Model Standing Orders, 2026: The 300 Worker Count Is One Day, Not an Average

On 8 May 2026 the Ministry of Labour and Employment notified the Model Standing Orders, 2026, replacing a framework that had stood since 1946. For the first time there is a schedule written specifically for the service sector, which means IT companies, hospitals, hotel groups, retail chains, logistics operators, BPOs and facility management firms are now looking at a body of law that manufacturing has lived with for eighty years and services has largely ignored.

Most of what has been written about it since is aimed at large employers who already have a legal team. This article is aimed at the business that is not sure whether any of it applies. That turns out to be the hardest question in the whole area, and two of the answers circulating in print are wrong in ways that flip the result.

The threshold is not an average. The deadline is not upcoming. And an employer who has done nothing at all does not have no standing orders, which is the part that changes what you should do this week.

What standing orders are, in one paragraph

A standing order is the rulebook for employment in an establishment, and unlike a handbook it has statutory force. It sets out how workers are classified, how shifts work, how attendance is taken, how leave is applied for, what counts as misconduct, how someone is suspended or dismissed, and how a worker complains about unfair treatment. Once certified it binds both sides. Section 36 of the Industrial Relations Code, 2020 goes further than most employers realise: no oral evidence contradicting a certified standing order is admissible in any court. A long-standing verbal practice, the informal ten minute grace on shift start that everyone knows about, stops being a defence.

Before the Codes, this sat in the Industrial Employment (Standing Orders) Act, 1946 and bit at 100 workmen. Chapter IV of the IR Code replaced it, and the Model Standing Orders, 2026 replaced the 1946 Central Rules made under it. Two things changed that matter to a services business: the threshold moved up to 300, and the model text finally acknowledges that a workplace might not be a factory floor.

The threshold: one day, not an average

This is the sentence the whole question turns on. Section 28(1) of the IR Code, from the gazette text:

Read it twice, because a number of widely republished summaries of the Model Standing Orders describe the test as 300 or more workers "calculated on the basis of the average workforce strength over the preceding twelve months". The statute does not say average. It says on any day. A single day above the line in the last twelve months pulls the establishment into the chapter, and it stays in for as long as that day sits inside the rolling window.

For a business with a flat headcount this distinction is academic. For a business with a season it is the entire answer.

Where the two readings give opposite results

Take a retail chain that runs 240 workers for most of the year and staffs up for the six weeks around Diwali, peaking at 330 on the busiest day.

The same business, the same twelve months, two opposite compliance positions. Only one of them is what the section says.

Note also what the wording does not include: any requirement that the 300 be sustained, or that the peak be intentional, or that it happen in the current financial year. A rolling twelve month look-back means an establishment can be covered today because of a week last October, and can fall back out of coverage next month when that week ages past the window. Standing orders once certified do not evaporate on the way out, but the obligation to have them in the first place is decided by that look-back.

Who counts as a worker

The 300 is a count of workers, and worker is a defined term. Section 2(zr) of the IR Code covers any person employed to do manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms are express or implied. It then excludes four categories, two of which will change your number:

• Apprentices as defined under the Apprentices Act, 1961 are excluded by the opening words of the definition itself.
• Anyone employed mainly in a managerial or administrative capacity is excluded under clause (iii).
• Anyone employed in a supervisory capacity drawing wages above eighteen thousand rupees per month is excluded under clause (iv), or above whatever figure the Central Government notifies in place of it.
• Armed forces, police and prison staff are excluded, which will not apply to most readers.

So the count is not your payroll headcount. A supervisor on twenty thousand is out. A supervisor on sixteen thousand is in. A team lead who is genuinely managerial is out, and a team lead with the title but no managerial function is a question of substance rather than designation, which is where these arguments usually end up.

The question the Code does not answer

Contract workers. Section 2(p) defines industry to include systematic activity carried on by co-operation between an employer and worker "whether such worker is employed by such employer directly or by or through any agency, including a contractor", which reads as though contract labour is squarely inside the frame. Section 28 then speaks of workers employed in the establishment, and a contract worker is employed by the contractor.

