Telangana Government Extends Exemptions for IT and ITES Establishments

The Government of Telangana recently issued a significant notification, GO.Ms.No. 5, dated June 7, 2024, published in the Telangana Gazette on June 12, 2024, granting a four-year exemption to all Information Technology Enabled Services (ITES) and Information Technology (IT) establishments operating within the state. This measure, effective retrospectively from May 30, 2024, was enacted under the authority of sub-section (4) of section 73 of the Telangana Shops and Establishments Act, 1988 (Act No. 20 of 1988). The notification specifically exempts these establishments from the provisions of sections 15, 16, 21, 23, and 31 of the said Act, subject to a comprehensive set of conditions aimed at safeguarding employee welfare. The legislation provided: “In exercise of the powers conferred by sub-section (4) of section 73 of the Telangana Shops and Establishments Act, 1988, the Government of Telangana hereby exempts all Information Technology Enabled Services (ITES) and Information Technology Establishments in Telangana State from the provisions of sections 15, 16, 21, 23 and 31 of the Telangana Shops and Establishments Act, 1988 for a further period of four (4) years w.e.f.30.05.2024, subject to the following conditions:”

This exemption introduces several key provisions and changes affecting the operational framework for IT and ITES companies, which are businesses that provide services over telecommunication links. Among the conditions, weekly working hours for an employee are capped at 48 hours, with entitlement to overtime wages for any work performed beyond this limit. Every employee is mandated to receive a weekly off. The notification permits the engagement of young and women employees during night shifts, provided adequate security is ensured during employment and for transport to and from their residences. Establishments are required to furnish identity cards to all employees and extend all welfare measures as per existing rules. Employees working on notified holidays must be granted a compensatory holiday with wages, as per the provision to sub-section (2) of section 31 of the Telangana Shops and Establishments Act, 1988. Further conditions include mandatory bio-data collection and pre-employment screening for all drivers, careful route planning for pick-up and drop-off services, particularly ensuring women employees are neither picked up first nor dropped last, and the non-disclosure of women employees' telephone numbers to unauthorized persons. Companies are also encouraged to provide security guards for night shift vehicles and establish control rooms for monitoring vehicle movements. A significant administrative change is the general exemption from maintaining various statutory registers in hard copies, with recognition of soft copies as sufficient compliance. The notification explicitly states that the exemption may be revoked at any time without prior notice if any of the stipulated conditions are violated, emphasizing that these conditions must not be detrimental to the employees.

The legislative intent behind this notification is to facilitate the operational flexibility required by the dynamic IT and ITES sectors, which often operate round-the-clock and have unique staffing requirements, including night shifts. The earlier legal position under the Telangana Shops and Establishments Act, 1988, would have imposed more rigid regulations on working hours, holidays, and other employment conditions, which were primarily designed for traditional commercial establishments. This exemption addresses the statutory gaps and limitations that arose from applying conventional labour laws to the distinct working models of the IT industry. By providing these exemptions, the government aims to support the growth and competitiveness of these sectors in Telangana, while simultaneously ensuring that employee rights and safety, especially for women, are not compromised. The conditions attached to the exemption introduce new obligations for establishments, such as enhanced security measures, specific transport protocols, and adherence to working hour limits with overtime provisions, thereby balancing industry needs with worker protection. The enforcement mechanism is clear: non-compliance with the conditions can lead to the revocation of the exemption, ensuring accountability. The notification also streamlines compliance by allowing for digital maintenance of statutory registers, aligning with modern administrative practices.

Keywords: Telangana, IT, ITES, Shops and Establishments Act, exemption, labour laws, employment, working hours, women safety, statutory compliance Geo Tags: India, Telangana District: Not Applicable