Srinath Sai Ram
Hr Manager
S S Mishra
Agm Hr&admin
+4 Others

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Respected Group Members, Ours is a manufacturing co located in Gujarat. I would like to know the definition of wages on which we should pay overtime at the double of wages as specified under factories act 1948.please give comments/replies on following two points.

1. Minimum Wages or Fixed gross wages to be considered while calculation of overtime wages.
2. payment of overtime on minimum wages is specified under Certified Standing Orders, then is it legally correct or not?
Yours Faithfully,

Employee gross rate of wages is to be considered for calculation of overtime wages.
if you have any proof so please provide...
DEEPU9813
This forum is not where cases are fought, so don't ask for proof.
Any org is covered either under Factories Act or Shops Act. Both acts say basis for overtime pay is twice the normal rate of wages. Normal rate means monthly rate of wages viz. gross wages.
So wage rate of concerned employee, minimum wages or otherwise, will be basis for calculating overtime wages.

Ans. for Q # 1. The minimum wages is so fixed by respective state government and virtually the actual wages may be higher than the minimum wages. So the OT shall be calculated with the gross wages (wages+DA,if any).
Ans. for Q # 2. Payment of OT on minimum wages as per standing order means if the wages so fixed is lower than minimum wages then this will be applicable. But it is not legally valid to have fixed the wages below prescribed minimum wages.

1. If you are paying minimum wages only then it will be calculated double of minimum wages.
2. while if you are paying more than minimum wages i mean BASIC+DA+HRA+COV+OTHER ALLl and this IS more than minimum wages then OT will be calculated double of Basic+DA .

Dear Anamika. can you please elaborate on your statement "Payment of overtime on minimum wages is specified under Certified Standing Orders, then is it legally correct or not" which Certifying Authority has approved this? can you please upload the relevant document to substantiate your Statement?
It is possible for the Cos. to state in the S.O. that all workers will be paid more than M.W. or no worker will be paid less than M.W., But; where a worker is paid on Gross salary including Basic+DA etc., they cannot be paid OT calculating wages on the basis of M.W. instead of Gross salary as that will amount to decreasing the benefit they are entitled to.
Request the Seniors to correct this if there is wrong.
HR Consultant.

On this issue; the points mentioned by Shri KM Kogata (reproduced below) is important; //
Quote ---
Ans. for Q # 2. Payment of OT on minimum wages as per standing order means if the wages so fixed is lower than minimum wages; then this will be applicable. But it is not legally valid to have fixed the wages below the prescribed minimum wages.---
Unquote // c.neyimkhan

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