Dinesh Divekar
Business Mentor, Consultant And Trainer
Asso.prof.(commerce & Management)
+1 Other

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My Company is paying extra to the Employees who work on Sundays and other Holidays. But the amount is calculated on the basis of Basic Salary and Not on CTC (Only for extra days). All such employees are earning monthly salary of more than Rs.50,000 per month and company is Paying PF and for Medical Insurance. I was wondering whether it is specifically against the law to do so?
Dear friend,
I wish to congratulate you for doing good to your employees. Don't get confused with 'Take Home pay' and CTC. Many of the components of CTC are not payable as part of 'salary' month to month, like 'gratuity, bonus, leave salary contributions' which are deferred payments (accrued but not due) , payable only when the employees become eligible for the same & becomes due. Therefore nothing illegal in what you are paying presently.

Thank you so much for the positivity.
Dear friend,
For work rendered on Sunday or Holiday, the remuneration has to be paid at par with any other working day. It should be on the "Gross Salary" for the month. Neither you should pay according to the basic salary nor CTC.
As of now, how do you pay for the extra working day? Is it a cash payment or you route this payment through monthly salary? If latter, then under what heading of the payslip, do you show this payment?
For Mr Kumar S: - For the extra work day, why an employee should get paid as per the basic and not as per the gross salary? In many companies the basic is anything between 30 and 50% Therefore, if paid according to the basic then will it not be a not a loss to the employee?
Dinesh Divekar

It is paid with monthly salary under Incentive
If you are talking about annualleave under Factories Act, then you have to pay full wages including DA,but excluding OT and bonus.See sec 80.
I have to clarify this point, as per extant rules OT wages to be paid on gross salary and not restricted to Basic pay alone. This would include Basic+DA+and other routine allowances. In various cases courts have concluded it shall be 1 1/2 times of salary which is clearly Basic + DA+HRA+CCA and other allow paid as a routine.
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