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India’s overtime rules combine the labour codes, state law and surviving notifications. This guide explains eligibility, daily and weekly limits, double-pay calculations, consent, compensatory leave and records, with practical checks for Indian employers and overseas businesses managing India teams.
Overtime rules in India require covered employers to pay extra wages when an eligible employee works beyond the applicable normal hours. Under the Occupational Safety, Health and Working Conditions Code, 2020, overtime attracts twice the wage rate and requires the worker’s consent. The exact trigger, maximum hours and records depend on coverage, the appropriate government and the rules that apply to the workplace.
The Factories Act’s familiar nine-hour daily threshold is now a historical reference. The OSH Code commenced on 21 November 2025, and its final central rules followed in May 2026. State rules, surviving notifications and state Shops and Establishments laws still require a separate check.
For a US, UK, Australian or New Zealand business managing people in India, the practical question is simple: which rule applies to this person, in this location, on this working day? This guide explains how to answer it before approving a late call, weekend deployment or extended factory shift.
The current framework combines the OSH Code, the Code on Wages and relevant state legislation. Double-rate overtime is a core protection, but there is no single payroll setting that safely covers every Indian employee.
| Issue | Current position | What employers should check |
|---|---|---|
| Normal daily hours | OSH Code section 25 sets an eight-hour baseline for covered workers | Coverage and any valid exception or notification |
| Normal weekly hours | OSH Central Rule 64 sets 48 hours | Applicable central or state rules |
| Overtime pay | Twice wages under OSH section 27, at least twice normal wages under Wage Code section 14 | Eligibility and the correct wage components |
| Daily or weekly calculation | OSH section 27 requires the basis more favourable to the worker | Prescribed thresholds and the final rules’ wage-period distinction |
| Consent | Required for overtime under OSH section 27 | Evidence that the worker agreed to the additional work |
| Maximum overtime | Depends on the relevant rule and any valid exemption | Do not assume 125 or 144 hours applies nationwide |
| Compensatory leave | A separate rest entitlement where applicable | Whether overtime wages are also payable |
These starting points come from sections 25–27 of the OSH Code, section 14 of the Code on Wages and the final OSH Central Rules, 2026. The table is a coverage guide, not permission to schedule additional hours.
Yes. The commencement notifications dated 21 November 2025 brought the labour-code framework into operation. The relevant Wage Code provisions also commenced through S.O. 5322(E).
The final OSH Central Rules were notified through G.S.R. 345(E), dated 8 May 2026. The Code on Wages Central Rules, 2026 were notified through G.S.R. 343(E) on the same date. A 2020 or 2025 draft should therefore not be presented as the final central rule.
Commencement of a Code and notification of state rules are different events. A state’s unfinished rulemaking does not mean the central legislation never commenced.
Yes, for historical liabilities and the transition, but it should not be described as the unchanged current national factory law. OSH Code section 143 repeals the Factories Act and preserves earlier rules, notifications and actions to the extent they are not contrary to the Code.
For an overtime claim covering several years, separate the periods. Apply the law relevant when the work occurred, then examine the savings provisions. Do not calculate a 2024 claim using a 2026 rule simply because the claim is raised now.
Under section 59 of the Factories Act, a covered factory worker became entitled to twice the ordinary wage rate after more than nine hours in a day or 48 hours in a week. Daily and weekly limits were separate tests.
The official text of the Factories Act also separates normal hours, rest breaks, spread-over and exemptions. These distinctions remain useful when reviewing older attendance records.
| Provision | Historical central Act position | Why it matters in an audit |
|---|---|---|
| Section 51 | 48 normal working hours a week | A compliant daily shift could still produce weekly overtime |
| Section 54 | Nine normal working hours a day, subject to specified approval for more | The old daily baseline was nine, not eight |
| Section 55 | At least a half-hour rest after no more than five hours, subject to limited exemption | Break compliance required its own check |
| Section 56 | Ordinarily 10.5 hours of spread-over, including breaks, extendable by the inspector to 12 | Time on site was not identical to working time |
| Section 59 | Twice the ordinary wage rate for qualifying overtime | Both the hours and wage base needed verification |
These are the historical central provisions. State amendments and valid orders could change particular limits, so use the version applicable to the location and period being audited.
No. Section 59(2) included basic wages plus eligible allowances and the cash value of specified concessional benefits. It excluded bonus and overtime wages themselves.
A formula using only basic salary plus dearness allowance could therefore understate the historical ordinary wage rate. Payroll must examine the legal character of each allowance rather than copy the salary component labelled “basic”. Section 59(3) also supplied a specific earnings-based method for piece-rate workers.
