PF Payment On Overtime

Dear All,
Whether PF deduction is applicable on Overtime. We have contract labour doing 12 hrs shift, As a current practice, we have been showing normal shift of 8 hrs & rest 4 hrs we have been showing as extra duties.
What contractor is doing that they have been showing this part as other allowance in the salary slip.
What is the currect way to go forward.
Regards
Ranjeet

OK! But i suppose that we have to pay overtime at double rate, which will increase all other expenses & heads. Please suggest how to tackle this.
Regards
Ranjeet

there is no way that one can escape liability of paying double overtime without esi deduction,but unfortunately maximum company are practicing paying single ot and that too with no esi deduction on it.
Regards
Atul

These types of increased burdens only making the contractors to make two types of paysheet one for actual payment and another for PF and ESI Submission purpose.
I do not know, when the Government will understand and negotiate with the organisations to maintain a single, correct and accepted by all type statutory records, by which some percentage of corruptions may come down.
Let us Hope in near future.

I know but currently in maximum company this practice has been prevailing.
It all depend on top mgmt, how they want to frame policies. Most of the company are now adopting cost reducing strategies.
Regards
Ranjeet

Dear All,
Pls. read minimum wages Act & Factories Act, You all will understand Why These Double OT rule had been established.
Pls. convince your Co. to pay Double OT and ESI amount on OT. Help in making india workmen live a better & healthy life.
Manish Gupta

we are the C & F of MNC companies last 5 years onwards. we are taking Ap & Shops Establishment Act licence from labour department for our premises wise.
But our MNC agreements showing as Contractor please give advise whether we have to apply Contract licence or AP & Shops Est Act and also give what types of wages we have to pay with break up of PF & ESI & PTand also 40,000 Gross salary may please give break up PF & PT.
If you have any Act please give reference for our use.
Thanks

The contractor is required to pay proper dues to the government and pay all statutory dues to the workers. The principal employer is responsible to make it happen. If this rule was not there, then every company would appoint someone to be a contractor and simply skip the statutory dues. The rules in this regard are in fact quiet fair and simple. Its time we stop crying about government rules everywhere. First look at what the employers are doing which necessitated such rules in the first place

Employing workers for 12 hours is against law. You may note that in case of OT exceeding 48 hours per month for an employee in any establishment, it indicates that there is a vacancy for a full time employee and the establishment is avoiding the same.
Shops and Establishment Act clearly specifies the number of hours an employee can be made to work per week. The contractor is not showing the salary for OT as part of the salary to escape from these complications. This is something that cannot be avoided in the present scenario.
If you are certain that the contractor complies to EPF, ESIC, Bonus etc. to all employees (which most contractors do not follow), then showing OT as additional allowances can be accepted by you though not legal.
Siva

Ot limit is 48 hours a quarter, not per month.
Actually, by not showing ot at ot but something else, when time records are available, you run the risk of later being asked to pay the actual ot again. All someone has to do is convince most workers to say they didn't get ot, and this allowance is for something else