Labour Update | Andhra Pradesh
Andhra Pradesh Streamlines Online Inspections and Extends IT/ITES Exemptions for Five More Years
A facilitative compliance framework aligned to Ease of Doing Business, with clearer routing of grievances, controlled inspections, and an updated risk categorisation approach.
Context
On Tuesday, 17 February 2026, Microsoft Founder and Gates Foundation Chairman Bill Gates publicly appreciated Andhra Pradesh’s rapid development and noted the role of AI and technology in accelerating innovations across health, agriculture, and education, following his visit to Amaravati and interactions with the Chief Minister and officials reviewing technology-led governance initiatives.
What the Government of Andhra Pradesh Has Notified
The Labour, Factories, Boilers and Insurance Medical Services Department, Government of Andhra Pradesh, issued amendments on 14 February 2026 to further streamline the Online Inspection System and extend exemptions for Information Technology and Information Technology Enabled Services establishments. The changes are positioned within Ease of Doing Business initiatives, while retaining worker-centric parameters relating to wages, working conditions, welfare, and social security compliance.
Key Updates at a Glance
The amendments refine risk categorisation for inspections, treat all IT and ITES establishments as low-risk irrespective of employee headcount, renew IT/ITES exemptions under the Andhra Pradesh Shops and Establishments Act, 1988 for another five years (subject to conditions), and formalise grievance and inspection routing through jurisdictional labour authorities under a controlled approval framework aligned to an Inspector-cum-Facilitator approach.
Revised Risk Categorisation Under the Online Inspection System
| Category |
Worker Range |
Special Note for IT/ITES |
| High Risk |
1 to 30 workers |
Not applicable to IT/ITES classification |
| Medium Risk |
31 to 100 workers |
Not applicable to IT/ITES classification |
| Low Risk |
Above 100 workers |
All IT and ITES establishments are treated as Low Risk irrespective of employee strength.
|
Exemptions for IT and ITES Under the Andhra Pradesh Shops and Establishments Act, 1988
The exemption earlier granted to IT and ITES establishments has been extended for a further period of five years, subject to specific conditions. While the exemption provides operational flexibility, it does not dilute employee welfare and safety expectations, and employees remain protected under applicable labour laws and labour codes for fair wages and safeguards.
Exempted Provisions (as referenced)
Section 15
Restriction on opening and closing hours
Section 16
Restriction on daily and weekly hours of work
Section 21
Restriction on working hours for young persons
Section 23
Restriction on employing women during night shift
Section 31
Closing on national and festival holidays
Section 47, Sub-sections (1) to (4)
Conditions for termination of employment and payment of service compensation
New Compliance Mechanisms: Grievances and Inspections
Controlled Routing and Approval
Worker grievances, complaints and inspection actions are routed through jurisdictional labour authorities under a regulated process. Complaints regarding labour law violations are to be acted upon through the Jurisdictional Joint Commissioner of Labour and only with specific instructions of the Chief Inspector, with reporting and oversight routed to the Chief Inspector and Commissioner of Labour for action under applicable laws and labour codes.
Inspector-cum-Facilitator Approach
Inspections are aligned with prescribed guidelines under an Inspector-cum-Facilitator framework, intended to improve accountability while maintaining a facilitative regulatory environment for the IT and ITES sector.
What This Means for IT and ITES Employers
The extended exemption enables operational continuity, including the ability to run 24 by 7 operations, while organisations remain expected to follow safeguards for employee welfare and workplace security. Common compliance expectations referenced alongside the exemption include a 48-hour workweek standard, overtime compensation for extra hours as applicable, a mandatory weekly off, and conditions for women working night shifts including consent, security and transport arrangements. Where employees work on notified holidays, compensatory holidays with wages are to be provided. Transport safety and documentation controls, including driver verification and route discipline, are also referenced as operational safeguards.
The practical takeaway is straightforward: flexibility increases, but governance must be evidence-backed. Documentation, payroll controls, transport SOPs and grievance handling should be tightened so that business continuity does not create compliance exposure.
Need support to operationalise this change without risk?
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