No. The unamended central Act used different limits for different exemption routes. Section 64(4) included a 50-hour quarterly ceiling, while section 65(3) used 75 hours for the specified exceptional-work route. State amendments could change those figures.
Neither figure was a general entitlement to work that much overtime. The exemption, its conditions and the other working-hour restrictions had to apply. This is why an old handbook stating “India allows 50 hours per quarter” cannot settle a current scheduling decision.
Start with the establishment, location, worker classification and appropriate government. A company’s industry label or overseas headquarters does not answer all four questions.
The OSH Code’s definitions distinguish the central and state spheres. Factories are expressly assigned to the state government for occupational safety, health and working conditions. Having operations in several states does not, by itself, make an ordinary private company a central-sphere establishment.
Use the following sequence for each establishment and employee group.
Record the result with a source, effective date and review owner. A payroll provider should be able to explain the rule it configured, not merely confirm that its software is compliant.
Yes. The OSH Code’s repeal list does not simply abolish every state Shops and Establishments Act. Offices, shops and service businesses must assess those laws alongside applicable Code provisions.
A useful state register should capture daily hours, weekly hours, rest intervals, spread-over, overtime rate, overtime ceiling, weekly holidays and any sector exemption. Check the latest amendment as well as the base Act. A government webpage reproducing an older Act may not incorporate a recent amendment.
For example, separate your Maharashtra office, Karnataka office and employees working from Telangana into distinct location checks. Do not copy one state’s numerical limit into all three records. Where provisions overlap or appear inconsistent, resolve the issue under the relevant legal framework before publishing the roster.
Eligibility depends on the relevant law and the person’s actual work. Being salaried, working in IT or having “manager” in a job title does not automatically remove every overtime entitlement.
Two separate tests matter: the OSH Code’s narrower definition of “worker” and the Wage Code’s protection for qualifying employees whose minimum wage rate has been fixed under that Code.
No. They may fall outside the OSH Code’s worker definition while still requiring assessment under the Code on Wages.
OSH section 2(1)(zzl) excludes people employed mainly in managerial or administrative work. It also excludes supervisors whose wages exceed ₹18,000 a month, or another notified amount. That threshold relates to supervisory work. It is not a salary ceiling excluding every technical or clerical employee.
The Ministry’s March 2026 clarification on overtime eligibility, question 5, expressly addresses supervisory and managerial staff. It says that an employee, including a worker, whose minimum rate has been fixed under the Wage Code is eligible for overtime. “Earns more than minimum wage” and “has no applicable minimum wage rate” are different propositions.
Review duties and the applicable wage notification before recording an exemption. Job titles alone are weak evidence.
IT employees can qualify, subject to the applicable coverage and any valid exemption. An exemption from one provision of a state law is not a blanket exemption from the Wage Code or all working-time obligations.
Workers supplied through a contractor can also have statutory overtime rights. A genuine independent consultant presents a different classification question. If the arrangement operates like employment, calling the payment a consulting fee does not settle the issue. Peorient’s employee versus contractor guide explains the hiring distinction.
An employer of record arrangement also does not remove overtime protections. The EOR must apply the relevant employment and payroll rules, while the client needs to provide accurate information about the hours its managers request.
The answer depends on the applicable period, law and wage category. Nine hours comes from the historical Factories Act baseline. Eight hours comes from OSH section 25. The final central rules also distinguish daily-wage workers from other workers when describing overtime payment.
Treat these as separate legal provisions, not interchangeable versions of one rule.
OSH Central Rule 69(1) refers to more than eight hours in a day for a daily-wage worker and more than 48 hours in a week for a worker other than a daily-wage worker. Wage Code Central Rule 5 similarly distinguishes daily wage periods from other wage periods when defining normal hours.
At the same time, OSH section 25 sets the eight-hour daily baseline, and section 27 requires daily or weekly overtime calculation on the basis more favourable to the worker. State law and contractual terms may add another relevant entitlement.
A monthly salary is therefore not permission to roster any length of working day as long as the week stays below 48 hours. Where the central rules apply, document how payroll reconciles the worker’s wage category with sections 25 and 27. For a disputed pattern, obtain a location-specific interpretation rather than silently deleting the daily calculation.
Where both thresholds apply, calculate the daily and weekly outcomes and use the more favourable result under section 27. Do not automatically add both totals and count the same time twice.
