How Do I Calculate Overtime for the 26th Day and Is My Company Obligated to Pay Bonuses This Year?

Dear All Seniors, I have some problems which are most important for me. The first is related to overtime, and the second is related to a bonus.

Overtime Calculation

Regarding overtime, my question is how to calculate the overtime for the 26th day of any month. Please provide me with the government order regarding this.

Bonus Payment Liability

In terms of the bonus, my question is this: if a company paid a bonus to its employees last year and is not currently making a profit, is the company not liable to pay a bonus for this year?

This matter is urgent. Please, Malik Sir, provide me with guidelines regarding both issues.

Overtime Calculation

Overtime can be calculated based on the average salary per hour, which can be determined by dividing the monthly salary by 30 or by 26. There is no specific guideline regarding this calculation as in the case of gratuity calculation. In a recent case (Management of Tansi Ltd Vs Presiding Officer, Labour Court), the Madras High Court has ruled that for retrenchment and purposes other than gratuity calculation, the concept of 26 as a divisor is not applicable. The term "other purposes" implies that unless otherwise specified, overtime should be calculated using the daily/hourly rate of salary derived after dividing the monthly salary by 30, not by 26. However, if the certified standing orders of the company permit, you may use 26 as the divisor.

Bonus Payment

Since the infancy protection period is over, the company must provide a minimum statutory bonus of 8.33%, even if it is operating at a loss, as the bonus is considered deferred salary.

Regards,
Madhu.T.K