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Update on SEZs: Work from Home

On December 8, 2022, Rule 43A of the Special Economic Zones Rules, 2006 (“Rules”) has been amended by the Ministry of Commerce and Industry (Department of Commerce). This has been done through the Special Economic Zones (Fifth Amendment) Rules, 2022 (“Amendment”).

Background: Earlier this year, the erstwhile Rule 43A of the Rules was introduced to regulate “Work from home”. It allowed the IT and ITES companies operating in Special Economic Zones (“SEZs”) to permit 50% of their workforce to adopt work from home or from any place other than the office (“WFH”). Additional requirements were also brought in, such as submission of a proposal to the Development Commissioner, sharing the list of employees permitted to WFH and also framing of a WFH policy.

Update: The Amendment allows for IT and ITES companies operating in SEZs to permit WFH for their entire workforce up to December 31, 2023. The amended Rule 43A also simplifies the regulatory requirements for implementing work from home. Employers no longer need to seek permission from the Development Commissioner but need to merely intimate them about the intention to allow WFH (by E-mail). Employers will still need to maintain a list of the employees on WFH which shall be furnished when expressly demanded by the Development Commissioner.

Other than IT and ITES companies in SEZs, employees that are temporarily incapacitated, travelling or working offsite can also avail WFH.

Note: “Employees” includes all persons employed (i) on the rolls of the company, (ii) under a direct contract or (iii) persons reporting under the accord of a contract between the company and a contractor.


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