Assume, for illustration, that the applicable arrangement uses an eight-hour daily threshold and a 48-hour weekly threshold, with no special rest-day premium involved.
| Actual work pattern | Total hours | Daily overtime | Weekly overtime | More favourable result |
|---|---|---|---|---|
| 10, 8, 8, 8, 8 hours | 42 | 2 | 0 | 2 overtime hours |
| 10, 10, 8, 8, 8, 8 hours | 52 | 4 | 4 | 4 overtime hours |
In the first example, a weekly-only calculation would miss the daily entitlement. In the second, adding four plus four would duplicate the same excess. These examples explain the comparison method. They do not classify every monthly-paid employee under an identical daily trigger.
A shorter day later in the week should not be assumed to erase an already accrued daily entitlement. Record the original hours and apply the relevant rule.
Calculate the legally relevant hourly wage, multiply it by the applicable overtime multiplier, then multiply by payable overtime hours. Validate the wage base and divisor before doing the arithmetic.
Overtime pay = eligible hourly wage × overtime multiplier × payable overtime hours.
Use the definition under the law being applied. Under the Codes, wages include basic pay, dearness allowance and retaining allowance, subject to the statutory inclusions, exclusions and add-back rule.
The wage definition in section 2(y) requires specified excluded components to be added back to the extent they exceed 50% of the relevant remuneration. It does not simply require every payslip to label 50% of CTC “basic salary”. CTC and statutory remuneration are not automatically the same number.
The Ministry’s additional labour-code FAQs also state that overtime allowance participates in the 50% calculation. Payroll should reconcile that treatment instead of permanently excluding overtime from every wage-definition check. This is a separate exercise from calculating the overtime payment itself.
A night-shift allowance or performance bonus should not automatically be treated as payment of statutory overtime. Show what the payment covers and verify that any overtime obligation is actually discharged.
Assume the applicable calculation uses ₹31,200 as monthly statutory wages, a 26-day divisor, eight normal hours and 12 payable overtime hours. Rule 69(3) provides the 26-day divisor for monthly-paid workers within its scope.
| Calculation | Result |
|---|---|
| Daily wage = ₹31,200 ÷ 26 | ₹1,200 |
| Hourly wage = ₹1,200 ÷ 8 | ₹150 |
| Overtime hourly rate = ₹150 × 2 | ₹300 |
| Overtime payment = ₹300 × 12 | ₹3,600 |
The additional overtime payment is ₹3,600. The example assumes the ₹31,200 wage base has already been legally determined. It is not a universal formula based on gross salary, take-home pay or CTC.
For a daily-wage worker earning an eligible ₹800 for eight hours, two payable overtime hours at double rate equal ₹400: ₹800 ÷ 8 × 2 × 2. Confirm that the extra work is permitted as well as payable.
When budgeting a team, include likely overtime alongside the other payroll costs in India. A low monthly salary estimate can conceal a recurring late-shift expense.
Apply the rounding provision that actually governs the employee. OSH Central Rule 69(2) counts a fraction between 15 and 30 minutes as half an hour and a fraction above 30 minutes as an hour. For example, 20 qualifying minutes become 30 and 40 become 60 under that rule.
Keep the actual minutes as well as the payable result. Do not infer a nationwide unpaid grace period for shorter fractions, especially because Wage Code section 14 refers to every hour or part of an hour beyond the normal working day.
Rule 69 requires overtime payment at the end of the wage period. Wage Code section 17 separately specifies wage-payment timelines, including the seventh day of the succeeding month for monthly wages, subject to applicable provisions. An internal approval cut-off should not become an indefinite postponement of earned overtime.
There is no single quarterly figure that an employer can apply to every Indian workplace. The ceiling must be read from the applicable final rule, state law or valid exemption, together with daily hours, weekly hours and rest requirements.
Payment at double rate does not legalise a shift that breaches those restrictions.
Neither number is a safe nationwide default. The final OSH Central Rule 69(4) contains a 144-hour quarterly ceiling in its provision on extended work for specified circumstances in docks, mines and building or other construction work. Those circumstances include urgent repairs and certain continuous or exceptional work.
The provision must be read with its stated context and the appropriate government’s jurisdiction. Its existence does not give every office or factory permission to schedule 144 extra hours. Likewise, a 125-hour figure copied from a state provision or an older article cannot be generalised across India.
Your attendance system should store the legal source behind its cap. When an employee approaches that limit, change the roster before assigning more work.
No. A 12-hour span, a 12-hour working shift and a four-day schedule describe different arrangements. Each needs an applicable legal basis and compliance with overtime, breaks, weekly rest and maximum-hours conditions.
For example, four days of 12 actual working hours total 48 hours. That arithmetic alone does not override an applicable daily limit or remove daily overtime. A state notification permitting extended operations also needs to be checked for its eligible establishments and conditions.
