How to calculate overtime - formula for overtime? - employment agreement

meenakshibhat Started The Discussion:


Mahr -  Member Since: Jan 2010
INDIA - Indian labour law concerning OT (Central & States) says that we are to make payment to the worker/employee @ double the ordinary rate of wages/ normal wages. According to me The Factories Act,1948, The Minimum Wages Act,1948 & State Shops & Commercial Establishment Acts provides us procedure for taking OT & for calculating the OT payments. Section 59 of Factories Act says that where a worker works on OT he will be entitled to wages at the rate of twice his ordinary rate of wages. According to Rule 25 of Minimum Wages (Central) Rules, 1950 also states that OT is to be given at double the ordinary rate of wages. According to the Minimum Wages Act & Rules we are to divide the rate of wages by 26 for calculating 8 hours (one day) wages. For calculating one hr. wages we are to divide by 8 to one day wages. Thus if we take OT for one hour then we are to paid wages @ double this wages for one hour. State Shops & commercial Establishment Acts also provides provisions for OT payments. You may go through these enactments for having more clarification on the subject.

USA- Most overtime hours are payed 1& 1/2 times your original hourly pay. SO if your payed $10.00 an hour you will be payed $15.00 for every overtime hour. $12.00 would be $18.00 an hour in overtime pay. $6.50 an hour would be $9.75 an hour overtime rate. Some states have their own policy on overtime pay but the national law is 1 1/2 times your original hourly wage. Some professions are excluded ,see your labor rights poster which should be posted at your job in an area where all employees are readily able to read and understand it.

Time and one-half the "regular hourly rate." If an employees regular pay is not expressed as an "hourly" rate, their regular pay rate must be converted to an hourly equivalent.

Hourly rate -- (regular pay rate for an employee paid by the hour). If more than 40 hours are worked, at least one and one-half times the regular rate for each hour over 40 is due.

Piece rate -- The regular rate of pay for an employee paid on a piecework basis is obtained by dividing the total weekly earnings by the total number of hours worked in that week. The employee is entitled to an additional one-half times this regular rate for each hour over 40, plus the full piecework earnings.

Another way to compensate pieceworkers for overtime, if agreed to before the work is performed, is to pay one and one-half times the piece rate for each piece produced during the overtime hours. The piece rate must be the one actually paid during nonovertime hours and must be enough to yield at least the minimum wage per hour.

Salary -- the regular rate for an employee paid a salary for a regular or specified number of hours a week is obtained by dividing the salary by the number of hours for which the salary is intended to compensate.

If, under the employment agreement, a salary sufficient to meet the minimum wage requirement in every workweek is paid as straight time for whatever number of hours are worked in a workweek, the regular rate is obtained by dividing the salary by the number of hours worked each week. To illustrate, suppose an employee's hours of work vary each week and the agreement with the employer is that the employee will be paid $420 a week for whatever number of hours of work are required. Under this agreement, the regular rate will vary in overtime weeks. If the employee works 50 hours, the regular rate is $8.40 ($420 divided by 50 hours). In addition to the salary, half the regular rate, or $4.20 is due for each of the 10 overtime hours, for a total of $462 for the week. If the employee works 60 hours, the regular rate is $7.00 ($420 divided by 60 hours). In that case, an additional $3.50 is due for each of the 20 overtime hours, for a total of $490 for the week.

In no case may the regular rate be less than the minimum wage required by FLSA.

If a salary is paid on other than a weekly basis, the weekly pay must be determined in order to compute the regular rate and overtime pay. If the salary is for a half month, it must be multiplied by 24 and the product divided by 52 weeks to get the weekly equivalent. A monthly salary should be multiplied by 12 and the product divided by 52.

gtmhrexecutive -  Member Since: Feb 2010
great! Patil. Clear explained, but can it apply under shop and establishment act also. please make it clear.


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