Compensatory Time Off for Overtime: Is This the Right Approach?

Dear all,

We are giving compensatory time off for overtime worked. Is this correct?

Thanks.

Dear,

In the hotel industry, there is Paid Overtime (OT), but as per our policy, we provide Compulsory Compensatory Off.

Yes. As per Mr. Jai Bakshi, OT is paid for. OT is voluntary or on request acceptance by employees. Check your company policies for a clear understanding of OT remuneration. (Employee offer letter must include these details).

In my experience, employee satisfaction and full efficiency during OT is achieved when it is paid for.

Yes, if you pay for the OT, then ESI will be applicable on the paid overtime. However, if you amend your policy to state that after working for more than 4 hours of overtime, you may offer them Compensatory Off.

Regards,

Amit Seth

Hi,

In my view, we should consider working first because, as per the law, we have to provide one off within 10 days. Please suggest if this is correct.

Regards,
Dhanesh

Dear,

Please keep in mind the overtime limit allowed: 2 hours per day, 12 hours per week, 50 hours per quarter year. Please let me know how you can adjust compensatory off in the above scenario. You can't adjust compensatory off against the overtime because the overtime amount is double the normal rate. If it works against the weekly off, then you have to provide compensatory off along with the overtime for the whole day at double the rate.

Please explain your conditions in detail.

Best Regards,

Sajid Ansari

Overtime can't be compensated by compensatory off (c/off) alone; it must be paid at twice the gross salary.

Sumit Kumar Saxena
9899669071, 0120-4131277

In a number of companies, overtime (OT) is paid at a single rate only. During times of recession, it is adjusted for compensatory time off only. In our company, there is a new policy that OT is allowed for only 48 hours in a month. We cannot object to these changes.

It is illegal to give compensatory time off (C-off) for overtime work. By law, an employee is to be paid twice his normal wages for overtime work.

The basic pay and Dearness Allowance (DA) should be divided by the number of working days in the month. The quotient, when divided by 8, will give the normal hourly rate of wages.

Sanu Soman

In our company, overtime (OT) is paid, and compensatory time off (C/off) is provided only for working on holidays. It is compulsory to avail this C/off within the next three months.

Dear all,

The issue is not clear as to how the workers have earned overtime (by working on Sunday or working extra hours on regular days). In fact, there is no concept of 'compensatory off' in the law; the Factories Act only mentions 'compensatory holiday,' where the weekly off day is substituted as a working day. In case it is against the weekly off, then there is an option of paying overtime or giving compensatory off (Ref: AP High Court decision in Rajendra Nagar Municipality v. Perraju BV 1995 (2) LLN 674 = 1995 LIC 2102).

The expression "Overtime work" is self-explanatory - that is, the question of OT work arises only at the close of one's normal working time. Working on Sundays or weekly holidays cannot be construed as OT work.

Sanu Soman

I am also facing the same problem. In our company, there is no comp off or OT, but if there is necessary work, the employee will be working till late night or working on Sundays. In this case, if that employee takes leave without any information, should the salary be deducted for that day or not? Can anyone help me in this case?

Thank you.

Dear Forum Members, good evening to you all.

The question raised in the forum is whether compensatory time off in lieu of overtime (OT) is legal. Not at all, because OT is paid at double the rate (Basic + I.D.A.) to the employee, and there is a limit on working OT, averaging two hours per day. In the hotel industry, most OT may be attributed to the absence of relievers. The absence of a reliever compels the employee on duty to work an extra shift for which they are compensated illegally with comp time off. This is a wrong practice that hinders the efficiency of employees and the productivity of the organization. In some cases, employees are asked to work additional shifts due to workload, and they are allowed to accumulate comp time off, which is also not appropriate. Employees are required to use accumulated comp time off within a specified period, but often they choose to use it at their convenience without considering the business aspects. If this continues, it exacerbates the situation, creating a cycle of comp time off where other employees are asked to cover the extra duties.

What can we do? Meticulous manpower planning, especially for different seasons, should be implemented. Providing appropriate additional staff for reliever duties in duty rosters and rotating surplus manpower to needed sections should be considered for better results. This approach will reduce the burden of OT/comp time off and certainly improve work efficiency and productivity. Considering the business load, hiring temporary/casual/seasonal employees, apprentices, or trainees instead of relying on overtime may be an option. This strategy will increase the pool of trained staff in the industry, improve working conditions, and incur minimal payroll costs compared to OT/comp time off, while fostering cordial industrial relations.

R.K.SINGH