Introduction

Background: Growth of Retail and Hospitality Sectors, Workforce Composition, and Shift Culture

India’s retail and hospitality sectors have witnessed rapid expansion, driven by urbanisation, rising disposable incomes, and increasing tourism. Together, these sectors employ millions of workers across diverse roles — from store associates and warehouse staff in retail to front-of-house, kitchen, and housekeeping staff in hospitality.

A defining feature of these industries is their shift-based workforce. Retail outlets and malls often operate beyond standard office hours, particularly during weekends and festive seasons. Similarly, hotels and restaurants require round-the-clock staffing, including night shifts and rotational duties. As a result, managing working hours, shift patterns, and weekly holidays has been a longstanding operational challenge for employers.

• Workforce composition is highly diverse — full-time, part-time, contractual, and gig-based employees.
• Peak season demands lead to irregular shifts and extended working hours.
• Weekly rest and compensatory leave practices vary significantly across organisations.

Purpose of the Article: Examining Implications of New Labour Codes on Shifts and Weekly Holidays

The introduction of the New Labour Codes, particularly the OSH Code, 2020 and the Code on Wages, 2019, seeks to standardise working hours, rest intervals, and compensation practices across industries. For retail and hospitality, this translates into specific operational adjustments in shifts, weekly holidays, and overtime management.

This article aims to:

• Analyse the practical impact of these codes on employers and employees.
• Highlight the challenges and opportunities in implementing compliant shift schedules.
• Provide sector-specific insights to balance operational needs with employee welfare.

By exploring both legal requirements and operational realities, the discussion offers a roadmap for industry stakeholders navigating the transition under the new regulatory framework.

Current Shift Practices and Weekly Holiday Norms

Typical Working Hours and Roster Patterns in Retail and Hospitality

Retail and hospitality sectors are traditionally shift-driven, designed to ensure continuous service across operating hours. In retail, stores and supermarkets commonly adopt 8–10 hour shifts, with employees rotating between morning, afternoon, and evening schedules. Hospitality establishments — hotels, restaurants, and resorts — operate on a 24/7 cycle, requiring front-desk, housekeeping, kitchen, and maintenance staff to work night shifts and rotational schedules.

These roster patterns are often informal or industry-specific, with considerable variation across regions and employers. While large retail chains and star-rated hotels may follow structured rosters, smaller outlets often rely on ad hoc scheduling, especially during peak sale periods or tourist seasons.

• Retail shifts typically rotate weekly or bi-weekly, depending on store size and staffing.
• Hospitality often uses rotational night and day shifts, with partial overlap to maintain continuous coverage.
• Part-time and gig workers frequently face irregular hours, complicating roster management.

Existing Statutory Weekly Rest and Compensatory Holidays

Prior to the New Labour Codes, weekly rest and compensatory leave obligations were governed by the Factories Act, 1948, Shops and Establishment Acts of respective states, and industry-specific norms. Key features included:

• Minimum one day off per week, with provision for compensatory leave if a weekly holiday is worked.
• Overtime or extra pay required if employees work beyond standard hours on weekly holidays.
• Exceptions applied to continuous operations like hotels, hospitals, and retail during peak festivals.

Despite statutory backing, compliance was often inconsistent, particularly in smaller establishments or for temporary workers. Informal scheduling, last-minute shift changes, and peak-season demands sometimes resulted in extended working hours without proper rest or compensatory leave.

Challenges Posed by Peak Seasons, 24/7 Operations, and Part-Time Work

The nature of retail and hospitality work inherently challenges weekly rest compliance. Peak seasons (e.g., Diwali, Black Friday, summer tourism) require extended hours and additional staffing, which can strain roster planning. Similarly, part-time and contractual employees may not have standard weekly holiday protections under older laws, creating discrepancies in entitlement.

• Maintaining statutory weekly rest during continuous operations is operationally complex.
• Peak-season staffing often leads to unplanned overtime or skipped rest days.
• Part-time and contractual workers face greater uncertainty regarding compensatory leave and overtime pay.

