Labour Codes for a 200–1000 Worker Plant: Shifts, Overtime, Fixed-Term and Standing Orders

Since 21 November 2025, a factory's working hours, overtime and employment terms come from the four Labour Codes. The Code caps a worker at 8 hours a day and needs consent for overtime, which is paid at twice the ordinary wage. For a plant of 200–1000 workers, the real decisions sit at two headcount lines (50 contract workers and 300 workers) and in your state's rules, which still set the quarterly overtime ceiling.

By the Mama Editorial Team. This guide quotes the Code texts, the Central Rules of 8 May 2026 and the Government's press release. It is not legal advice; confirm your state's position with labour counsel before changing a shift pattern.

Key takeaways

• The OSH Code, s.25 caps work at 8 hours a day. The Central OSH Rules use a 48-hour week; your state's rules set intervals and spread-over.
• Overtime needs the worker's consent. It is paid at twice the rate of wages, counted daily or weekly, whichever favours the worker (OSH Code, s.27). The base is "wages" as the Codes define it, which is not simply gross CTC.
• The quarterly overtime ceiling is set by the state. The Central Rules use 144 hours a quarter, but they don't bind an ordinary private factory.
• A fixed-term worker must get the same hours, wages and benefits as a permanent worker doing similar work, and becomes gratuity-eligible after one year (IR Code, s.2(o)), paid pro rata under SS Code s.53.
• Standing orders apply at 300+ workers on any day of the preceding 12 months; layoff and closure permission at 300 on average.
• Cameras can't record consent, wages or contracts; they can show whether overtime hours turned into output.

First, whose rules apply to your factory

The four Codes took effect on 21 November 2025. The Factories Act, 1948 and the Contract Labour Act, 1970 were repealed by s.143(1) of the OSH Code. The Centre then finalised its rules on 8 May 2026, including the OSH (Central) Rules, G.S.R. 345(E).

The catch most summaries miss: for a factory, the "appropriate Government" under the OSH Code is the State (s.2(1)(d)). The Central Rules govern central-sphere establishments such as CPSUs, mines and ports, not a private plant in Ludhiana or Hosur. Where your state hasn't finalised its rules, s.143(3) keeps the old state factory rules and notifications alive to the extent they don't contradict the Code.

State progress has been uneven. According to a February 2026 guide by the law firm King Stubb & Kasiva, Gujarat then had final rules under all four Codes and Karnataka under two, while Uttar Pradesh and Madhya Pradesh were still at draft stage. That is the firm's snapshot, not a gazette check by us, and it may be out of date. Below, the Central Rules serve as a reference text, not figures you are bound by. For camera obligations, see what replaced the Factories Act.

Shift hours: what the Code fixes and what the state fixes

Fixed by the Code itself:

• 8 hours a day (s.25(1)(a)).
• No more than 6 days a week (s.26), with compensatory holidays where an exemption costs a worker a weekly holiday.
• No overlapping relays doing the same work at the same time, unless exempted (s.29).
• Shifts past midnight. Hours after midnight count towards the previous day; the weekly holiday is 24 consecutive hours from the shift's end (s.28).
• Appointment letters. Every employee gets one (s.6(1)(f)).

Left to the appropriate Government:

• Intervals and spread-over. Under s.25(1)(b) these "may be notified by the appropriate Government".
• The weekly ceiling. The Code text doesn't contain one; the Central Rules set "not more than forty eight hours in a week" (r.64). Check your state's figure.

You may have read that the Codes allow a 12-hour day. That comes from the PIB release, whose bullets for beedi and mine workers say hours are "capped at 8 -12 hours per day, 48 hours per week". The 12-hour figure is PIB's framing; it doesn't appear in the Code or the Central Rules. Some states have notified longer-day options within the 48-hour week, but we couldn't verify current texts. Don't roster a four-day, 12-hour pattern until counsel shows you your state's notification that permits it.

Overtime: consent, rate and the quarterly ceiling

Section 27 of the OSH Code contains three rules:

1. Overtime is paid "at the rate of twice the rate of wages". The Code on Wages, s.14 sets the floor at "not less than twice the normal rate of wages".
2. Overtime is calculated daily or weekly, "whichever is more favourable to such worker".
3. The employer can require overtime only "subject to the consent of such worker". The appropriate Government may also prescribe a cap on total overtime hours.

What "wages" means. Under s.2(y) of the Code on Wages (mirrored in OSH Code s.2(1)(zzj)), wages are basic pay, DA and any retaining allowance; HRA, conveyance and overtime allowance are excluded. First catch: if the excluded items exceed one-half of total remuneration, the excess is added back. Suppose gross is ₹22,000 and basic plus DA is ₹10,000. The excluded ₹12,000 is ₹1,000 over half, so the base becomes ₹11,000. Second catch: a further proviso says that "for the purpose of payment of wages", conveyance, HRA, award remuneration and overtime allowance "shall be taken for computation of wages". Whether that pulls HRA and conveyance into the overtime base is unsettled; have your payroll adviser confirm the reading.

How the Central Rules calculate it. Rule 69 sets out the method:

• Overtime starts after 8 hours a day for daily-rated workers and after 48 hours a week for others.
• It is paid at the end of the wage period.
• 15 to 30 minutes counts as half an hour. More than 30 minutes counts as an hour.
• For monthly-paid workers, the daily rate is 1/26 of the monthly wage.

