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Hello Sir/Madam, Am working in a small start-up pharma pvt. ltd. company having 10 employees and 2 office boys. i have a query regarding over-time calculation. our office time is 9:30am to 6:00pm and in between 40 min.s lunch-break. some time due urgent work or submission we have to work extra hours usually half an hr. to 1hr. and our office boys work for 3-4 hrs. extra. now how to calculate this over time or extra time worked and pay them over time salary.
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Hi Sneha,
If your Co. is classified as a 'factory' under the Factories Act following provisions shall apply -
" Sub-Sec (1) Sec. 59 of Factories Act 1948 provides-
where a worker works in a factory for more than 9 hours in any day or for more than 48 hours in any week, he shall, in respect of overtime work , be entitled to wages at the rate of twice his ordinary rate of wages.
Sub-sec.(2) of Sec.59 provides that "ordinary rate of wages" means the basic wages plus such allowances, including the cash equivalent of the advantages through the concessional sale to workers of food grains and other articles as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work."
You may calculate over time payment eligible/due to these employees like this =
(Basic Pay + DA /30) ie., One day wages divided by 8 hrs. = 1 hour wages multiplied by 2
is twice the rate of OT. For this purpose 'wages' would mean Basic Pay plus Dearness Allw. In case these employees are paid consolidated salary, either it shall be broken into Basic, DA and other allw. or you have to take full salary and calculate.
If not a factory, single OT may be paid without multiplying by 2.
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