Key Provisions Under the New Labour Codes

OSH Code, 2020: Maximum Hours, Rest Intervals, and Flexible Shift Arrangements

The Occupational Safety, Health and Working Conditions (OSH) Code, 2020 establishes clear rules for working hours, weekly rest, and rest intervals:

• Standard workweek capped at 48 hours, with maximum 9 hours per day for continuous shifts.
• Mandatory intervals of at least half an hour after 5 hours of work.
• Provision for flexible shifts in industries requiring 24/7 operations, provided statutory rest and compensatory measures are met.

These rules formalise and standardise practices, providing legal clarity for both employers and employees in retail and hospitality.

Code on Wages, 2019: Impact on Allowances, Overtime Calculation, and Shift Premiums

The Code on Wages, 2019 complements OSH Code provisions:

• Overtime is payable at double the rate of wages, calculated on the redefined “basic + dearness allowance” structure.
• Certain allowances, previously unregulated, now factor into wage calculations for overtime purposes.
• Shift premiums and compensatory payments for weekly holidays must comply with new minimum standards, providing uniformity across the sector.

State-wise Notifications and Variations Affecting Sector-Specific Operations

While the Codes provide a centralised framework, state notifications determine operational details:

• States may define shift length flexibility, weekly holiday rules, and compensatory leave policies.
• Variations exist between states with early notification (e.g., Karnataka, Maharashtra) versus delayed implementation.
• Employers operating multi-state chains must align rosters and payroll systems with state-specific rules, adding an additional layer of compliance complexity.

Impact on Employers — Compliance and Operational Flexibility

Shift Scheduling, Roster Redesign, and Payroll Implications

The New Labour Codes impose structured limits on working hours and weekly rest, compelling employers in retail and hospitality to revisit shift rosters. Large retail chains, malls, hotels, and restaurants may need to redesign employee schedules to ensure compliance with maximum daily hours and mandatory rest intervals.

Payroll departments also face added complexity: overtime, shift premiums, and compensatory offs must now be calculated according to statutory definitions. Accounting for all categories of workers — full-time, part-time, contractual, and gig — requires robust digital payroll systems and accurate timekeeping mechanisms

• Employers must maintain compliance registers and audit trails for all shifts and leave compensations.
• Failure to adhere to weekly rest provisions may trigger inspections, penalties, or litigation.

Managing Weekly Holidays and Compensatory Off Obligations

Weekly holiday management becomes more intricate under the Codes. Employees working on a designated weekly off are entitled to either a compensatory day off or overtime pay, which employers must integrate into existing leave policies and operational plans.

• Seasonal spikes may necessitate advance planning of compensatory off schedules.
• Multi-shift operations require tracking of cumulative work hours to ensure no employee exceeds statutory limits.

Administrative and Inspection-Related Challenges

Compliance under the new framework demands enhanced administrative capacity. Labour inspectors and state authorities may audit both working hours and payment records. For employers, this translates into:

• Upgrading HR and payroll systems to capture hours, overtime, and weekly rest accurately.
• Training supervisors and managers on shift adherence, rest compliance, and recordkeeping.
• Ensuring internal policy consistency across branches and locations to withstand audits.

Impact on Employees — Work-Life Balance and Rights

Legal Protection for Weekly Rest and Overtime Entitlements

The Codes provide employees with clear legal safeguards. Workers are now entitled to:

• Mandatory weekly rest, with compensatory leave if the rest day is worked.
• Overtime pay at statutory rates for hours exceeding the daily or weekly ceiling.
• Defined rest intervals during shifts to reduce fatigue and improve workplace safety.

These provisions aim to formalise informal practices and ensure that employees in both retail and hospitality sectors receive fair compensation and predictable rest periods.

Effects on Part-Time, Contractual, and Gig Employees

Part-time, contractual, and gig workers — who constitute a significant portion of retail and  hospitality workforces — gain enhanced clarity on entitlements. While full-time employees traditionally enjoyed weekly rest and overtime protections, these groups now have legally enforceable rights, though implementation may vary across states depending on notifications.

• Employers may need to track hours and compensatory leaves separately for each category of worker.
• Gig and contract employees may face limited enforcement in states with partial notifications, adding complexity.

Employee Perception, Morale, and Retention Considerations

Legal clarity can improve employee morale, particularly in sectors historically plagued by irregular shifts and unpaid overtime. Workers perceive transparency and predictable rest schedules as signals of organisational fairness. Conversely, poor implementation or inconsistent application may erode trust and impact retention, particularly among frontline and seasonal employees.

