Navigating Overtime and Leave Policies in Indian IT: How Do You Handle These Challenges?

Hi people,

Mine is a newly established IT company in Pune, and we are working on fixing various policies for the company. One confusion that we have is regarding the overtime policies followed in IT companies in India.

Our Director has specified that each employee has to put in a minimum of 10 hours each day because that is the standard industry practice in the IT industry. What are the maximum hours that the employee should be working in a week according to the Bombay Shops and Establishment Act? I know it is 48 hours for a 6-day work week. But what about a 5-day work week, like we have? If it is 40 hours, should the employees be given overtime money for the extra 2 hours?

Also, an employee on probation is not allowed any sort of paid leave for 6 months, even if it is sick leave. Therefore, if one employee takes a full day leave on a weekday but comes to work on a holiday like Saturday, can that be taken as a compensatory workday? And similarly, can half days be compensated for by putting in extra hours?

Normal working hours are not fixed considering the kind of industry but are according to the relevant Act under which the establishment falls. IT falls under the Shops and Commercial Establishments Act, which has fixed working hours applicable to all establishments, including IT. These hours may be 8 or 9 hours per day (since the Shops and Commercial Establishments Act is a state Act, there may be slight changes), subject to a maximum of 48 hours. The Act also specifies that the spread over (the period including intervals of rest) should not exceed 10 hours and 30 minutes. There is a provision that employees should be given one hour of rest after every 4 hours of work. When considering all these factors, 10 hours of work is not practical for any establishment. Since there is no special exemption granted to IT companies in this regard, framing a policy with a 10-hour working time may lead to objections from the Labour Department.

Placing an employee on probation is for the convenience of the employer but should not infringe upon any rights of employees conferred by labor laws. Therefore, an employee on probation should also be entitled to Casual and Sick leaves during the probation period.

Regards,

Madhu.T.K

Thanks a lot, Madhu. This was of great help.

I was wondering, if the employees are not given leaves during the 6-month probation period, will the leaves accumulate, right?

According to my understanding, under the Bombay Shops and Establishments Act, which we comply with, it is mandatory to provide 21 days of leave for every 8-month period that the employee has worked. Is that correct?

Dear All,

As per the AP Shops and Establishment Act, if an employee works more than 8 hours, the company is required to pay double the amount for overtime expenses. For example, if an employee works for 10 hours, we need to pay for 2 hours at double the rate of their daily wages.

Thank you.

I have not gone into detail about the Bombay Shops and Commercial Establishments Act, but under the Kerala Act, which is almost similar to the Acts of other states, it allows for 12 days of Casual Leave and 12 days of Sick Leave for a period of 12 months (not 8 months). Additionally, in addition to these, there are 12 days of Earned leave for those who have completed 12 months of service with the establishment.

Regards,
Madhu.T.K

Hello Sonia,

This is Sheela. I am also working with an IT company in Pune. It's a newly started organization. If you want, we can share the information and problems we face in our daily activities. We can work together. My email ID is sheelamunde@gmail.com.

Looking forward to your reply.

Sheela

Hi all, [Especially Mr. Madhu T.K.]

In Maharashtra, asking an employee to work for more than 8 hours in a day is, of course, illegal. Even if the company has a 5-day week, on no day can an employee be made to work for more than 8 hours [unless overtime is paid]. There is a categorical bar in the Bombay Shops and Establishments Act to that effect.

Other provisions of the Bombay Shops and Establishments Act include:

- 21 days of earned/paid leave in a year
- 3 national holidays and one state holiday (Maharashtra Day) [else overtime pay + other compensatory off]
- Each week must have one holiday [else overtime pay must be provided]

A probationer is in no way treated differently by the Bombay Act concerning rights such as leave, etc. They are at par with other employees provided they have completed the required number of days of employment as stipulated by the Act. Most employers fail to follow the law that an employee can be appointed on probation for a period of 3 months only, and that probation cannot be extended [subject to certain exceptions provided by law]. Appointment on probation for more than 3 months is illegal, and the employee is deemed permanent on the first day of employment after the completion of the 3rd month, regardless of the terms in their appointment letter. Unfortunately, very few employers in the IT industry are aware of this, and even fewer follow this legal provision.

Labour Law Consultant, Pune

Email: sameerparanjapeadv@yahoo.co.in

Phone: 9850083760