India’s archaic labor laws allow firms to exploit workers

by Abbas Adil

Shafaqna India: Rohan* begins his workday, like most mornings. Employed by a British multinational, his day is filled with phone calls to clients and stakeholders across different time zones, with brief breaks in between. His workday doesn’t end until 9:30 p.m., totaling a grueling 14 hours.

In another Indian city, Aditi* starts her day at 7:30 a.m. by checking her work emails. Officially, her workday begins at 9 a.m. and stretches until 11 p.m., five days a week. She works for a major U.S. consulting firm and describes the long hours as leaving her “tired and anxious,” often staying up late to carve out some personal time.

“I can’t imagine how people manage marriages, children, and elder care alongside these long working hours,” she said.

Rohan and Aditi share a common experience: despite their extended hours at multinational corporations (MNCs), they receive no compensation for overtime.

Their situations highlight a wider issue of exploitative work practices in India. Amit K., who has spent 17 years at a London-based company, manages a team with members in India and the Philippines. He notes that while Filipino employees receive overtime pay, India-based employees do not, regardless of how many hours they work.

**How MNCs Circumvent Overtime Laws**

In India, many private sector white-collar workers report working 12-14 hour days regularly. The Factories Act of 1948 mandates double pay for work beyond 8-9 hours a day or 48 hours a week, but this law only applies to “factory workers” or “workers.” Since employees like Rohan and Aditi are not classified as “factory workers,” they are not entitled to overtime compensation.

Mahesh Godbole, an HR professional with nearly 40 years of experience, explains, “In office settings, companies bypass overtime laws by categorizing employees as ‘officers’ or ‘executives,’ for whom these laws do not apply, creating a legal grey area.”

Efforts to contact companies like Meta, Apple, Amazon, Google, Ola, and KPMG for comment on their overtime policies in India were unsuccessful.

**Outdated Laws and the Challenges Ahead**

The shift to remote work has further blurred the lines between professional and personal time in India, making it difficult for MNC employees to disconnect. “For companies, the idea of work-life balance is a marketing gimmick,” says Isha*, an employee at an Indian multinational conglomerate who regularly works extended hours.

The current labor laws, created 76 years ago, fail to address these modern labor practices, and successive governments have lacked the political will to update them.

**Legal Pathways and Potential for Change**

Suresh Chandra Srivastava, a labor law professor, notes that there has been no direct precedent for MNC workers petitioning for overtime pay. A 2022 ruling by a labor court in Chennai, however, recognized an IT analyst as a “workman” under the Industrial Disputes Act, potentially opening the door for similar claims by other white-collar workers.

**Impact of Economic Liberalization on Labor Rights**

Following India’s economic liberalization in 1991, a booming private sector and weak government oversight allowed companies to exploit loopholes in outdated labor laws. Practices like “contractualization and outsourcing” weakened trade unions and reduced workers’ rights and entitlements.

**Industry Perspective**

Prasheel Pardhe, a senior HR professional in the IT sector, argues that companies in India do not offer overtime pay because they provide “market-competitive compensation,” including compensatory time off and performance bonuses. He contrasts this with countries like Germany and some U.S. states, where compensation is more compliance-driven.

**Conclusion: The Ongoing Struggle for Work-Life Balance**

In the absence of strong regulations protecting their rights, workers like Rohan, Aditi, and Isha continue to endure exhausting schedules, hoping for recognition or a future payoff. As Isha puts it, many workers simply change jobs when neither happens, only to repeat the cycle.

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