Is Our Wage Period from the 26th to the 25th Compliant with Labor Laws?

Dear Sir/Madam, In our factory, we disburse wages on the 1st day of every month by running the payroll on the 25th day of the preceding month. The wage period and attendance will be considered from the 26th to the 25th (not from the 1st to the 30th) for calculating overtime and daily wages. Is this correct as per labor law? If not, please provide me with a clear interpretation of the labor law rules and sections.

Regards,
Nayazudeen

What you are doing is right. But if you want to change it on a calendar month basis, the wage payment should be made in accordance with the Payment of Wages Act, 1936:

Payment of Wages Act, 1936

"When less than 1000 persons are employed, payment shall be made before the expiry of the 7th day of the following month. When more than 1000 workers are employed, payment should be made before the expiry of the 10th day of the following month {Section 5}."

"Sec 4 (2) states that no wage-period shall exceed one month."

Regards,
S. Sethupathy
Excellent HR Services
Erode

Thank you for your reply. I have noted your point. If I proceed with the current calculation (26th to 25th), then how do I need to calculate overtime and loss of pay? (Assume 26th to 30th is June 2011 and 1st to 25th is July 2011). If I take the OT and LOP from these periods, then the calculation will vary. I think you understood my query. Please clarify what exactly the act says for us to follow for factory workers.

Dear Nayazudeen,

I understand your problems. For 25/6/11 to 31/6/11, you have to calculate OT and LOP on a 30-day basis, and for 1/7/11 to 25/7/11, you have to calculate on a 31-day basis, right? You can adopt a rule of the majority, i.e., 31 days for all in this example and again 31 days for the next period from 26/7/11 to 25/8/11 (because August also has 31 days). For 26/8/11 to 25/9/11, it will be 30 days, and so on.

You can explain this method to all (employees, union leaders, etc.).

Regards,
S. Sethupathy, Excellent HR Services, Erode.

Dear Nayazudeen, I was making the billing for security for the cycle from the 26th to the 25th date, and I used to count the number of days in that cycle to calculate the wages accordingly. For example, 26/5/11 to 25/6/11 means it will be a 31-day month, 26/6/11 to 25/07/11 means a 30-day month, 26/2/2011 to 25/3/11 means it will be a 28-day month, and 26/2/2012 to 25/3/2012 means obviously it will be a 29-day month. Hence, there will not be any problem.

For the calculation of PF remittance, you have to make the Paysheet summary from the 1st to the 30th or 31st of the month. We cannot carry forward the PF for the next month; it will always be for the current month. For example, from 01/2/2011 to 25/2/11, it will be 31 days, and from 26/2/11 to 28/2/11, it will be 28 days for calculation and the remittance to be submitted. From 01/3/11 to 25/3/11, it will be 28 days, and from 26/3/11 to 31/3/11, it will be a 31-day calculation.

Thank you.