• Predictable shifts contribute to higher satisfaction and reduced burnout.
• Proper communication of entitlements enhances employee trust and engagement.

Sector-Specific Scenarios and Examples

Retail Chains: Mall Stores, Supermarkets, and Online Fulfillment Centers

In retail, large mall stores and supermarkets operate extended hours, often requiring staggered shifts for morning, afternoon, and evening coverage. Online fulfillment centers, especially during e-commerce peak seasons, have highly dynamic shift patterns to meet delivery targets.

• Pre-Code scenario: Roster flexibility often led to irregular weekly rests, unpaid overtime, and ad hoc compensatory leaves.
• Post-Code scenario: Employers must formalise shift allocation, weekly off scheduling, and overtime calculation, creating predictable work schedules while maintaining operational efficiency.

Hospitality: Hotels, Restaurants, and 24-Hour Service Establishments

Hospitality businesses face continuous operational requirements. Hotels and restaurants, particularly in urban and tourist-heavy areas, rely on rotational staffing for front-desk, housekeeping, kitchen, and service personnel.

• Pre-Code scenario: Night shifts and weekend work were often compensated inconsistently, with limited monitoring of weekly rest compliance.
• Post-Code scenario: The Codes mandate structured shift durations, statutory rest intervals, and compensatory leaves, requiring hotels and restaurants to redesign rostering practices without compromising service standards.

Illustrative Comparisons of Pre- and Post-Code Shift Management

Ethical and Strategic Considerations

Balancing Operational Demands with Statutory Compliance

Employers must align operational efficiency with legal requirements. While retail and hospitality demand flexibility to handle peak hours and seasonal spikes, non-compliance carries legal, financial, and reputational risks. Structured rostering and automated tracking tools can help achieve this balance.

Preventing Worker Exploitation While Ensuring Business Competitiveness

The Codes provide employees with enhanced rights, but ethical implementation is critical. Employers must avoid excessive shift stacking, skipped rest intervals, or improper compensatory leave. At the same time, business competitiveness depends on adapting operations within legal frameworks, avoiding unnecessary disruption to service quality.

• Ethical compliance promotes morale, retention, and productivity.
• Strategic shift planning ensures business continuity during peak demand periods.

Lessons for HR Policy and Internal Governance

The introduction of the Codes presents an opportunity for organisational learning:

• Establish clear internal policies for shift scheduling, overtime, and weekly rest.
• Train supervisors on legal requirements, recordkeeping, and employee communication.
• Monitor compliance through internal audits and feedback mechanisms, reducing the risk of disputes.

By integrating these practices, companies can safeguard employee welfare while maintaining operational excellence.

Conclusion

Summary of Regulatory Changes and Their Sectoral Impact

The introduction of the New Labour Codes, particularly the OSH Code, 2020 and the Code on Wages, 2019, brings significant clarity and standardisation to shift management and weekly holiday entitlements in the retail and hospitality sectors. Employers are now legally bound to:

• Limit daily shifts to 9 hours and weekly working hours to 48 hours.
• Provide mandatory weekly rest with compensatory leave if an employee works on a designated day off.
• Accurately calculate overtime pay, factoring in redefined wages and statutory allowances.

For employees, these reforms promise enhanced protection, predictable work schedules, and transparent compensation. For employers, the Codes necessitate systematic rostering, payroll restructuring, and compliance monitoring.

Guidance for Employers and Employees Navigating New Shift and Weekly Holiday Rules

Employers should:

• Redesign shift rosters to meet statutory limits while maintaining operational efficiency.
• Implement digital tracking systems for work hours, weekly rest, and compensatory leaves.
• Train HR and supervisory staff on legal compliance and employee communication.

Employees should:

• Be aware of their entitlements to weekly rest, overtime pay, and compensatory leave.
• Monitor actual shift schedules to ensure compliance with the Codes.
• Report discrepancies through internal grievance mechanisms or labour authorities if needed.

By proactively aligning operational practices with the Codes, retail and hospitality organisations can achieve legal compliance, protect workforce welfare, and maintain service standards, while employees gain clarity, security, and fair compensation in an evolving labour environment.