Karnataka's proposed work hour extension draws IT sector concern

The Karnataka government's proposal to amend the Karnataka Shops and Commercial Establishments Act, 1961, has sparked significant concern across the state's large IT and IT-enabled services (IT/ITeS) sector. The proposed changes would extend daily working hours and increase overtime limits, raising questions about employee well-being and the future of work-life balance in the technology hub.

As of 24 June 2025, the Karnataka Labour Minister, Santosh Lad, has stated that he does not support the proposal in its current form. He clarified that the idea to extend daily working hours from nine to ten, while maintaining the weekly cap at 48 hours, originated from the central government. Lad indicated that a final decision would follow discussions with all stakeholders, including unions.

Details of the proposal

The draft amendment, circulated by the state's Labour Department, includes several key changes:

• Daily Work Hours: The current daily limit of 9 hours could increase to 10 hours.
• Overtime: The maximum daily work hours, including overtime, could extend to 12 hours.
• Quarterly Overtime Cap: The limit on overtime hours over three months could increase significantly from 50 to 144 hours.

The state government maintains that the weekly working hour limit of 48 hours would remain unchanged. Labour officials suggest these reforms aim to provide businesses with operational flexibility and align state regulations with national labour policies, potentially attracting more investment. Similar amendments have been adopted by states like Andhra Pradesh, Gujarat, Maharashtra, Uttar Pradesh, and Uttarakhand. Additionally, the proposal includes provisions to exempt establishments with fewer than 10 employees from certain record-keeping requirements, aiming to ease business compliance for smaller enterprises.

Concerns from the IT sector

The Karnataka State IT/ITeS Employees Union (KITU) has vocally opposed the proposal, labeling it "modern-day slavery." Unions argue that legalising 12-hour shifts would normalise excessive workloads and could lead to a two-shift system, potentially reducing one-third of the current IT workforce. They claim that companies often demand long hours without adequate overtime compensation, and this amendment might provide a legal cover for such practices.

Employees express fears of increased burnout, stress, and mental health issues. Reports indicate that a significant percentage of young corporate workers already experience anxiety. Health experts point to research linking long working hours to increased risks of depression, cardiovascular diseases, sleep disorders, and reduced productivity beyond a certain point. Working 12 hours, coupled with Bengaluru's heavy traffic, could mean 15-16 hours away from home, severely impacting personal and family life.

Past attempts to increase working hours in Karnataka's IT sector have faced strong opposition. In 2024, a proposal to allow 14-hour workdays was withdrawn after widespread protests. While some startup employees say they already work long hours, unions contend that formalising these conditions without addressing compensation or work-life balance problems is a step backward.

The labour department asserts that the changes aim to provide flexibility in a sector that operates around the clock. However, IT employees and union leaders remain skeptical, emphasizing that legal caps on weekly hours do not stop companies from pushing for longer daily shifts without fair compensation or consideration for employee well-being.