No authority under the Code settling this was found while researching this piece, and it is not a detail. A facility management operation or a logistics business running 180 direct workers alongside 160 through contractors is on one side of the 300 or the other depending entirely on how that resolves. If that describes you, this is worth an hour with an employment lawyer rather than a decision made from a blog post, including ours. Our piece on contract labour rules under the Codes covers the surrounding obligations.

Your deadline was 21 May 2026

Section 30(1) requires the employer to prepare draft standing orders "within a period of six months from the date of commencement of this Code". The four Labour Codes commenced on 21 November 2025. Six months from that is 21 May 2026.

That date is behind us. It has been behind us for over a hundred days at the time of publication, and there is a mild absurdity in it worth naming: the Model Standing Orders that section 30(1) requires the draft to be based on were themselves only notified on 8 May 2026, thirteen days before the deadline to file a draft based on them.

What section 86(10) costs

The penalty is specific, and it is not the token amount that the old 1946 Act carried.

The continuing-offence component is the one to sit with. At two thousand rupees a day, the 107 days between 21 May 2026 and the date this article was published come to ₹2,14,000, on top of a base fine that starts at fifty thousand. That is an arithmetic illustration of the statutory exposure and not a bill anyone has issued. Nothing accrues automatically and nothing is owed until a prosecution succeeds. But the number is the reason to treat this as a live item rather than something to look at next quarter, because it grows while you decide.

If you cross 300 later

Section 30(4) is the provision for an establishment that was not covered on commencement and becomes covered afterwards. It gives six months from the date the chapter becomes applicable to that establishment, rather than six months from the commencement of the Code.

Combine that with the "any day" test and the practical rule falls out cleanly: your clock starts on the first day your worker count touched 300, and you have six months from that day. Which means you need to know which day that was.

You already have standing orders, even if you never wrote any

This is the provision that reframes the problem, and it is buried in the middle of section 29 where nobody looks.

Read that against what most covered employers are actually doing, which is nothing. The instinct is that an employer without standing orders is in a gap, exposed to a filing penalty but otherwise operating under its own contracts and handbook until it gets around to drafting. That is not the position. From the day the chapter applies, the Centre's model text is deemed adopted. The service sector schedule, with its attendance rules, its shift notice periods, its probation terms and its misconduct list, is your rulebook right now, and you have not read it.

Doing nothing is therefore not a delay. It is a decision to be governed by a document drafted for the general case rather than one drafted for your business. That is a materially different thing to explain to a board, and it is the argument that usually moves this up the list.

What the service sector schedule says about attendance

Schedule C of the Model Standing Orders, 2026 is the Service Sector Standing Orders. Paragraph 10 is headed "Attendance and late coming", and because it is the operational clause that touches every working day, it is worth reading closely rather than in summary. Quoted from the gazette, whose own grammar is preserved:

• 10(1) Every worker shall be at work at the time fixed and notified under paragraph 4, and a worker attending late is liable to deduction of wages as provided under the Code on Wages, 2019.
• 10(3) "Every workers shall register their attendance at the commencement of the shift and at the close of the shift."
• 10(4) "Attendance of worker shall be regulated by means of identity card, biometrics or any other system as has been notified for the purpose."
• 10(5) "No worker shall use or punch the Identity Card other than his own."
• 10(6) A worker reporting later than the scheduled time shall not be permitted to enter the department or section unless permitted by the manager or an authorised officer.
• 10(7) A worker is deemed absent if they fail to attend duty without written permission from the manager or authorised officer.
• 10(8) A worker who habitually reports late or remains absent is liable to deduction of wages under the Code on Wages, 2019.

Three of those are worth pulling out because they are operational requirements rather than statements of principle.

Paragraph 10(3) requires two events per worker per day. Not a presence marker, not a day-level attendance register entry made by a supervisor at some point in the morning. A registration at the commencement of the shift and another at its close. An establishment that records a single daily present or absent flag is not doing what 10(3) describes, and that is the most common way services businesses actually track attendance.

