India’s new Occupational Safety, Health and Working Conditions (OSH) Code, 2020 reshapes how establishments manage working hours, overtime, and leave entitlements. By consolidating 13 earlier laws into a unified framework, the Code introduces clearer limits on daily and weekly work hours, standardizes overtime at double wages, and simplifies annual leave eligibility. These reforms aim to protect worker health while offering flexibility for modern work patterns, ensuring compliance across industries nationwide.
1. Daily Work Hour Limit — OSH Code vs Draft Rules
The OSH Code, 2020 clearly states that daily working hours shall not exceed eight hours.
This is the statutory limit.
However, confusion arose because several State Draft Rules proposed:
- 12-hour spread-over, including rest intervals
- 4-day work week models (12 hours × 4 days = 48 hours weekly)
- Extended shifts for urgent repairs or exceptional workload
Important distinction:
- The Code fixes the daily work hour limit at 8 hours.
- Draft Rules only allow a longer “spread-over,” not longer actual working hours.
A 12-hour spread-over means:
The worker may be present at the workplace for up to 12 hours, but cannot work more than 8 hours.
This allows flexibility without compromising worker safety.
2. Weekly Maximum Work Hours & Allowable Exemptions
The OSH Code fixes the weekly working hour limit at 48 hours.
This includes:
- All shifts
- All working days
- Any overtime performed
Exemptions / Flexibility Allowed
Appropriate governments may permit:
- Shift restructuring
- Compressed work weeks
- Compensatory holidays
- Additional hours during emergencies (repairs, seasonal rush, continuous process industries)
But even with exemptions:
- Weekly total cannot exceed 48 hours, unless overtime is paid.
- Worker consent is mandatory for extended hours.
This replaces inconsistent limits under older Factory Acts and Shops & Establishments Acts.
3. Overtime Rate Changes Under the Updated Codes
The OSH Code standardizes overtime across all sectors:
Overtime must be paid at not less than twice the ordinary rate of wages.
Overtime applies when:
- Daily limit (8 hours) is exceeded
- Weekly limit (48 hours) is exceeded
What counts as “ordinary wages”?
Ordinary wages =
Basic + DA + Retaining Allowance
(excluding allowances such as HRA, overtime premium, bonus, etc.)
Additional rules
- Overtime requires prior consent of the worker.
- Overtime wages must be paid along with regular wages.
- Records of overtime must be maintained for inspection.
This brings uniformity across industries that previously followed different rates.
4. Leave Accrual Rate & Eligibility Under the OSH Code
The OSH Code simplifies and improves annual leave entitlements.
Eligibility
A worker becomes eligible for annual leave after completing:
180 days of work in a calendar year.
This is a major improvement over the earlier 240-day requirement.
Accrual Rate
Workers earn:
1 day of leave for every 20 days worked
Additional Provisions
- Unused leave can be carried forwardsubject to limits prescribed by the appropriate government.
- Leave can be encashed upon separationincluding resignation, dismissal, discharge, or superannuation.
- The reduced eligibility threshold (180 days vs. earlier 240 days) significantly benefits contract, seasonal, and migrant workers, who previously struggled to qualify for annual leave.
This enhances financial security and ensures fair rest periods.
Conclusion: A Balanced Framework for Modern Workplaces
The OSH Code, 2020 modernizes India’s labour framework by protecting worker health while enabling flexible scheduling models. With clear limits on daily and weekly hours, standardized overtime at double wages, and simplified leave eligibility, the Code ensures fairness and consistency across industries. Employers must now align their shift patterns, payroll systems, and HR policies with these updated requirements to remain compliant and support a healthier, more productive workforce.
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Disclaimer – This blog post is a general guide. It should not be considered legal advice. Consult a legal professional for more details.