What if employees do regular OT then how to stop the OT, and how to calculate OT if the employee works every holiday?
From India, New Delhi

OT is pernicious once it becomes an entitlement rather than a necessity. There is one sure way of tackling it, by making it NO OT for each and every one in the organisation. No easy way to practice and a hard decision to take and implement. When the indomitable V Krishnamurthy took charge of an ailing PSU, one decision the board took was to stop OT and he implemented it from his office from day one. No office car was waiting for him at the airports and no office boy for him beyond their shift hours. It needs a lot of courage and really has to start from the top.
From India, Mumbai

It us always the employer who decides whether to obtain work on overtime, consent if employee is secondary. For an appropriate reply, please elaborate your query S. K. Mittal
From India, Faridabad
Dinesh Divekar

Dear member,

Well, gentleman, you have raised a query but it is too short. Payment of Overtime (OT) is a production-related issue. However, you have not provided basic information like how many workers are employed, the total number of processes in the assembly, the number of machines in the assembly etc. In fact, you have preferred to be anonymous. Why this heightened sense of insecurity that you would know best.

I prefer to look at your issue from the "Production Planning and Scheduling" point of view. If the workers are required to pay for the OT then we need to do the analysis of the genuineness of the payment of OT. To do this you need to do the following:

a) Do the OT analysis - total how many workers are employed in the production and what % of employees get OT each day.

b) Why are they required to work extra? Is it because of the material non-availability or downtime of the machines or quality-related issues?

c) Have the various production processes been standardised?

d) What tools of production planning and scheduling are being used by the production personnel? What needs improvement?

e) How do you measure the skill level of the employees? Have you done any standardisation?

I ask the above-mentioned questions because I conduct the training programme on "Operations Scheduling".

The objective of production scheduling is to reduce the idle time of the machines and labour and above all reduce the production cycle time.

I recommend you conduct a comprehensive study of the methods of your production/operations. Unless you do that, any decision taken with a sole focus on the labours could prove counterproductive. Aim of the reduction of OT is to reduce the labour cost in general but while reducing this cost, we have to make sure that some other cost like Cost of Poor Quality (COPQ) does not go up!


Dinesh Divekar

From India, Bangalore
stephen e

OT=Gross/26/8*No.of hours of OT*2, On holiday Every hour performed counted as OT. Regards, E.Stephen


OT is a phenomena which occurs when production planning, orders and normal work is not well planned or synchronised.When proportion of OT increases-management needs to analyse causes for this increase.
Are orders increasing?
Are workers using time productively and sticking to time standards for production?
Do you require more number of workers?
Factories Act has prescribed OT limits and constantly exceeding the limits for individual workers can get adverse reaction for Factory Inspector.
Besides health aspect for workers needs consideration.Workers may for increased cash n hand be happy to keep doing OT-but it will be at cost of health,quality,increased wastage etc.
Have a comprehensive study done in respect of processes,tools,machinery and working pattern to reign this addictive habit of OT.

From India, Pune

if employee works on holiday are entitled to premium pay at the rate of 200% of the normal wage rate. Am employee who is work on holiday must be paid salary at the overtime rate (twice the rate of wages).
overtime rate is time-and-a-half, so multiply the regular hourly rate by 1.5.
you can make calculating overtime wages more easier with the help of Payroll software.

From India, Pune
Nagarkar Vinayak L

Dear colleague,
Assuming that your entity is Factory, ( you should have clarified it ) you are governed by the provisions of FA and State Rules relating to daily/weekly limits of working hours, weekly off, OT working limits and procedure etc
Your query is how to stop uncontrolled OT by workers.
You may be aware that to work OT or not is entirely left to the decision of the management. From your query , it appears, you have let this control pass on to workers because of which there is free for all OT work decided by the workers themselves. The spiralling cost of OT wages is perhaps now pinching you and you have woken up to control it.
The situation has been led to become dicy and you need to handle it both with persuasive efforts and firm stand and position at appropriate time.
Before that, you carry out tha OT analysis and the need for it as advised by the senior colleague. If done properly, this should throw up tha data and logic to do OT or not and if any how many daily/weekly hours. My guess is it will point out towards no OT or bare minimum.
With the data and logic at hand talk to workers and persuade them to buy the fact that it is the prerogative of the management to decide giving OT, there is a law governing it and need to comply with it , and need to control recurring wage cost.
If the workers don't buy it, then you will have to hold the bull by horns. You take firm stand and position by announcing control measures and implementing them by using all the resources at your command.
Best luck,
Vinayak Nagarkar
HR and Employee Relations Consultant

From India, Mumbai

Ya quite innocent quiiery i think. Every word is available in M. W act 1948..oldest labour law..
First.. How to stop regular OT is not good to hear.... Any company should not allow anyone continue OT for all the week.
That means the company needs a next shift for disposing the more work.
Calculation of OT is very easy salary devided by/ 26 comes one day salary.
One day salary devided by /08(hrs) comes one hour's salary. (Salary means Basicpay +V.D.A)
Labour laws never permit anyone to work all Holidays.
That means the company is running beyond labour laws with total violations.
Daily OTs. No Holiday for the . Allowing to work..
Please review where is the company going.... avoid collapse with frustration growing among employees...

From India, Nellore

Why OT ?
Is it because there is more demand of product.
Is it because company wants to stock the product in bulk.
Is it because there is lapse in production chain some where.
Is it because there is supply of less employees in production.
Is it because there is poor adminstration
Is it because worker are not performing.
Is it becuse of faulty equipments or break downs.
Considering every fact, I believe the need of OT be put in to the production policy judiciously.
Control and manGement of OT is sensitive issue and must be handled by leaders.
Mind it it involves time, production, money and quality too.

From India, Vadodara
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