Paragraph 10(4) requires a system, and names three options. Identity card, biometrics, or another notified system. A paper register signed at the front desk sits uneasily with all three. This does not mandate biometrics, and a lot of the coverage has overstated that, but it does close off the option of having no mechanism.

Paragraph 10(5) is buddy punching, written into a standing order. Using or punching someone else's identity card is now a breach of your rulebook rather than an informal annoyance, which changes what you can do about it and also what you are expected to prevent. Our guide on how to stop buddy punching covers the mechanics, and everything in it now has a clause number behind it.

Paragraph 3 sits underneath all of this: every worker must be issued an identity badge or card bearing their full name, it is not transferable, safe custody is the worker's responsibility, and it must be surrendered on leaving. Paragraph 4 requires the hours of work for all categories of worker to be displayed on the notice board or electronic notice board and on the establishment's portal, in Hindi, English and the local language, with a carve-out worth knowing about: for the IT sector, working hours are as per the agreement or conditions of appointment between employer and workers.

Why this is a records problem before it is a software problem

Go back to section 28 for a moment. To answer "were 300 or more workers employed on any day of the preceding twelve months", you need a daily headcount history covering twelve months. Not a monthly payroll register, which tells you who was paid in a month and not how many were simultaneously employed on the 14th. Not an average. A day-by-day count of workers employed, filtered by the section 2(zr) definition.

Most businesses cannot produce that, and the ones that can usually produce it from attendance data rather than from HR records. Which means the same system that paragraph 10(3) obliges a covered employer to run is also the system that tells you whether you are a covered employer. That is an unusually tidy loop, and it is the honest reason attendance software belongs in this article at all.

Adopting the model, or writing your own

Section 30 gives two routes, and they are not equally onerous.

Two timing provisions apply to route two and are genuinely in the employer's favour. Under the proviso to section 30(5) the certifying officer must complete certification within sixty days of receiving the draft, failing which it is deemed certified. Under section 33(1) the standing orders come into operation thirty days after authenticated copies are sent, or seven days after the appellate order if an appeal was filed under section 32, which itself must be lodged within sixty days.

Route one is faster and is the right answer for most businesses that are late. Route two is worth the effort where the model genuinely does not fit, and there is a middle path the Code expressly allows: section 30(1) lets you include any other matter you consider necessary given the nature of your activity, so a tailored draft is not an all-or-nothing rewrite.

Ten matters your standing orders must cover

The First Schedule to the IR Code lists what standing orders must provide for. Section 30(6)(a) makes this binding rather than advisory: standing orders are certifiable only if provision is made for every matter in the First Schedule applicable to the establishment.

1. Classification of workers: permanent, temporary, apprentices, probationers, badlis or fixed term employment.
2. The manner of intimating to workers the periods and hours of work, holidays, pay days and wage rates.
3. Shift working.
4. Attendance and late coming.
5. Conditions of, procedure for applying for, and the authority which may grant leave and holidays.
6. Requirement to enter premises by certain gates, and liability to search.
7. Closing and reporting of sections, temporary stoppages of work, and the resulting rights and liabilities.
8. Termination of employment and the notice to be given by employer and worker.
9. Suspension or dismissal for misconduct, and the acts or omissions that constitute misconduct.
10. Means of redress against unfair treatment or wrongful exactions by the employer or their agents.

Item eleven is a catch-all for anything the appropriate Government notifies later. Item four is the one this site has most to say about, and it is not optional content: an attendance clause is compulsory in every certified standing order.

Clauses in Schedule C that will surprise a services business

Work from home is recognised, and it is discretionary

Paragraph 9 of the Service Sector Standing Orders is the first consolidated recognition of remote work in India's standing orders framework, and it is narrower than the headlines suggested. Subject to the conditions of appointment or an agreement between employer and workers, the employer may allow a worker to work from home, a remote location or a virtual workplace for such period or periods as the employer determines.

