international employment law firm alliance L&E Global
India | IndusLaw
03. Working Conditions
Employment Law Overview India
Cross-Border Remote Work FAQs India
Employees vs Independent Contractors India
Starting a business in India

03. Working Conditions

Minimum Working Conditions

Requirements in this regard are principally stipulated in the concerned S&E Acts, the FA Act, the IESO Act and the CLRA. The S&E Acts have stipulations relating to working hours, overtime, intervals of rest, provision of basic amenities such as drinking water, toilets, first aid facilities, etc., for employees at shops and commercial establishments. The Standing Orders formulated as per the IESO Act also have stipulations with respect to work timings, leave, overtime, holidays, for industrial establishments engaging more than 100 workmen (the threshold may be different for certain States).

The FA has extensive provisions in respect to the health, safety and welfare of workers engaged in manufacturing establishments – these compliances vary depending on the number of workmen engaged. For instance, in industrial establishments where 250 or more workmen are employed, the employer has to provide for a canteen. Suitable shelters or rest rooms, and lunchrooms with drinking water facilities are to be provided where 150 workmen are employed. Factories wherein 30 or more women workers are ordinarily employed, are to be equipped with creche facilities/nurseries for children under the age of 6 years. There are also provisions regarding toilets, washing places, temperature control mechanisms, adequate ventilation, lighting in the workrooms, painting of factory walls, doors and windows, cleaning of floors, effective removal of dirt and refuse, etc. The FA Act envisages certain precautions to be taken against explosives, inflammable gases, dangerous fumes and gases and fire.

Under the CLRA Act, the contractor is required to provide certain facilities, which include rest rooms, child nursery facilities, canteens, wholesome drinking water, toilets, washing facilities, and first aid.  It is pertinent to note that if the contractor does not provide these facilities, the onus would fall on the principal employer.


Although the words ‘wages’ and ‘salary’ are commonly used interchangeably, there is a discernible difference between the two. The term ‘wages’ is used under labour/employment laws to refer to any and all remuneration and emoluments earned by an employee (excluding certain allowances and bonuses) whereas the term ‘salary’ is used under income tax law to denote the total taxable income received by an employee. It is important to note that currently, different labour laws have dissimilar definitions of wages. However, the same is likely to be remedied under the Code of Wages, which provides for a uniform definition of wages, which would then have to be closely examined.

For instance, the EPF Act refers to ‘basic wages’ which is used as the base for computing employee and employer social security contributions. Basic wages are defined as all payments which are earned by an employee in accordance with the terms of the employment contract, but does not include: i) the cash value of any food concession; ii) any dearness allowance (i.e. cash payments paid on account of a rise in the cost of living), house-rent allowance, overtime allowance, bonus, commission or any other similar allowance; and iii) any presents made by the employer.

The Wages Act on the other hand, has a much wider definition of wages; here ‘wages’ is defined as all remuneration (whether by way of salary, allowances, or otherwise) expressed in terms of money or capable of being so expressed, which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment and includes: i) any remuneration payable under any award or settlement between the parties or order of a Court; ii) any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period; iii) any additional remuneration payable under the terms of employment (whether called a bonus or by any other name); iv) any sum which by reason of termination of employment is payable under any law, contract or instrument; and v) any sum to which the person employed is entitled under any scheme framed under any law for the time being in force.

The following are excluded: i) any bonus (whether under a scheme of profit sharing or otherwise) which does not form part of the remuneration under the terms of employment or which is not payable under any award or settlement between the parties or order of a Court; ii) the value of any house-accommodation, or of the supply of light, water, medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of the State Government; iii) any contribution made by the employer to any pension or provident fund, and the interest accrued thereon; iv) any travelling allowance or the value of any travelling concession; v) any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; or vi) any gratuity payable.

Maximum Working Week

This would be subject to stipulations in the State specific S&E Acts in cases of shops and commercial establishments and the FA Act for establishments in the manufacturing sector. As a general principle, employees cannot be required to work in any establishment for more than 9 hours a day or 48 hours a week, without attracting overtime payments. In order to overcome the economic crisis in times of pandemic, certain States have increased the permissible limits of working hours for employees, subject to certain conditions and restrictions.


As described above, employees working longer than 9 hours a day or 48 hours a week are typically entitled to overtime payments. An employee working ‘overtime’ becomes entitled to wages at the rate of twice his/her ordinary rate of wages and could also be entitled to a compensatory time off. This would however have to be analysed further; given that there are some States which also prohibit overtime work, except in limited circumstances.

Employer’s Obligation to Provide a Healthy and Safe Workplace

An employer’s health and safety obligations towards its employees are far more extensive in the manufacturing sector and in certain other sectors such as mines and building and construction. The various State-specific S&E Acts have special provisions with respect to ensuring safety of women who work during night shifts. Employers in such cases are required to ensure that adequate security and transport facilities are provided (at their own cost) to female employees.

As described above, the FA Act read with State specific rules thereunder has elaborate provisions regarding health and safety of workmen. These stipulations include maintaining cleanliness, disposal of wastes and effluents, provision of clean drinking water and toilets, ensuring a temperature control mechanism so as to prevent any injury to health of workmen, ensuring adequate lighting and ventilation, measures to prevent inhalation of dust and fumes, regulation of artificial humidification, measures to prevent overcrowding on factory premises, construction and proper maintenance of floors, stairs, passages and ensuring that they are obstruction free for the safety of the workers, fencing of dangerous machinery, providing suitable gear or appliances, driving belts and other safety devices. The FA Act also envisages precautions to be taken against explosives, inflammable gases, dangerous fumes, gases and fire. Non-compliance with provisions of the FA attracts both monetary penalty and imprisonment.

In addition, the ESI Act and the Employees Compensation Act, 1923 (“ECA”) also address compensation and other benefits that the employer must provide employees in contingencies such as maternity, temporary or permanent physical disablement due to injury arising in the course of employment that results in loss of wages or earning capacity, death due to employment injury, as well as medical care to workers and their immediate dependents.

Given changing economic requirements in recent times, especially in light of the ongoing COVID-19 pandemic, the Indian Government has been increasingly conscious of the needs of businesses as well. In the last 6 months, the Indian Government has already brought in certain significant changes in labour laws with the aim of improving the ease of doing business in India. Further, there are several other big-ticket reforms in the pipeline, which we hope will see the light of day in the near future.

Complaint Procedures

In the terms of the ISEO Act, employees are required to frame grievance redressal mechanisms to address individual worker complaints. Also, under the FA where there are 20 or more workmen, a grievance committee is to be constituted in the manner prescribed. In any case as a general practice, most employers do have an internal complaint mechanism that details the processes employees must follow, in case of any workplace related issues. It is also important to note that India has a standalone legislation pertaining to sexual harassment at the workplace – the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“SHW Act”) – which prescribes a detailed complaint mechanism for instances of sexual harassment, that all Indian establishments must adhere to.

Protection from Retaliation

India does not have extensive provisions regarding protection of employee complainants / whistleblowers, that apply to establishments in the private sector. However, the SHW Act stipulates that during the pendency of any inquiry, companies must take interim measures to protect the complainant from any retaliation at the workplace. Most employers do have stipulations in their employee handbooks / internal policies that address employee complaints and protection from any retaliation in this regard.

Any questions

Ask our member firm IndusLaw in India