Plan the roster from the relevant notification, not from a headline about a “four-day workweek”.
Yes. Working time, time between the first and last task, and time off are separate records. A payroll total alone cannot show whether the roster respected all three.
A genuine break during which the person is free from work is generally distinct from actual working time, subject to the applicable rules. If the employee must answer calls or attend a meeting during the stated break, the attendance record should reflect that work.
The May 2026 central rest-interval notification specifies no more than five hours of continuous work followed by at least a half-hour interval within its legal scope. Also check the applicable state requirements and the total spread-over.
An eight-hour working day with a one-hour genuine lunch break spans nine hours. That does not mean the employee has worked nine hours. Conversely, calling an hour “lunch” does not make it a break when duties continue throughout it.
Do not assume so. A substitute weekly holiday and wages for additional work serve different legal requirements. Providing one does not automatically discharge the other.
OSH section 26 addresses weekly and compensatory holidays. Wage Code Central Rule 6 separately provides for rest-day work and payment, with specific conditions. A weekend assignment may therefore require a substitute rest day, overtime-rate payment or both, depending on the applicable regime.
Make the connection explicit in your India leave policy. “One comp-off for working Sunday” is incomplete unless the policy also explains the pay calculation and legal basis.
No. Night work and overtime are different concepts. A lawful night shift within normal hours can involve a shift allowance without generating overtime. Extra working time may still attract overtime, and night work can bring separate consent and safety requirements.
For shifts crossing midnight, OSH section 28 contains a specific rule for attributing post-midnight hours and calculating the worker’s day and weekly holiday. Configure the statutory workday correctly. A software reset at midnight should not split one long shift into two apparently short days.
An employer covered by OSH section 27 must obtain the worker’s consent for overtime. A salary clause cannot waive a statutory entitlement or authorise unlimited additional hours.
No. A manager approving business expenditure and a worker agreeing to additional work are different decisions. Retain evidence of both where relevant.
A practical record states the task, proposed date and hours, the approving manager and the worker’s agreement. If a worker declines, review coverage and the circumstances before treating the refusal as misconduct. A generic “business needs” clause is not a sound substitute for checking the consent requirement.
Investigate the actual work and the employer’s involvement before rejecting payment. A missed approval step does not, by itself, prove that qualifying work never occurred.
Check whether a manager assigned the work, knew it was being done or required a deadline that involved extra hours. Reconcile task records with attendance, then determine payment under the applicable law. Handle the approval-process failure separately.
Equally, remaining logged in is not conclusive evidence of continuous work. An effective policy captures actual duties and lets employees correct incomplete records.
Schedule around the Indian employee’s lawful working pattern and record work requested by overseas managers. A US, UK, Australian or New Zealand headquarters does not make its home-country overtime policy sufficient for Indian employment.
This matters most when a normal India workday is followed by recurring overseas calls.
Required business activity should be captured in the time record and assessed against the applicable overtime rules. Its short duration or informal channel does not make it disappear.
Consider an employee who completes eight hours of work and then joins a required 45-minute client call. Record the call, test the daily and weekly entitlement, and check spread-over. Do not count only the hours visible in the office attendance system.
A discussion about asking for overtime pay after joining a company illustrates a practical communication gap: employees may not know whether extra work is approved, paid or credited as leave. This is a qualitative account, not evidence of the law or a measure of how common the problem is.
Publish the answer before the assignment. A rota for overseas overlap, with adjusted normal hours where lawful, is easier to administer than unrecorded calls every evening.
Agree who approves the hours, records consent, checks legal limits and sends payroll evidence. The client manager controls much of the workload, even when the EOR issues the employment contract.
Before selecting a provider, ask for a sample calculation for one employee’s state and role. Ask how it handles daily versus weekly hours, late calls, weekend work, wage components and rejected timesheets. Peorient’s guide to choosing an employer of record provides the broader evaluation framework.
Also agree how overtime appears on the employee’s payslip and the client’s invoice. A disagreement over the service invoice should not become a reason to postpone wages that are legally due.
Keep enough evidence to reconstruct eligibility, actual working time, consent, the wage calculation and payment. A monthly attendance total alone cannot explain a daily overtime claim.
Maintain employee identification, work location, applicable rule, work date, shift start and end, genuine breaks, actual hours, payable overtime, wage base, multiplier and amount paid. Link these entries to consent, approvals and payment evidence.
