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Labour Law

​​Indian Labour Laws And Its Impact On IT-ITES Industry

India's labor law system is centered on employment as well as other matters relating to labor and labor standards in India. Any type of employment-related disagreement between an employee's employer or another employee, as well as between employees themselves, is covered by the law's application. Let’s get deep!

Due to the Indian IT businesses’ exemption from the Industrial Employment Standing Orders Act, of 1946, Information Technology and related endeavors have been exempted from this basic legal framework of ​​indian labour laws And its impact. But it wasn’t until recently that the government made the decision to broaden the scope of the labor laws so as to include initiatives and businesses based on the Information Technology Act. It is subject to a wide range of operating conditions, obligations, duties, and other general standards of conduct due to the labor law regime’s regulation of it. 

It is typically assumed that they are exempt because of their prior exemption, although this is not the case. Nevertheless, there are several labor law statutes that do not apply (Industrial Disputes Act, 1947 and Factories Act, 1946). However, the proviso of exemption is negligible compared to the general rule of applicability. The laws that will be applicable to the IT industries and their personnel are summarized below:

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  • The Trade Unions Act, 1926: The underlying theory of the Trade Union Act, 1 926 is to facilitate the representation of the workmen or employees via a platform or the coming together of all other employees in a Union. It originates by virtue of Article 19(1)(c) of the Constitution of India, which entitles all citizens to have a fundamental right to form associations. This has applicability to the IT Employees as well and is thus entitled to form unions and operate as an association.
  • The Payment of Gratuity Act, 1936: Payment of Gratuity Act, 1936 provides for the payment of gratuity to all employees, post-service. This statute is based on the equitable principle which is in favor of both the employer and the employee. Gratuity entitlement under this Act is also extended to IT employees if they fulfill the pre-conditions of continuous employment and other necessities.
  • The Minimum Wages Act, 1948: This Act applies to all workmen and ensures a basic minimum wage, fixed by the Central or State Government, as per the profile of the job. It essentially extends its scope and application to commercial establishments and the employees present therein. The periods of recession hits the IT industries to an extent that the employers drop current recruits, and cuts down salaries, and other incentives. The Central legislation as this one ensures that there is a basic minimum support to the employees in financially difficult times like these.
  • The Sexual Harassment of Women (Prevention, Prohibition and Redressal) Act, 2013: Solidifying from the apex court’s judgments in the case of Vishakha State of Rajasthan, this legislation was passed to maintain work ethics in all industries pertaining to the treatment of women. It provides for the safeguard mechanisms which must be in place in order to ensure a safe working atmosphere for the women employees.

A blanket exemption on IT industries from the labour regime in India allowed them to hire cheap labour, violate work ethics, and not maintain standard conditions of labour. However, a worker’s fundamental right cannot be infringed. After the application of labour legislation and the removal of blanket exemption, the regime of IT Industries has become more stringent. The only exemption which can be applied to IT industries or other industries for that matter is done on a case-to-case basis.

The industrial or labour laws of the country are also applicable to the IT Industries, but not all the laws. The IT industries have been exempted from many labour laws which are applicable to other industries. The IT industries try their level best to avoid the obligations which are imposed on them by the law, but no one is above the law and the fundamental rights of a worker or an employee cannot be violated in any case by anyone.


The country’s labor and industrial regulations also apply to the IT industries, though not all of them. Many labor laws that apply to other businesses but are not to the IT industries have been exempted. The legal duties placed on the IT sectors are avoided to the best of their ability, but no one is above the law, and no one has the authority to abuse a worker’s or employee’s fundamental rights under any circumstances. If you need more clarification on Indian Labour law, feel free to connect with Vakilsearch, India’s number one leading legal service provider.


Do labour laws apply to IT companies in India?

Yes, labour laws apply to IT companies in India. While certain provisions may differ based on the nature of work, IT professionals are entitled to legal protections concerning working conditions, wages, and other employment aspects.

What are the 4 labour laws in India?

Four key labour laws in India include the Industrial Disputes Act, Minimum Wages Act, Employee Provident Fund Act, and Factories Act. These legislations collectively safeguard the rights and interests of workers across various industries.

What is the new labour law in India 2023?

Anticipated to usher in positive transformations, the upcoming labour Code in India for 2022-2023 is poised to impact the existing salary framework and ancillary benefits. This shift is likely to result in a rise in overall salary disbursements, coupled with increased contributions towards Provident Fund (PF) and pension schemes.

What are the labour laws for private companies working hours in India?

Private companies in India must adhere to labour laws regulating working hours. The specifics may vary, but generally, the laws prescribe a standard working week, limit daily working hours, and provide guidelines for overtime pay.

Is an IT professional a workman?

The classification of an IT professional as a workman depends on the nature of their work and the criteria outlined in labour laws. If the job falls within the definition of a workman as per the relevant statutes, the individual is entitled to protections under labour laws.

Is IT legal to work in 2 IT companies in India?

Generally, working in two IT companies simultaneously is legal in India unless employment contracts explicitly prohibit it. However, employees should be mindful of potential conflicts of interest and confidentiality clauses in their contracts.

Is it legal to work 7 days a week without a day off in India?

Working seven days a week without a day off is not in compliance with labour laws in India. Regulations typically mandate a weekly day of rest to ensure the well-being of employees and to promote a healthy work-life balance.

What are the working hours for IT in India?

Working hours for IT professionals in India vary but typically adhere to the standard 8 hours a day and 40 hours a week. Overtime may apply, subject to legal provisions and employment contracts.

Is working 10 hours a day legal in India?

Working 10 hours a day may be legal in India, but it depends on the nature of the job, industry, and compliance with labour laws. Overtime regulations and specific industry standards should be considered to ensure legality and fair treatment of employees.

Is working 12 hours a day legal in India?

Working 12 hours a day is generally not in compliance with standard labour laws in India. Legal working hours are typically limited to 8 hours a day and 48 hours a week, with overtime pay applicable for additional hours. Specific industry regulations may vary.

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