Overtime Pay: Does It Depend on Job Type or Salary Range? Seeking Insights

Hello everybody! I have a query. I want to know if there is any provision for extra pay for overtime. In what kind of employment/conditions is it applicable? Does it apply to factory labourers, or does it vary based on the wage/salary range?

Regards,
Shweta

Hi Sweta,

Normally, overtime is paid to employees who receive wages and are not in an executive cadre. Wages are typically paid based on days or hours worked, not on a monthly basis. Overtime rates should be double the regular pay rate.

The standard workweek consists of 48 hours. In the case of larger organizations, negotiations can be conducted with workers. Consulting with a Labor Officer can help establish a daily breakdown, for example, 8 hours for 6 days or 9.5 hours for 5 days.

It's important to note that these rules do not apply to executive and managerial levels, as they are expected to work 24 hours (Poor executives).

Thank you.

Hi Shweta,

This pertains to the Overtime payment. Firstly, this will not apply to the management-level employees. Secondly, to answer your question on the payment of OT: Yes, OT is indeed payable to the workers, and as per labor law, it is 8 hours per day and 48 hours total in a week (Mon-Sat). If the worker is working beyond the timeframe, then the OT has to be paid depending on the number of extra hours worked.

Some companies also provide holiday allowances for work done on holidays (subject to management discretion). This is as far as my knowledge goes since I am a bit out of touch with labor law 🙊, but I am sure that many experienced individuals will provide accurate answers that should help solve your problem.

Regards,
Sadashiv Rao 😎

Extra Wages for Overtime Work Done

Under the Factories Act, the relevant provisions are:

1) Work done beyond 9 hours a day or for more than 48 hours in a week qualifies for extra wages for overtime. The hours calculations are for a week.

2) The work must be done inside the factory.

3) The overtime wage is at twice the normal rate of wage (meaning twice the gross wages).

4) Apart from some procedural compliance, the most interesting fact is that no overtime is allowed to be done unless exemption from working hours stipulations is obtained. If such an exemption is obtained, then within the norms of exemptions.

5) It is a common misconception that only workmen are eligible for overtime. Except for the exempted categories under Section 100, all others may technically be eligible for overtime, and the definition of a "worker" under the Factories Act does not distinguish between categories like the Industrial Disputes Act.

Similar provisions exist under the Shops and Commercial Establishments Act.

Always remember that the law stipulates the minimum. If an employer wants to do more than that, the law does not prohibit. Practices like single-rate overtime payment by agreements or with compensatory offs are not supported by any law.

Lastly, since both the acts mentioned here are establishment legislations, the subject of overtime is covered by no other act!

If you have any specific questions beyond this, please feel free to ask!

Best of luck,

Samvedan

October 4, 2005

Hi Sweta,

As you are aware, many CiteHR members have provided valuable insights, so I will not delve into the statutory details. However, I would like to emphasize a few key points:

1) Always ensure that approval and sanction are obtained before allowing overtime.
2) Maintain a proper information system for the distribution of overtime, with a tracking mechanism in place. If this process is not regulated correctly, it could lead to significant issues for all involved.

Regards,
SC

In the Indian government, employees are typically allowed to work for 50 hours in a quarter. However, you need to apply for permission beforehand. On the other hand, some retailers in the US and Europe may be willing to extend the limit to 70 hours in a month.

Dear All,

As far as my knowledge goes, we can differentiate between workers and staff based on the nature of work they perform. Those who are directly involved in production and perform manual work can be termed as workers. Overtime can be paid to them for their extra hours of work. On the other hand, those who are in supervisory roles and above, not directly engaged in production, can be termed as staff. It may not be necessary to pay overtime to such individuals.

Regards,
Ganesh

Overtime work is carried out depending upon exigencies of work. It is limited for regular shop employees in factories to a fixed number of hours, but essential departments like canteen, security, medical, water, safety, and others are exempted from limitations on overtime.

Executives are allowed to work overtime, but they are provided one day of compensatory leave for every 8 hours of overtime work they have done.

Regards,
Keshava

Hi, good afternoon to all.

I just wanted to know some of the practices followed by HR professionals in order to reduce the overtime money spent by the company. Can anyone help me?