Under the OSH Central Rules on registers, Rule 72 and Forms XIV–XVI address attendance, wages, overtime and wage slips. Rule 72(1)(vii) requires preservation for five calendar years from the last entry within its scope. Apply the prescribed forms and retention rules for your jurisdiction. Do not assume “Form 10” or a generic three-year period is universal.
For remote staff, allow employees to record work outside the planned shift. Preserve corrections with their date and reason. Replacing the original entry without an audit trail makes later disputes harder to resolve.
State the rules employees and managers need to act on, with a location annexure where necessary.
Review these controls with the wider payroll compliance process in India. Revisit the policy when a state rule changes, an employee relocates or a job’s actual duties change.
Start with a written reconciliation of the hours and wages, then use the appropriate statutory channel if the dispute remains unresolved. The right forum depends on the law, jurisdiction and nature of the claim.
Keep the employment agreement, payslips, attendance entries, shift rosters and instructions assigning the extra work. Calendar invitations and deployment logs can support the timing and purpose of the work.
Ask payroll to identify the applicable rule, eligibility decision, wage base and calculation. Present a date-by-date difference between recorded and paid hours. Preserve evidence you are entitled to access without collecting unrelated customer data or confidential files.
Wage Code section 45 allows claims before the designated authority, generally within three years of the claim arising, with delayed applications possible on sufficient cause. The authority may award compensation up to ten times the determined claim. This is discretionary, not an automatic tenfold payout.
Approach the relevant state labour authority or the central authority for a central-sphere matter. Verify the appropriate claim route before filing.
The Ministry’s SAMADHAN guidance identifies overtime allowance among employment grievances and directs new Labour Code filings to SAMADHAN 2.0. A portal submission does not itself decide eligibility or replace the jurisdictional assessment.
Different laws and historical claims can involve different procedures. Identify the work period and legal employer clearly in the complaint.
Underpayment, excessive hours and missing records can create separate liabilities. There is no single fine that describes every overtime breach.
| Breach | Statutory provision | Stated consequence |
|---|---|---|
| Paying less than the amount due under the Wage Code | Section 54(1)(a) | Fine up to ₹50,000 |
| Qualifying repeat underpayment after conviction | Section 54(1)(b) | Up to three months’ imprisonment, a fine up to ₹1 lakh, or both |
| Missing or improperly maintained Wage Code records | Section 54(2) | Fine up to ₹10,000 |
| Specified failures to maintain or produce OSH records or file returns | OSH section 96(1) | Penalty from ₹50,000 to ₹1 lakh |
These amounts come from the Wage Code penalty provisions and OSH section 96. Repeat-offence conditions and enforcement procedures matter. Other provisions may apply to the underlying hours breach or an injury.
Paying a fine does not settle the unpaid wage claim. Fix the payroll shortfall, the time record and the scheduling process that caused the problem.
Most remaining questions concern the boundary between extra work, contractual benefits and statutory pay. Apply the same coverage test before answering them.
No. A company’s 40-hour week and the statutory overtime threshold are different questions. The employment contract can promise payment or time off before the statutory threshold is reached. Daily limits and rest-day rules may also create an entitlement before 48 weekly hours.
The weekday’s name alone does not decide it. Check the designated rest day, holiday law, applicable overtime threshold and contract. Work on a legal rest day can attract a specific premium and substitute rest even where an ordinary weekly-hours calculation appears below the threshold.
No. High pay does not create a general exemption from statutory working-time protections. Assess eligibility, any lawful exclusion and the hours actually worked. Any contractual compensation arrangement must satisfy the applicable statutory entitlement.
No. Remote work does not automatically change employee status or erase applicable wage rights. Record the real work location, required duties and actual hours. Reassess state coverage when a remote employee relocates.
Do not substitute a monthly average for required daily or weekly tests. A low total in the next week does not automatically cancel the previous week’s entitlement. Use only an averaging arrangement the applicable law actually permits.
Confirm coverage, worker consent, remaining legal hours, required rest and the payable rate. If one of those is unresolved, adjust the assignment before it begins.
If your overseas business needs help comparing India employment partners, review our EOR providers in India comparison or send Peorient your hiring requirements. Include employee locations, roles and expected working hours so the comparison reflects the work your team will actually perform.
Written by
Head of Cross-Border Tax and Compliance · 14+ years experience
Claire leads cross-border tax and compliance at Peorient. Previously at PwC Global Mobility Tax and Mercer, she specialises in permanent establishment risk, employer tax obligations, and co-employment tax implications. CTA, ACCA, CEBS, M.Sc. Taxation (LSE).
Overtime in India depends on who is working, where the work happens and which rules apply. Understand the Factories Act transition, current labour codes and the calculations employers need to get right.
