India Overtime Regulations under OSH Code 2020: What Employers Must Know

Overtime regulations in India are foundational to the country’s labor law regime, serving to protect workers’ rights and promote fair workplace practices. Both employers and employees must understand these provisions to ensure legal compliance and a healthy work environment.

With the rollout of India’s four new labor codes, employers nationwide must reassess their overtime policies and align internal guidelines with the updated statutory requirements.

This article offers a clear, detailed overview of the key considerations employers and employees should keep in mind when calculating and processing overtime wage payments.

TO KNOW MORE: How India’s New OSH Code Reshapes Labor Compliance

Key law governing overtime in India

From November 21, 2025, India’s overtime regulation will be governed under the Occupational Safety, Health and Working Conditions (OSH) Code 2020, subsuming 13 older labor laws such as the following:

• The Factories Act, 1948
• The Contract Labor (Regulation and Abolition) Act, 1970
• The Mines Act, 1952
• The Dock Workers (Safety, Health and Welfare) Act, 1986
• The Building & Other Construction Workers (Regulation of Employment and Conditions of Service) Act, 1996
• The Plantations Labor Act, 1951
• The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979
• The Working Journalist and other News Paper Employees (Conditions of Service and Miscellaneous Provision) Act, 1955
• The Working Journalist (Fixation of Rates of Wages) Act, 1958
• The Cine Workers and Cinema Theatre Workers Act, 1981
• The Motor Transport Workers Act, 1961
• The Sales Promotion Employees (Conditions of Service) Act, 1976
• The Beedi and Cigar Workers (Conditions of Employment) Act, 1966

Under OSH Code, Section 27 lays down uniform rules for determining overtime entitlements for workers across establishments. Further, the power to fix the time of interval and spread over time will be determined by respective state government.

Eligibility for overtime wages

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If a worker performs duties for more than 8 hours in a day or 48 hours in a week, they are entitled to overtime pay.

Overtime must be compensated at twice the worker’s ordinary rate of wages, and the payment should be released within the relevant wage period.

How overtime hours are calculated (rounding rules)

The OSH Code standardizes how extra minutes are converted into payable overtime:

1. Extra time between 15 and 30 minutes → counted as 30 minutes
2. Extra time beyond 30 minutes → counted as 1 full hour

This ensures consistent and transparent computation across all establishments.

Example: If a worker stays back 38 minutes, it will be rounded up to 1 hour of overtime.

Calculating daily wages for overtime

Before calculating overtime, the employer must determine the worker’s daily wage.

For monthly-paid workers:

• Daily wage = monthly wage ÷ 26 (the OSH Code treats a month as 26 working days.)

For daily-paid, piece-rate, or other earnings-based workers:

• Use the worker’s actual daily wage or daily earnings.

This daily wage becomes the base for calculating overtime at twice the ordinary rate.

Once the daily wage is known, overtime is calculated using this formula:

Overtime pay = (daily wage ÷ 8 hours) × overtime hours × 2

Where 2 represents the mandatory double wage rate under the OSH Code

Extended spread-over in specific work conditions

In certain sectors, such as factories, docks, mines, and construction, workers may have a spread-over exceeding 12 hours in a day under specific operational needs, including:

• Urgent repair work
• Preparatory or complementary tasks
• Intermittent work with long natural breaks
• Processes requiring continuous operation due to technical reasons
• Production or supply of essential goods
• Work tied to seasonal conditions or natural forces
• Power plant, engine room, or boiler operations
• Machinery breakdown situations
• Loading or unloading of railway wagons, lorries, or trucks
• Exceptional workload requirements
• Any work declared by the Central Government as nationally important

Cap on total overtime

Regardless of the above provisions, a worker cannot be permitted to work more than 125 hours of overtime in any quarter.

