COVID-19 has adversely affected the different aspects of work and society. Due to the decline in economic activity globally, employees were exposed to conditions in which they were forced to work for reduced working hours leading to an increase in time-related underemployment. The goal of the present study was to determine the extent of time-related underemployment and the rate of unutilized labor resource in the Agro-based Industry. This study was conducted with 500 middle-level and lower-level executives working in the Textile Industry and Food and Beverage Industry. Time-related underemployment is defined as a situation in which employees worked for less than 48 hours per week and were available and willing to work for additional hours. It was measured with both objective and subjective measures. Data was analyzed through percentages, mean, t-test, independent t-test, and chi-square. Results showed that Time-related underemployment in the Food and Beverage Industry was 5.00% as compared to the Textile Industry with 3.08%. The majority of employees were moderately underemployed both in the Textile Industry and Food and Beverage Industry. The rate of unutilized labor resource was more in Textile Industry (9.9%) as compared to Food and Beverage Industry (9.2%). However, the difference in both the industries was found to be insignificant (p > 0.05). COVID-19 has exposed many workers to the disadvantageous position of working fewer hours than the pre-determined threshold hours for full-time work. Therefore, proper strategies need to be adopted to properly use the labor resource of the economy.