Rule 69 also says no worker "shall be allowed to work overtime exceeding one hundred forty-four hours in any quarter". Two caveats: the proviso sits inside a sub-rule about dock, mine and construction work, and it binds central-sphere establishments only. Your state sets your ceiling; check it before you plan a peak season.

A ₹ worked example: overtime or fixed-term hires for a festive peak

Assume:

• A 400-worker plant needs 5,200 extra labour-hours a month for three months.
• The overtime base (basic plus DA) is ₹15,000 a month per worker, an illustrative figure, not a state minimum wage.
• Overtime is calculated on the Rule 69 method as a reference.

The overtime route has two problems. Cost: it doubles the wage bill for the same hours. The ceiling: 2 hours × 26 days × 3 months is 156 hours a quarter, which overshoots 144, the Central reference figure. If your state's ceiling is similar, Route A isn't lawful as planned; cut it to under 1.85 hours a day (144 ÷ 78 days) or spread it across more workers.

Route B isn't free either: full parity, statutory contributions, slower first weeks, and gratuity if anyone serves a year.

Often the answer is a mix; run your numbers with the overtime cost calculator.

Fixed-term employment, read carefully

The IR Code, s.2(o) defines fixed-term employment as engagement "on the basis of a written contract of employment for a fixed period". It comes with three conditions:

• (a) Parity. Hours, wages, allowances and other benefits can't be less than those of a permanent worker doing the same or similar work.
• (b) Proportionate statutory benefits. The worker gets all statutory benefits in proportion to service, even if they don't reach the usual qualifying period.
• (c) Gratuity after one year of service under the contract. The PIB release frames this as "gratuity eligibility after just one year, instead of five".

The Code on Social Security, s.53 fills in the payment side. Its second proviso waives the five-year requirement on "expiration of fixed term employment", and a later proviso says fixed-term gratuity is paid "on pro rata basis". So budget roughly 15 days' wages per year of service, pro rata, for anyone who completes a year.

Under s.2(zh)(iii)–(iv), retrenchment excludes non-renewal of a contract on expiry and completion of a fixed-term tenure. So fixed-term work suits seasonal peaks and new lines, but it isn't a cheaper grade of labour, and repeated renewals for permanent work invite challenge.

The headcount lines that change your obligations

A busy month of temporary hiring can push a 250–350 person plant over 300, because s.28 counts "any day".

Standing orders. The Model Standing Orders, 2026 (S.O. 2312(E)) were notified on 8 May 2026. Schedule B covers manufacturing. Under IR Code s.29(2), the model orders are deemed adopted until your own orders are certified. Section 30 asked employers to prepare drafts within six months of commencement, after consulting the unions. If you adopt the model orders, s.30(3) deems them certified, and you must inform the certifying officer.

Schedule B records attendance by ID card, biometrics "or any other system", treats habitual late attendance as misconduct and caps casual leave at 10 days a year. Any wage deduction still has to go through the Code on Wages. Late-coming deductions must be proportional to the time missed, and total deductions can't exceed 50% of wages. Fines need a pre-approved, displayed list and a hearing, and are capped at 3%.

What cameras can and can't tell you here

What a camera can't do:

• It can't record consent, a contract term or a wage rate; those live in registers and payroll.
• It can't prove an individual's hours for pay purposes. Never use footage to dock pay automatically. Deductions follow the Code on Wages process, not a video clip.
• It can't decide whether you've crossed 300 workers; muster and contractor records do.

If cameras cover work areas, workers need to be told. See the DPDP worker notice template, and read how to tell the shop floor and the union.

What a camera can do is answer the question behind every overtime bill: did those extra hours become output? At aggregate level it shows whether a line ran during the overtime window, whether machines stood idle in paid hours, and whether the shift started on time.

Where Mama fits

Mama reads the cameras a plant already has. Each morning it sends the owner a short note on where machine hours leaked the day before: lines idle during paid overtime, slow starts, stops between shifts. It watches machines and flows, counts people only in aggregate, and never names or ranks anyone. Mama can draw a camera plan for the lines that run overtime. Leave an email or phone in the form below.

FAQ

Does the 144-hour quarterly overtime cap apply to my factory? Not directly. It sits in the Central OSH Rules, r.69; for a private factory, the state sets the ceiling. Confirm your state's current notification with counsel.

Is overtime 2× gross salary? No. It is 2× "wages" under the Code on Wages: basic plus DA plus any retaining allowance, with the excess added back if excluded allowances are more than half of total pay. A second proviso on "payment of wages" may pull HRA and conveyance in, so have payroll confirm the reading.

Can I make overtime compulsory in the appointment letter? Section 27 requires the worker's consent, and a blanket clause may not count as consent for each occasion. Take counsel's view on the form your state expects.

Can I run 12-hour shifts on a four-day week now? Only if your state's rules permit it. The Code caps a day at 8 hours; the 12-hour figure comes from PIB's summary, not the Code text.

We have 280 permanent workers plus 60 contract workers. Do standing orders apply? Possibly. Section 28 counts workers employed on any day of the preceding 12 months; whether contract workers count is a legal question for counsel. If it applies, the model orders may already be deemed adopted.