Government allows work from home in Special Economic Zones

At a glance

• On 14 July 2022, The Ministry of Commerce and Industry issued a notification amending the Special Economic Zones Rules 2006.
• Additional guidelines were further issued by the Government on 12 August 2022.

Reproduced with the permission of the authors: Atul Gupta, Parvathy Tharamel and Tania Gupta at Trilegal.

The Ministry of Commerce and Industry issued a notification on 14 July 2022 amending the Special Economic Zones Rules, 2006 to include a new and more specific rule, Rule 43A, for governing WFH by SEZ units. Key features of Rule 43A are:

• WFH facility may be offered to employees of the Information Technology (IT) and IT enabled services SEZ units, employees who are temporarily incapacitated, employees who are travelling and / or are working offsite;
• A proposal to implement WFH has to be submitted to the Development Commissioner (DC) with the terms and conditions of the WFH facility and the details of the employees to be permitted to WFH;
• The proposal for WFH may cover up to 50% of the total employees, including contractual employees;
• Permission to WFH may be granted by the DC for a period of one year and may be extended for a period not exceeding one year at a time;
• Employees on WFH may be provided laptop, computer and other electronic equipment with prior permission of the Specified Officer (i.e. the Joint or Deputy or Assistant Commissioner of Customs for the time being posted in the SEZ);
• Units, whose employees are currently availing WFH facility, would be required to obtain permission under Rule 43A by submitting a proposal for permission to the DC within 90 days from 14 July 2022.

Additional guidelines were issued by the government on 12 August 2022 providing standard operating procedure for WFH such as details required to be mentioned in the application for WFH scheme, timelines for approval of the application, etc. Further, after the meeting of the reconstituted Board of Trade in New Delhi, the Central Commerce and Industry Minister shared that the government is considering further relaxations by extending WFH facility to 100% of the workforce in all SEZs. However, an official order implementing this has not yet been issued by the government.

Several issues regarding WFH rules in SEZs remain uncertain at this stage, including how organisations operating from SEZs, who want to operate in a ‘remote first’ or ‘work anywhere’ set up or otherwise offer flexible / hybrid working opportunities to their employees, will be able to comply with these rules.