Dear sir/madam,
I observed that most of organization calculate overtime with salary formula of /26/8 * ot hrs * 2.
I want to know is this formula mentioned in factory act or minimum wage act or any other act of labour law?
if yes, than can i know this provision?

From India, Patna
Dear Mitesh makwana, Please note that OT Payment is paid@ double Rate on Gross Salary.Please refer to Minimum Wages NOTIFICATION Applicable to your Establishment for clarity
From India, New Delhi
Yes, there is a specific provision in factories act (read sec 52 to 58) that gives howmthe computation is to be done.
Most employers take 26 working days since 4 Sundays are in a month. So they divide the monthly salary by 26 to get daily salary. Then that is divided by 8 hours to get hourly rate. Overtime is to be paid at double of this rate

From India, Mumbai
Overtime is double the wages( basic + DA) , not double the gross salary
From India, Madras
Sebastian, Where did you get that information from ? Please do not put any thing that is not supported by the law of the land, or specifically against what is actually in the law
From India, Mumbai
Dear Mitesh,
Juxtaposing the Minimum Wages Act,1948 and the Factories Act,1948 regarding the issue of overtime payment, you can find the saving clause under sub section (2) of section 14 of the Minimum Wages Act,1948 prohibiting the prejudicial operation of the provisions of section 14 wherever sec.59 of the Factories Act,1948 is applicable.
Coming to the observation of Sebastian, it is not correct to take into account the components of basic and D.A only in computing the over time rate of wages in view of the meaning assigned to the term "ordinary rate of wages" u/s 59 (1) of the Factories Act,1948.

From India, Salem
Dear sir/madam,
Most of organization calculate overtime with salary formula of /26/8 * ot hrs * 2.
I want to know is this formula mentioned 26 OR 30 in factory act or minimum wage act or any other act of labour law?
if yes, than can i know this provision? can any one clarify on this please........

Regards
Shivakumar

From India, Bangalore
If someone is monthly rated employee, the daily rate of wages may be calculated by dividing the monthly rate by 30 or 28,29,30 or 31 depending on number of days in a month or monthly rate wages multiplied by 12 and then divided by 365/366 as the case may be when OT will be paid. Hourly rate will be determined by diving daily rate by 8.

If the employee is daily rated employee or hourly rated employee , then there will not be any issue. In this case to arrive at monthly rate, the daily rate should be multiplied by 26.

What Mr. Umakanthan has been mentioned that OT amount should be paid on "Ordinary rate of wages" not only on Basic and DA which I also agree.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
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