pragyesh-singh
Hello, Our company has flexible working hours. Any employee needs to complete their per day working of 8 Hours. In case, on any day he is unable to cover the complete 8 hours then, it can be covered on the next day or later at any time. Ultimately at the end of the month, we generate the salaries based upon the total number of working hours they worked.

Now, in case I'll calculate the salary as:

One hour salary= CTC/Total number of working hours in a month.
Ex: Rs.10000/ 240 hours= Rs. 41.66

Now, the employee worked for 26 days only means a total of 208 hours, excluding Sundays.
So the salary should be,
Per hour salary*number of working hours=Monthly salary
41.66*208= Rs.8666

Here the employee never took the leave still getting paid for less salary. So, in this case, either we can add 4 days or 32 hours of extra pay every time in his salary which will suffice his Sundays too. Because ultimately, we want to pay our employees for Sunday too.

So, my question is in this case, do I need to add 4 days extra pay for every employee in every month or is there any other solution we have for this ? and what we can do in case of the public holiday which needs to be paid.

From India
umakanthan53
6016

Dear Pragyesh,

What's your establishment - if a factory or other kind of establishment?

Anyway, authorised holidays including national and festival holidays and statutory leave, if any availed by the employee need to be paid. If an employee is required to work on his weekly Holiday, he needs to be paid at overtime rate for that day; work on a national or festival holiday without any substituted holiday needs to be paid double wages. Of course, adoption of hourly rate for calculation of wages is not unlawful. But such a micro approach would be convenient for the calculation of overtime wages which is strictly based on the actual hours worked beyond the normal working hours of a day and in my opinion it may not be advisable for regular work carried on in a systematic manner through out the month which seems to be the wage period. Working hours include the interval for rest also.

Quantitative works can be exactly measured in terms of actual hours spent on work continuously or intermittently. Bur qualitative work cannot be evaluated so. Therefore, Flexible working hours does not mean rigid calculation of wages based on the actual no of hours spent by the employee on work.

Applying the concept of CTC for every day to day aspect of employment would certainly complicate things in the long run.

From India, Salem
nanu1953
334

As the employees are working in flexible working hours and the salary level as mentioned in the post, the employee when work more than 8 hrs per day will be required to pay OT.

Daily wages should be obtained by dividing the monthly wages by 26 and then hourly wages by divided daily wages by 8. If the employee do not work on off day - no need to pay weekly off payment.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions

From India, New Delhi
saswatabanerjee
2383

One thing you need to decide is whether you are doing hourly or monthly rated salary.
If you are following monthly rated salary, then when you are dividing the salary by 240 hours a month, you are already paying for the weekly off by including the amount in the wage rate.

However, you still need to compute overtime, which means you need to see which day they have worked more then 9 hours or which week they have worked more than 48 hours.

If they work on a holiday, you need to give them double rate overtime. Which would be fine if you just add the hours worked. But you need to figure out who you will take care of compensatory off that is also compulsory to give.

From India, Mumbai
pragyesh-singh
I really appreciate the responses.

We are a product based IT company.

As of now I'm following the below calculation:

CTC/240 hours (30 days)= 1 hour salary
1 hour salary * total number of working hours of an emp= Salary based upon total work done for that particular month.

1 hour salary * 32 hours (4 sundays)= Paid Sunday's/Saturday's

Plus adding any Public holiday (if any)

Total salary given for that month: Salary based upon total work done for that particular month + Paid Sunday's/Saturday's + Paid Public holidays (if any).

Please make the corrections if needed.

From India
nanu1953
334

As per the giving data it appears that the monthly rate is as per minimum wages or close to that and probably for one schedule employment. In that case the daily wages will be obtained - the monthly wages divided by 26 and hourly rate to be determined - dividing daily rate by 8 i.e dividing the monthly wages by 26 x 8 =208 as per Minimum Wages Act.

If the monthly wages is much above than minimum wages, then there is no legal guide line but as per practice by different organizations the hourly rate may obtained - diving monthly rate by 30 x 8 = 240 or by 31 x 8 or by 28 x 8 or 29 x 8 or multiplied by 12 and then divided by 365 x 8 and so on.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions

From India, New Delhi
KK!HR
1530

The use of the term CTC is a misnomer, indeed CTC would include many factors which are outside the pay package, like employer contribution of PF, ESI, gratuity annuity, etc. Probably you may have intended gross salary only. The calculation of salary on the formula is corect :
Salary for a given month: Salary based upon (total work done for that particular month + Paid Sundays & Saturdays + Paid Public holidays if any).
Take care that the salary so paid every month is not less than the minimum wages notified for the type of work.

From India, Mumbai
saswatabanerjee
2383

In computing hourly wages, you can not divide CTC by 3240 hours.

First tell us your salary structure. What does your monthly salary consist of. Is it only one component (basic)? or are there other components

From India, Mumbai
pragyesh-singh
Yes it’s only complete CTC. There are no deductions.
From India
saswatabanerjee
2383

Then its Basic Salary, not CTC. CTC will be including all other costs.

In case this is basic, then you can not divide the salary by 240 to get working hours. In doing so, you are saying that you expect employees to work on Sunday / Weekly Off to get their full salary. Therefore this is illegal.

You have compute salary this way :

Salary Payable = Monthly Salary / 208 X (No of Hours worked)
All paid holidays will need to be counted as standard work hours (being marked present)

If you have Saturday and Sunday off, then the working will be
Salary Payable = Monthly Salary / 176 X (No of Hours worked)

From India, Mumbai
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