Struggling with Employee Absences? How to Fairly Deduct Pay for Extra Leaves and Reward Overtime

Hi guys, Posting here for the first time, so not sure if I am posting in the right place. And sorry for a very long thread. I have a small private graphic company owned by me and have 3 employees as of now. Recently, I am getting very frustrated with the output of employees going down. They are taking too many holidays citing silly reasons like fever, going out of station, some important work at home. Till now, we have always tried not to deduct salaries of our employees if their reasons were genuine, trying to be a good employer. But I have realized employees tend to be employees; they just want their salaries at the start of the month and are not bothered where the money would come from if they take too many offs.

Implementing Strict Leave Policies

So now we want to put strict rules in the office regarding casual leaves. The point is to discourage them from taking extra holidays, maybe a way to pinch them hard whenever they take unnecessary breaks. We were just wondering how to calculate per hour wages of the employees (e.g., with a monthly salary of 15,000) so that every extra leave is deducted from their salaries and they think twice before taking leaves.

We have been really nice to them till now, but at the end of the day, the office is suffering, and they are not bothered.

Please guide me with this. Any other method to discourage them from doing this, as talking hasn't helped. I have done that 4-5 times.

Calculating Overtime and Bonuses

Also, how to calculate a bonus for working overtime. We work from 10 - 7 with a 1-hour lunch break whenever they want. Sundays are off. Also, sometimes they don't have work, and they leave early. Does that compensate for overtime? For example, if they worked an extra half an hour and then the next day left half an hour early, does that balance out? We generally work on Saturdays, but when the workload is not too much, we take a half day off. The idea is to compensate for their extra working hours if they have put in during the month.

Please advise me on this. Feeling totally frustrated with this now.

Thanks and cheers.

Please go through the link provided for information on overtime calculation. This link will give you an idea of the required calculation: CiteHR Overtime Calculation Guide.

Thank you.

Calculation of Hourly Wages

It's a simple calculation. In a month, calculate how many working days and the number of working hours per day.

Let's assume a person earns INR 17,600 per month, and their working days in a month (out of 30 days) are 22 days (after deducting 4 Sundays and 4 Saturdays, i.e., 30-8=22). Suppose the person works for 8 hours per day. The calculation would be as follows:
- INR 17,600 for 22 days, which means INR 17,600/22 = INR 800 per day.
- For each day (with 8 working hours), it is INR 800. Therefore, for each hour, it is INR 800/8 = INR 100 per hour.

So, the person's earnings per hour amount to INR 100.

Hope this explanation is clear to you.

Hi there,

Is there an act that defines the calculation of an hourly salary in India? My employer calculates it as (Annual Gross/(365 days x 8 working hrs), which seems very wrong to me. Please advise.