Karnataka's Labour Department has proposed significant amendments to the Karnataka Shops and Commercial Establishments Act, 1961, potentially increasing the maximum daily working hours from nine to ten. This proposal has sparked considerable debate, especially concerning its impact on the Information Technology (IT) and IT-enabled Services (ITeS) sectors, a major economic force in the state. The proposed changes also aim to increase the maximum permissible overtime from 10 hours to 12 hours per day, and raise the overtime limit from 50 to 144 hours within a three-month period. Furthermore, the government intends to exempt establishments with fewer than 10 employees from the Act's purview.
The Labour Department has justified these proposed amendments by stating that the Union government has directed states to amend their working hours limits, and that other states like Chhattisgarh, Gujarat, Maharashtra, Uttar Pradesh, and Uttarakhand have already implemented similar changes. This push seems to be part of a broader effort to align state labor laws with national models and enhance the ease of doing business.
However, these proposals have met with strong resistance, particularly from the Karnataka State IT/ITeS Employees Union (KITU). KITU has been vocal in its opposition, raising concerns about the potential for increased employee exploitation, burnout, and adverse effects on workers' health and well-being. The union argues that extending working hours could lead companies to shift from three-shift systems to two-shift systems, resulting in job losses for a significant portion of the IT workforce. They also emphasize that the intense work culture prevalent in the IT industry is already causing mental and physical health problems for employees, and longer working hours would only exacerbate the situation.
In March 2025, KITU organized a mass gathering of IT sector employees in Bengaluru to demand stricter enforcement of existing labor laws and a healthier work-life balance. The union has consistently called for the government to investigate actual working hours and overtime payments in the IT sector, alleging that many companies are not compensating employees fairly for overtime work and are expecting them to be available beyond official working hours.
The proposed amendments have ignited a debate about the balance between business needs and employee welfare. Supporters of the changes argue that they will provide greater flexibility for employers, particularly in sectors with fluctuating workloads, and legitimize existing working-hour patterns. They also contend that simplifying procedures and reducing compliance burdens for smaller establishments will enhance the ease of doing business in the state.
Critics, however, fear that the extended working hours and increased overtime limits could lead to widespread exploitation of workers, with companies potentially pressuring employees to work longer hours without adequate compensation or rest. There are also concerns that the exemption for smaller establishments could leave vulnerable workers without the protections afforded by the Act.
The Karnataka government's proposal reflects a complex interplay of economic pressures, labor rights, and the evolving nature of work in the digital age. As discussions continue, it is clear that finding a balance that supports both business growth and the well-being of the workforce will be crucial for the state's future.
