 48.
This will occur regardless of how those hours are allocated over the course of each day.
Myth 4: Employers Can Change Employees’ Shifts To Avoid Paying Overtime
Altering shifts does not relieve an employer from paying overtime if the total number of hours worked by an employee in that week exceeds the 48 hrs requirement.
Myth 5: The Regulation Only Applies To Manufacturing Companies
The 48-Hour limit does apply to all sectors and industries, with the specific condition of that sector found in the applicable labour and employment legislation.
How HR Can Strategically Implement Flexible Hours?
If your organization is considering a shift in restructuring, follow these steps:
Step 1: Understand What the Laws Say
Understand how central and state-level legislation outlines requirements around an individual conducting a minimum of 48 hours per week in total, what does this legislation actually mean for different sectors?
Step 2: Understand Industry Needs
Look at how work volumes, seasonal fluctuations and employee shortages impact your organisation’s operations to see where flexible working hours could be beneficial while remaining compliant with current legislation regarding maximum hours per week for employees.
Step 3: Modify HR Policy
Update HR policies to reflect current legislation on shift patterns, hours worked in a week, holiday entitlements and how employees should record their hours worked in an appropriate fashion in line with current legislative requirements.
Step 4: Update Systems
Update your attendance management system, payroll system, or leave management system to comply with changes to HR Policy, including automated overtime calculation, reporting and statutory compliance processes.
Step 5: Train Managers
Train managers to understand maximum work hours per week, overtime obligations for employees, shift planning and documentation as required by current legislation to avoid creating an environment of accidental conflict for your organisation.
Step 6: Inform Employees
Once you’ve created your new shift programs, overtime policies and holiday adjustment programmes, then it’s important to communicate those to all employees. You want to create an open and transparent working environment where employees understand the changes and feel secure, comfortable and trusted within that environment.
What are the Documentation Requirements Under the New Labour Codes?
Employers Must Maintain
Under the new labour laws, employers are required to have statutory records that comply with the 48-hour weekly limit.
1. Attendance Register
Daily detailed records of staff’s working hours, shift timings, weekly offs, and overtime for accurate tracking and to be ready for daily inspections.
2. Wage Register
Complete records of all salary components, overtime payments, deductions from salary, bonuses, and statutory contributions of employees for transparency on payroll compliance.
3. Overtime Record
Track the number of hours worked that exceed the 48 hours in one week and include the workflow of approving overtime and calculating overtime wages in accordance with the law.
4. Leave Records
The method by which to keep track of the amount of leave that has been taken, earned, and accumulated by the employee. The method by which the employee can earn leave.
5. Shift Roster
A schedule that has the scheduled hours for the employees every week for the rest period according to the regulations.
6. Employee Master Data
Updated employee profile for auditing purposes to include designation, department, wage amount, and employment status.
Digital Documentation Through HRMS Ensures
The use of an integrated HRMS provides industries substantial benefits in terms of compliance management and reducing administrative load on HR departments.
1. Simplify Inspections
Effortlessly generate statutory reports, attendance summaries, and wage registers for labour inspections with immediate generation vs delayed compilation due to manual processes.
2. Less Paperwork
By digitising attendance, payroll, and leave management processes, you can remove all physical registers and spreadsheets that you currently maintain, leaving only an electronic record that can be accessed from one centralised database.
3. Secure Record Storage
Keep private employee information secure by using controlled access levels, encryption methods, and secure cloud-based backup services.
4. Automated Compliance Reports
Automatically generate reports that comply with the new labour coding and regulations established through the various state statutes and regulations.
5. Accurate Data in Real Time
Minimise the potential for human error and ensure that attendance tracking software is fully integrated with leave management software and payroll software to ensure accurate and timely data entry.
6. Audit Trails of Transactions
Maintain time-stamped logs of approvals as well as any subsequent changes made to approvals, including edits, data modifications, and transactions, so that you can provide both transparency for your organization as well as defend your compliance with third parties.
Conclusion
Under the newly implemented labour codes, India’s hourly working limit for employees remains at 48 hours per week, yet there is now much more flexibility in how employers manage daily hours of work for their employees. The biggest challenge facing HR departments is to accurately record employee attendance, calculate overtime pay accurately, manage leave balances correctly, and process the payroll in a timely and compliant manner.
Employers can utilize strong attendance tracking systems, leave management systems, and payroll systems through an integrated HRMS such as Savvy HRMS in order to remain compliant with all of the regulations, provide better employee experiences, and be able to respond to changing labour regulations with confidence.
