Long hours, no overtime pay: Are India’s archaic labour laws enabling worker exploitation?

Workers allege that MNCs, including big tech firms, are exploiting these laws and skirting overtime payment.

In India, many white-collar private sector employees say they regularly work up to 12-14 hours a day. | Photo Credit: PUNIT PARANJPE/AFP/Getty Images

It is 7:30 am and like most days Rohan’s* workday is starting. Working for a British multinational, throughout the day he is on phone calls with clients and stakeholders based across time zones. There are short breaks between calls, but his day only ends at 9:30 pm—a grueling 14 hours later.

In a different city at 7:30 am, the first thing Aditi does upon waking up is check her work emails. Her work officially starts at 9 am and will go on to 11 pm. Every day, five days a week. She works for a major US consulting firm. She says the long workdays leave her “tired and anxious”. She ends up sleeping late trying to find some personal time. “I can’t imagine how people are managing marriages, kids, elder care along with long working hours,” she said.

Aditi and Rohan both have one thing in common—for their long hours working for major multinational corporations (MNCs), neither of them gets paid for the extra hours. Rohan and Aditi’s experiences are not isolated cases and highlight a broader pattern of exploitative workplace practices in India.

Amit K. has spent 17 years working for a company headquartered in London, currently overseeing a team with members based in both India and the Philippines. He says, despite working on the same projects, the Filipino employees receive overtime pay, “while India-based employees do not receive any extra compensation, regardless of the number of hours worked”.

MNCs circumvent law on technicality

Many white-collar private sector employees say they regularly work up to 12-14 hours a day. According to the Factories Act of 1948, which dictates overtime rules in India, if someone works for more than 8-9 hours a day, or 48 hours a week, they are entitled to double payment for the extra hours.

But the language of the act specifies that this is for “factory workers” or “workers”. Since Rohan and Aditi are not “factory workers” as per the legal definition, the overtime compensation does not apply to them.

Mahesh Godbole, who started out as a human resources (HR) professional almost 40 years ago, said: “In office environments, companies circumvent overtime laws by designating employees as ‘officers’ or ‘executives,’ categories to which overtime laws for ‘workers’ do not apply, creating a legal grey area.”

For this story, DW reached out to Meta, Apple, Amazon, Google, Ola Consumer, and KPMG, among other companies, asking about their overtime policies in India, but none of them responded to the queries.

Laws not in keeping with the times

The shift to remote work has also blurred the lines between professional and personal time in India, making it harder for MNC employees to disconnect from work. “For the companies, the idea of work-life balance is a marketing gimmick,” said Isha* who has been working for an Indian multinational conglomerate for five years and, in her words, “has put in the never-ending hours”.

“We are living in the post-pandemic world now where if you are working from home your managers expect you to be available at all times.” This is another example of how the laws governing the rights of Indian workers—drawn up 76 years ago—fail to address modern labour practices. And successive governments have lacked the political will to address the issue.

Can the laws be challenged?

On the question of whether MNC workers can petition the court for overtime pay, Suresh Chandra Srivastava, a lawyer and professor of labour law, says there has been no direct precedence. He mentions a case where the Supreme Court of India ruled in 2023 that government employees are not entitled to claim double overtime allowance under the Factories Act.

The court clarified that the Act specifically applies to workers in factories, not government employees, who are overseen by different rules and regulations. As a result, the demand for double overtime pay by government employees was rejected. This apex court ruling illustrates the limitations of current labour laws. Being in the same legal grey area, MNC workers will run into the same hurdle as the government employees mentioned earlier.

But Sophy K.J., Associate Professor of law and director of the Centre for Labour Law Research and Advocacy at the National Law University in Delhi, referred to a 2022 ruling by a labour court in Chennai. The court ruled that an IT analyst could be classified as a “workman” under the Industrial Disputes Act, rejecting an Indian software MNC’s claim that the employee did not qualify because of his supervisory role.

Sophy said “if we follow that route of jurisprudence” where the nature of the work is considered rather than the salary, software engineers (except those in supervisory and managerial roles) might be able to raise industrial disputes under the Industrial Disputes Act, including issues related to working hours and allowances.

From economic liberalisation to now

Experts look at the years following India’s economic liberalisation in 1991, when a booming private sector created a demand for labour. However, this growth came with lax government oversight, allowing private companies to exploit loopholes in archaic laws, they say.

Sophy K.J. pointed out that, historically, trade unions safeguarded against the exploitation of labour. But post-liberalisation practices like “contractualisation and outsourcing became the norm”, she said. Contract workers could not form or join unions without the immediate threat of losing their jobs, unlike regular workers.

“This shift has led to a weakening of trade unionisation since the 1990s,” she underlined. “In some cases, small, independent unions have emerged in the private sector, but without support from larger, established unions, these smaller unions are often bought out by employers and rendered ineffective.” This has contributed to the eventual reduction in workers’ rights and entitlements, trickling down to the white-collar workers of today who have almost no union representation.

What does the industry say?

Prasheel Pardhe is a senior HR professional with 25 years of experience. Pardhe, currently working in the IT sector, says there is no overtime pay offered by companies in India because these companies offer “market-competitive compensation”.

“To retain good and skilled talents in the IT industry, there is always market-competitive compensation that companies pay now in India,” he said. Moreover, employees are given compensatory time off for extra hours and also performance bonuses for their efforts.

Pardhe also touches upon the topic of how a lot of Indian workers say they did not receive overtime payments while working in India but did so after moving abroad. He lists the examples of Germany, some states in the US, where all employees are regulated.

“Their compensation structures are less competitive and more compliance-driven,” he said. So, in this kind of a scenario, the government can have a compliance rule that mandates overtime payment, according to Pardhe.

A worker will work

In the end, in the absence of strong regulations protecting their rights, it is people like Rohan, Aditi, and Isha who continue to struggle to find some work-life balance.

As Isha says, people take the exhausting work schedules without complaints with the hope of their work being recognized or there being a payoff in the future. “Eventually they just switch jobs when neither of these happen and go back to the grind—hoping this time it works out.”

*Names changed on request.