That is an enabling power, not an entitlement. It creates no right to remote work and it makes the arrangement contractual. The practical consequence for a hybrid services business is that the eligibility conditions, the monitoring, the data security terms and the right to withdraw all need to live somewhere written, because paragraph 9 points at the contract and the contract is where the detail has to be.

Twenty-one days notice to change a shift

Paragraph 7 lets the employer run more than one shift at its discretion and makes workers liable to be transferred between shifts. Then it constrains the employer in a way that catches people out: no shift working shall be discontinued without twenty-one days prior notice in writing to the concerned worker, and under 7(6) whenever an additional shift is started, or shifts are restarted, discontinued or altered, twenty-one days prior notice must be given to the affected workers.

Altered is doing a lot of work in that sentence. There are two provisos: no notice is needed in an emergent situation necessitating a change of shift, in consultation with the Grievance Redressal Committee under section 40(c) of the Code, and none is needed where the change follows a government order, settlement or award under section 40(d). Paragraph 8 requires the notice to be displayed conspicuously on the notice board or electronic notice board and portal, with a copy served electronically or by speed post on the secretary of any registered trade union.

A services business that reshuffles rosters weekly should read paragraph 7(6) carefully with its advisers. Our piece on shift management covers the operational side of running rosters with notice periods attached.

Probation is six months, extendable by three

Under paragraph 2 of Schedule C, a permanent worker includes anyone who has satisfactorily completed a probationary period of six months. A probationer is provisionally employed against a permanent vacancy, and the probation may be extended by a further period upon assessment of performance, which the notification sets at up to three months. A proviso protects a permanent employee moved into a new post as a probationer: they may be reverted to their former permanent post during the six months.

Two details in the same paragraph are easy to miss. Interruption on account of accident, leave, lockout, strike or involuntary closure counts as part of the probationary period rather than pausing it. And a badli substituting for a probationer becomes a permanent worker after completing the probationary period.

Fixed term employment is a classification, with parity attached

Fixed term employment appears in Schedule C as one of the recognised classes: engagement on a written contract of employment for a period, with wages, hours and benefits no less favourable than a permanent worker doing the same or similar work, and eligibility for the statutory benefits available to a permanent worker proportionately. Completion of the tenure is not retrenchment. Our article on gratuity for fixed term employees covers the one year gratuity entitlement that follows from this.

Discipline runs on a ninety day clock

Section 38 of the Code sits alongside the standing orders and applies whichever route you take. Where a worker is suspended pending investigation or inquiry into misconduct, the investigation and inquiry shall ordinarily be completed within ninety days from the date of suspension. Certified standing orders must provide for subsistence allowance during suspension at fifty per cent of wages for the first ninety days, and seventy-five per cent thereafter where the delay in completing proceedings is not directly attributable to the worker's conduct.

The seventy-five per cent tier is effectively a cost applied to the employer for a slow inquiry, and it is the reason the ninety days is worth diarising rather than treating as guidance.

What to do this month

1. Establish your maximum single-day worker count for the last twelve months. Not the average, not the payroll headcount. The highest number of workers, as defined in section 2(zr), employed on any one day. If you cannot produce this, that gap is itself the first thing to fix.
2. Strip out the exclusions before you compare to 300. Apprentices under the Apprentices Act, managerial and administrative staff, and supervisory staff above ₹18,000 a month come out of the count.
3. If you touched 300 on any day, identify which day. That date starts the section 30(4) clock for an establishment that became covered after commencement, and it is the date you will tell the certifying officer.
4. Read Schedule C of the Model Standing Orders as though it were already yours, because under section 29(2) it is. Mark every clause your current practice does not match. Paragraph 10(3), attendance at both ends of every shift, is where most services businesses find their first gap.
5. Decide route one or route two, and take advice on it. For most late, mid-sized services businesses, adopting the model under section 30(3) is the fast way to stop a continuing offence running.
6. Fix the display obligations while you are there. Working timings, holidays, pay days and wage rates on the notice board or electronic notice board and portal, in Hindi, English and the local language. These are paragraphs 4 to 6 of Schedule C and they are cheap to comply with.
7. If you have pre-Code standing orders, get them reviewed for inconsistency rather than assuming section 30(11) saves them whole.

