In a move that has ignited intense discussions and drawn both praise and criticism, the Karnataka government recently proposed an extension of working hours for IT and IT-enabled services (IT/ITes) professionals in the state.
The objective is to boost Karnataka’s share of Global Capability Centres (GCCs) within India from the current 45 percent to an ambitious 50 percent.
Karnataka Proposal: Key Highlights
Working Hours Adjustment: While the basic working hours remain unchanged at 9 hours per day, the proposed amendment allows for an additional 3 hours of overtime, bringing the total daily work hours to 12.
Crucially, the maximum allowable overtime hours are capped at 125 over a three-month period. This limitation aims to ensure that extended shifts are infrequent and manageable for employees.
Policy Precedents and Attractiveness for IT Investments: State government officials assert that the amendment aligns with the Government of India’s Model Shops and Establishment Bill.
Notably, similar provisions already exist in states like Gujarat, Telangana, and Odisha, making these states more attractive for IT investments.
The proposed amendment aims to prevent companies from relocating to other states with more flexible regulations, thereby bolstering Karnataka’s GCC share.
Flexible Overtime and Official Notifications from Karnataka
Overtime extension will occur only through official notifications for specific companies that apply for it. The Labour Department will conduct thorough checks before granting such extensions.
Gujarat and Telangana have already eliminated the applicability of sections that prescribe working hours and overtime limits for IT/ITes companies.
Odisha’s Approach: Odisha, while trailing behind Gujarat and Telangana, has its own regulations. The total number of hours worked in Odisha, including overtime, shall not exceed 12 hours on any given day.
Overtime in Odisha is capped at 144 hours, which exceeds the proposed Karnataka bill.
Global Capability Centres (GCCs) Policy
Karnataka aims to become the first state in India to introduce a dedicated GCC policy.
The ambitious goal is to attract over 15 percent of the GCCs operated by the world’s top 2,000 companies by 2030. This will potentially generate more than 1 million jobs.
A GCC is essentially an offshore unit established by a company in a foreign country to handle IT and related business functions.
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The Factories (Karnataka Amendment) Bill 2023
In 2023, the Karnataka assembly passed the Factories (Karnataka Amendment) Bill. This bill increased the maximum working hours for workers to 12 hours a day, with a 48-hour weekly limit.
Permissible overtime hours per quarter were raised from 75 to 145 hours. Notably, the bill allowed women to work night shifts (7 pm to 6 am) with their written consent, ensuring safety measures were in place.
Reports suggest that US-based Apple and Taiwanese electronics manufacturer Foxconn lobbied for the increase in working hours to reduce their reliance on China.
The debate over this proposal continues, with stakeholders weighing the economic gains against potential strain on employee health and work-life balance.
As Karnataka positions itself as a hub for IT and GCCs, the delicate balance between industry growth and employee welfare remains at the forefront of discussions.
Report credits: Moneycontrol
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