Working from home: key Indian employment law considerations for employers

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Veena Gopalakrishnan
AZB & Partners, Bengaluru

Nishanth Ravindran
AZB & Partners, Bengaluru


The first case of Covid-19 in India was reported in January 2020.[1] A lot has changed since then. Aspects of everyday life, to which most people never gave a second thought, have now become important considerations in the fight against this deadly disease. One of the biggest global changes that this pandemic has brought about in the employment context is the shift from having to be present at the workplace every morning and clock out (at a reasonable time, if lucky), to now working from home.

The nature of the virus, the urgent and critical requirement for social distancing and the lockdowns that have been imposed in various countries to curb the spread of this pandemic have forced employers across the world to adopt work-from-home policies. With social distancing becoming an essential, the pandemic has forced traditional employers (who were otherwise sceptical of flexible working models) to allow and adapt to remote working. Organisations such as Google, Facebook, Twitter and Slack have publicly announced that they would be adopting the work from home model (either completely or in a limited manner).[2]

Governments across the world have also been recommending that employers allow their employees to work from home, to the extent this is possible, as this may curb the spread of the virus. They have also, in certain instances, gone to the extent of relaxing laws to allow employees to work from home.

The Indian government, to facilitate organisations enabling their employees to work from home, recently extended certain relaxations that they had previously provided to 'other service providers' (including information technology and information technology enabled services companies) up to 31 December 2020.

Indian employment laws are, however, struggling to keep pace with these rapidly evolving work structures. Many Indian employment laws were drafted at a time when the 'personal computer' was still science fiction and employees primarily worked in the manufacturing or agriculture industries. These laws therefore do not contemplate the modern concept of working from home and the issues and nuances stemming therefrom.

To help ease the already heavy burden on employers, we have highlighted certain Indian employment law issues, of which employers should be mindful when their employees are working from home.

Confidentiality and information security

With employees now working from home, it has become even more important for employers to implement robust and comprehensive confidentiality and information security procedures and process. In many cases, employees rely on standard internet connections or insecure Wi-Fi systems to either connect with their office servers or transmit confidential information. This could significantly expose the employer's confidential and proprietary information to attacks by third parties. In many cases, employees are unaware of the impact that their actions may have on their employers' confidential and proprietary information and the damage that may occur if such information is inadvertently leaked or disclosed. In this regard, callousness on the part of the employees could also result in exposing the employer to damages under Indian data protection laws and cause significant reputational issues. Therefore, it is recommended that employers invest in creating robust confidentiality and information security policies and also in training employees on these policies and on the best practices to be followed.

Productivity monitoring and management

A common concern for employees in the modern workplace has been the struggle to maintain a semblance of separation between work life and personal life. This problem has suddenly been magnified with the shift to working from home. Employers, on the other hand, are now faced with the challenge of ensuring their employees remain productive. Unlike in an office setup, employees who work from home may choose to spread their work across the day, rather than adhere to the regular 9 to 5 schedule. While, on the face of it, this doesn't seem like a big issue, employees working extended hours could expose the employer to claims for overtime. Therefore, it is recommended that employers focus on ensuring that their employees continue to function in a structured manner, in order to ensure productivity when working from home. It is also recommended that employers republish and remind employees about working hours and productivity policies or put in place such policies if they do not already exist.

Overtime working and compensation

The amount of overtime compensation to which employees in India are entitled depends on a number of factors, including the work that the employees are performing, the wages that the employees are earning and the states in India where the employees are located. Working from home has complicated the process of calculation and payment of overtime as employers can no longer have complete visibility into the actual number of hours that employees have worked. Additionally, in many situations employees have gone back to their hometowns and do not work from the same state in which the employer is located. This creates ambiguity regarding which state's overtime law should apply to the employee. To overcome such ambiguity, it is recommended that employers clearly document and publish their overtime policies and practices. This would clarify employees eligibility for overtime.

Discrimination and harassment

Covid-19 struck at a time when it appeared that corporate India was just about getting a handle on issues of discrimination and harassment at the conventional workplace. Working from home has now thrown up a new set of issues and challenges that employers will have to understand and address. While most employers are aware that they have a duty to prevent and punish  the sexual harassment of women at the workplace, very few employers recognise that this obligation would also extend to employees who are working from home. It is therefore important that employers review their anti-harassment and anti-discrimination policies and clarify the extended scope of their policies. It is also recommended that periodic trainings on this subject be conducted for employees who are working form home.

Business infrastructure reimbursement obligations/employee compensation obligations

Various employers across India had previously developed employee compensation structures to ensure that employees were motivated to work. These structures included night working allowances, hardship allowances, travel allowances, meal allowances etc. However, employees are also now required to make some basic investments to be able to work from home in a seamless manner. With employees now working from home many of the allowances in the employee's salary structure have become redundant. It is therefore recommended that employers re-evaluate their compensation structures to rework allowances/heads of remuneration that may have become redundant in the work from home model. This would ensure that employees are not monetarily impacted by working from home.

It appears that working from home is here to stay and may even be the future of certain types of work. Rather than treating this as a temporary measure, employers could consider taking a holistic approach to reviewing their policies and practices and to addressing situations that could arise in a work-from-home model. This could also be an opportunity for organisations to review their human resource policies from a diversity and inclusion perspective, as well as to build in flexibility, effective grievance redressal mechanisms and other tools of inclusion to ensure that this 'new normal' is an improvement on the previous ‘normal’.


[1]Devesh Kumar ‘Half a million Covid cases in India: How we got to where we are’ (The Wire), see https://thewire.in/covid-19-india-timeline

[2]https://edition.cnn.com/2020/05/22/tech/work-from-home-companies/index.html; https://www.forbes.com/sites/zackfriedman/2020/05/08/google-facebook-amazon-work-home/#4580e7baeaea

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