How states will regulate overtime payment under the OSH Code

While the OSH Code sets a uniform national standard for overtime wages, mandatory payment at twice the ordinary rate, the actual implementation of overtime rules will continue to vary from state to state. This is because labor is a concurrent subject in India, and states retain the power to specify:

• Daily and weekly working-hour limits
• Permissible overtime hours per day, week, quarter or year
• Industry-specific exemptions or relaxations
• Record-keeping, approvals, and administrative processes

Under Section 27 of the OSH Code, all states must follow the baseline rule. This creates national consistency in how overtime pay is calculated.

However, how much overtime can be performed—and under what conditions—remains state-specific.

States will notify their own rules, meaning this diversity is expected to continue.

States may introduce sector-specific exemptions

As seen in recent years, southern states such as Telangana, Tamil Nadu, and Andhra Pradesh have granted exemptions or relaxed overtime limits for electronics, IT/ITES, export units, and global manufacturing setups.

Under the OSH Code framework, such exemptions can continue as long as the double-wage rule is respected.

States with strong industrial bases, such as Karnataka, Tamil Nadu, Gujarat, Maharashtra, Telangana, and Uttar Pradesh, are expected to:

• Allow extended shifts in select sectors
• Increase quarterly overtime limits
• Permit flexible shift structures (e.g., 4-day workweeks or 12-hour shifts with compensatory offs)
• Strengthen compliance requirements, especially for women working at night

Meanwhile, smaller states and union territories (UTs) often maintain tighter overtime caps.

Source: Working Hours in India, Simpliance.

Overtime-related record-keeping requirements

Under Chapter VI of the OSH Code rules, employers must follow specific documentation and reporting obligations for managing overtime work.

1. Display of work schedule (Section 57)

• Employers must display a notice that includes work periods, including any overtime schedules, on a prominent noticeboard or electronic board.
• This notice must be maintained in Form VII.
• A copy of the notice must also be sent to the Inspector-cum-Facilitator either electronically or by registered post.

2. Registers and records for overtime (Section 58)

Every employer must keep detailed and accurate records of overtime performed by employees. Key requirements include:

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• Overtime register (Form VIII): Employers must maintain a register that includes details of workers, wages, overtime hours worked, and related payments.
  This register should be maintained electronically and kept accessible within the establishment premises.
• Manual records (if maintained), entries must be written clearly in ink. Additionally, the entry should be in English, Hindi, or a language understood by the majority of workers.

• All original reports and registers, including overtime records, must be preserved for one calendar year from the date of the last entry.
  • If the original is lost or damaged, any available true copies must be preserved for the same period.
• Employers must produce overtime-related registers and records, electronically or by registered post, whenever required by the Chief Inspector-cum-Facilitator or authorized officials.

State level adherence of other overtime payment laws

While the OSH Code sets a central framework for overtime payments and working conditions in establishments it covers, it does not fully replace all state-level labor laws, especially the Shops and Establishments Acts, which regulate many workers in shops, commercial establishments, restaurants, and similar sectors.

What this means in practice:

• In sectors and workplaces covered by the OSH Code (like factories, mines, construction, certain industrial establishments), the OSH Code’s overtime rules will apply.
• In many other workplaces, such as retail shops, small businesses, restaurants, and other commercial setups, state-specific Shops and Establishments Acts continue to govern overtime and work conditions, unless and until states amend or align their laws fully with the labor codes.
• Therefore, for many workers, overtime payment rules under state laws will operate alongside (in parallel with) the OSH Code.
• Employers must ensure compliance with both the OSH Code (where applicable) and the relevant state laws that apply to their sector and workforce.

Conclusion

India’s new OSH Code streamlines overtime payment regulations, promoting fairness and clarity for workers and employers alike. However, due to state-level variations and sector-specific rules, businesses must proactively adapt their policies and systems. Staying compliant not only protects against legal risks but also enhances workforce satisfaction and operational efficiency.

(This article was originally published on July 29, 2025. It was updated on December 4, 2025.)

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