Working Conditions in India

1. Minimum Working Conditions

The FA Act states that for industrial establishments where 250 (two hundred and fifty) or more workmen are employed, the employer shall provide for a canteen. Suitable shelters or rest rooms, lunchrooms with provision of drinking water are to be provided under the FA Act wherein 150 (hundred and fifty) workmen are employed. The factories wherein thirty (30) or more women workers are ordinarily employed, nurseries should be provided and maintained for the use of children under the age of 6 (six) years. The factories should have wholesome drinking water, toilets, washing places and spittoons, lighting in the workrooms, painting of the factory walls, doors and windows, cleaning of floors, effective removal of dirt and refuse and they must be kept clean and free from effluvia arising from any drain or other nuisance. Further, the factories should have temperature control mechanism, adequate ventilation, prevention of inhalation and accumulation of dust and fumes, regulation of artificial humidification, and prevention of overcrowding. The FA Act envisages certain precautions to be taken against explosives, inflammable gases, dangerous fumes and gases, fire and use of portable electric light.

Under the CLRA Act, the contractor is required to provide facilities which include rest rooms, child nursery facilities, canteens, wholesome drinking water, toilets, washing facilities, and first aid. It is pertinent to note here that the onus is on the principal employer to provide the aforementioned facilities if the contractor does not provide the same.

2. Salary

Although the words “wages” and “salary” are commonly used interchangeably, there is a subtle yet discernible difference between the two. “Wages” is a concept that is primarily used under labour/employment laws and determines employers’ and employee’s rights and obligations therein; whereas “Salary” is a concept that is used under income tax law to denote the total taxable income received by a person from his employer. Under several labour/employment legislations, “wages” excludes allowances and cash-based benefits, but under income tax law, “salary” as defined under Section 17(1) of the Income Tax Act, 1961 (the “ITA Act”) includes all forms of cash remuneration received from an employer.

“Basic Wages” means all payments which are earned by an employee in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include: (i) the cash value of any food concession; (ii) any dearness allowance that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living, house-rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment; and (iii) any presents made by the employer.

3. Maximum Working Week

Pursuant to the FA Act and certain S&E Acts, no employee shall be required to work in any establishment for more than 9 (nine) hours in a day or more than 48 (forty eight) hours in a week. However, certain states allow maximum working hours as only eight (8) hours in a day.

4. Overtime

Pursuant to the FA Act and certain S&E Acts, any work performed over 9 (nine) hours a day or 48 (forty eight) hours a week is considered “overtime”. An employee working “overtime” becomes entitled to wages at the rate of twice his/her ordinary rate of wages or compensatory time off.

5. Holidays

Across India, there are 4 (four) days designated as “national holidays”, on which all establishments must provide a holiday to all employees, namely (i) Indian Republic Day (26th January); (ii) May Day (1st May); (iii) Indian Independence Day (15th August); and (iv) birth anniversary of Mahatma Gandhi (2nd October). In addition to these, every employee would be entitled to at least 5 (five) holidays every year declared by the respective state government as public holidays, which shall be exclusive of the national holidays described above.

For more information on these articles or any other issues involving labour and employment matters in India, please contact Avik Biswas, Partner at IndusLaw ( at
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