New Labour Rules may pave way for four-day workweek in select sectors

The Centre's final rules under the four Labour Codes allow flexible distribution of 48 weekly work hours, opening scope for four-day workweeks in some industries

The rules notified by the government on Friday under the four labour codes may pave the way for a four-day workweek in certain sectors, as they cap weekly working hours at 48 while allowing daily flexibility for employers and workers.

 

“The number of hours of work which shall constitute a normal working day for an employee whose wage period is other than on a daily basis shall be so fixed that the total number of weekly working hours shall not exceed 48 hours,” the Code on Wages (Central) Rules says.

 

While this may allow employers longer daily working hours (up to 12 hours) without triggering overtime wages — which is now twice the normal rate — it may also enable employees to get up to three rest days per week. However, for daily wage workers, the number of hours in a normal working day remains eight hours, beyond which overtime rates will apply.

   

“With normal working hours prescribed at 48 hours a week under the OSHWC (Occupational Safety, Health, and Working Conditions) Rules, employers do have the flexibility to structure these hours across fewer days, enabling a possible four-day workweek where the overall weekly threshold is not exceeded. This may work for shift-based or project-driven sectors such as manufacturing, infrastructure, and certain information technology (IT)/IT-enabled services or shared services operations,” said Puneet Gupta, partner, EY India.

 

However, sectors with client-driven timelines and real-time delivery expectations may find this difficult to implement in practice, making the constraint more operational than regulatory, Gupta added.

 

The Centre on Friday notified the final rules under all four labour codes, completing the rule-making process for the Industrial Relations Code, 2020; the Code on Wages, 2019; the Code on Social Security, 2020; and the Occupational Safety, Health and Working Conditions Code, 2020. The move came through more than 30 Gazette notifications issued nearly six years after Parliament cleared the legislation.

 

The final rules follow draft versions published in December 2025, with stakeholders invited to submit comments. The government said the suggestions received were considered before finalisation. The rules were issued over four months after the draft phase, even though the consultation period ended in February.

 

The final framework introduces several provisions that were either absent or less detailed in the December draft, including mandatory appointment letters, clearer overtime provisions, and contributions to a worker reskilling fund.

 

However, the final rules mark a significant departure from the draft version released in December 2025. While the draft had explicitly laid down criteria for fixing minimum wages — including norms related to calorie intake, clothing, housing rent, fuel expenditure, and education and medical needs of a standard working-class family — the notified rules remove these provisions. Instead, they state that the criteria will be specified separately by the central government through a “special or general order”.

 

The final rules have also omitted a separate provision on wage fixation norms and the proposed technical committee for skill categorisation, shifting greater discretion to the Centre in determining wage-setting methodology.

 

Alay Razvi, managing partner at Accord Juris, said the final rules tighten the definition of “wages” by explicitly listing excluded components, which could affect the calculation of gratuity, provident fund, and overtime payments. He added that the rules also clarify provisions relating to fixed-term employees, gratuity eligibility after one year of service, digital compliance requirements, and integration with a unified employer portal.

 

The Wage Code rules retain the 48-hour workweek while laying down provisions relating to weekly rest days and overtime payments for work performed on rest days.

 

Hardeep Sachdeva, senior partner at AZB & Partners, said the rules would increase compliance obligations for businesses, as companies would need to formalise human resource practices, issue appointment letters, track working hours, and provide mandated health benefits.

 

“This will increase costs, particularly through overtime payments and reskilling contributions. At the same time, the uniformity of wage and social security norms across jurisdictions reduces fragmentation, offering greater clarity and predictability,” he added.

 

The Social Security Code rules introduce procedural norms around registration of gig and platform workers, Employees’ State Insurance contributions, nomination processes, and crèche facilities, alongside a stronger push towards digital compliance. The final rules also raise the monthly income ceiling for dependent parents from ₹9,000 to ₹14,000.