None of this is a substitute for advice on your own facts, and the contract labour question in particular is not one to resolve from an article.

Frequently asked questions

Do standing orders apply to a company with fewer than 300 workers?

Chapter IV does not apply on its own terms below 300. Two caveats. The count is of workers on any day in the preceding twelve months, so a business that sits below 300 most of the year may still be covered. And section 39 lets the appropriate Government exempt establishments from the chapter, which implies states can also legislate around the threshold, so a state amendment is worth checking.

Is my services business an industrial establishment?

Probably yes. Section 2(r) defines an industrial establishment as one in which any industry is carried on, and section 2(p) defines industry as any systematic activity carried on by co-operation between an employer and worker for the production, supply or distribution of goods or services to satisfy human wants, whether or not capital was invested and whether or not there is a profit motive. That is deliberately wide. Institutions owned or managed by wholly or substantially charitable, social or philanthropic organisations are excluded. The existence of a dedicated service sector schedule in MSO 2026 confirms the drafters expected services to be covered.

What happens if I miss the deadline entirely?

The section 86(10) fine is the direct consequence, starting at fifty thousand rupees with a two thousand rupee daily component for a continuing offence. The indirect consequence is the more likely one to bite first: under section 29(2) you are operating under the Centre's model text, so any dispute about a dismissal, a suspension or a shift change is measured against a document you did not write and may not have read.

Does the model standing order override my employment contracts?

Where they conflict on a matter the standing orders cover, the standing order is the statutory instrument and section 36 bars oral evidence contradicting a certified standing order. Paragraph 9 on remote work runs the other way and expressly defers to the conditions of appointment or agreement, and paragraph 4 does the same for working hours in the IT sector. Read the specific clause rather than assuming a general rule in either direction.

Can I change my standing orders once certified?

Not for six months. Section 35(1) bars modification until six months from the date the standing orders or the last modification came into operation, except by agreement between the employer and the workers or their union. After that, section 35(2) lets either side apply to the certifying officer, and the same certification procedure applies as for the first standing orders. Modifying outside section 35 is itself an offence under section 86(10).

Where are certified standing orders kept?

Section 34 requires the certifying officer to file a copy in a register or upload it in electronic form, and to furnish a copy to anyone applying on payment of the prescribed fee. Certified standing orders are a public document. Section 33(2) separately requires the employer to maintain the text for the information of the workers in the prescribed language and manner.

Sources and how they were read

The statutory text in this article was read first hand rather than taken from summaries. The Industrial Relations Code, 2020 was read from the gazette text published by PRS Legislative Research, and sections 2(p), 2(r), 2(zr), 28, 29, 30, 33 to 36, 38, 39, 86 and the First Schedule are quoted or closely paraphrased from it. The Model Standing Orders, 2026, notified as S.O. 2312(E) on 8 May 2026, were read from the gazette PDF; Schedule C, the Service Sector Standing Orders, is the source for every paragraph number cited. The commencement date of 21 November 2025 is sourced to the Ministry of Labour and Employment announcement on the Press Information Bureau.

Two things in this article are reported rather than read first hand, and are flagged as such where they appear: the procedure and the thirty day window by which an employer adopting the model informs the certifying officer, which comes from law firm summaries of the Industrial Relations (Central) Rules, 2026, and the section 33(2) display requirement in three languages. The Central Rules themselves were not read first hand for this piece.

Deliberately absent: any state-by-state table, which goes stale faster than it is useful, and any answer on whether contract workers count toward the 300, which the Code does not settle and this article will not guess at.

This article is general information about Indian labour law and not legal advice. Thresholds, exemptions and state amendments vary, and the application of section 28 to a particular workforce is a question of fact. Take advice on your own position.