The Central Government has announced four Labour Codes on Friday, November 21, to consolidate and rationalise the existing 29 labour laws. These four Labour Codes are – the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020. While the reforms cover several aspects of labour regulations, one thing receiving relatively less attention is the working hours and overtime compensation.
8-hour workday, 48-hour work week
Under the new Labour Codes, employers must limit regular working hours to 8 hours a day and 48 hours a week. This means that even if a five-day workweek or flexible scheduling is introduced, the total working hours in a day cannot exceed 12 hours, including rest breaks.
The Codes also mandate that any work beyond the prescribed limits must be voluntary and performed only with the employee’s consent. Overtime must be paid at twice the employee’s regular wage rate, ensuring fair compensation for all additional hours worked beyond the standard schedule.
‘Let’s see how many CEOs…’: What social media users have to say?
While reacting to the news, one social media user said that it would be interesting to see if CEOs have enough money to pay their employees as compensation for overtime. “As per new labour reforms maximum of 48 hours per week is allowed, and overtime should be paid at double rate. Let’s see how many CEO has enough money to make their employees work 70 hours a week,” read the comment.
Another added, “8 hours/day is 40 hours/week. How does 48 hours/week come into the picture?”
“This has two aspects. Abuse of the workforce would stop. Those with strong unions will work in overtime only, specially convicts,” commented a third.
A fourth posted, “This is for blue collar workers who are anyway paid OT beyond 48 Hrs. Not sure white collar will protest or claim OT.”
Why were the Four Labour Codes introduced?
The government says the Four Labour Codes were created to simplify compliance, make enforcement more consistent, and modernise India’s labour laws so they match today’s economic needs and technological realities.
Code 1: The Code of Wages, 2019
The Code of Wages merges four older laws – the Payment of Wages Act (1936), the Minimum Wages Act (1948), the Payment of Bonus Act (1965), and the Equal Remuneration Act (1976). By consolidating these, the Code aims to ensure stronger protection of workers’ wage rights while giving employers a uniform, easier-to-follow system for wage-related compliance.
Code 2: The Industrial Relations Code, 2020
The Industrial Relations Code brings together and rationalises provisions from the Trade Unions Act (1926), the Industrial Employment (Standing Orders) Act (1946), and the Industrial Disputes Act (1947). The Code is based on the principle that workers’ welfare is closely tied to the healthy functioning of industry. It seeks to simplify laws on trade unions, employment conditions, and the resolution of industrial disputes, making the framework more predictable and efficient for both workers and employers.
Code 3: The Code on Social Security, 2020
This Code unifies nine existing social security laws, including those on compensation, provident fund, state insurance, maternity benefits, gratuity, and welfare funds for cine and construction workers. It expands social security to all categories of workers, especially unorganised, gig, and platform workers, offering benefits related to health, life, maternity, and retirement. The Code also introduces digital processes and facilitator-based compliance to make access to benefits more streamlined and transparent.
Code 4: The Occupational Safety, Health and Working Conditions Code, 2020
This Code consolidates provisions from 13 central labour laws covering factories, mines, plantations, transport, contract labour, migrant workers, building and construction workers, journalists, cinema workers, and more. It aims to ensure safe, healthy working environments while reducing excessive regulatory burden on businesses. By modernising standards and procedures, the Code seeks to protect worker rights and, at the same time, support economic growth and job creation.