Understanding Overtime Pay: Which Salary Components Are Covered Under the Factories Act of 1948?

Overtime Payment According to the Factories Act of 1948

As per the Factories Act of 1948, on which of the following salary heads should overtime be paid?

Salary Heads:
1. Basic
2. Variable Dearness Allowance (VDA)
3. Fixed Dearness Allowance (FDA)
4. House Rent Allowance (HRA)
5. Conveyance Allowance
6. Bus Transport Allowance
7. Washing Allowance
8. Adhoc Allowance
9. Special Allowance
10. Shift Allowance

Regards,
Bharat

It will come under the following salary heads:

1. Basic
2. Variable Dearness Allowance (VDA) (I have a little bit of doubt)
3. Fixed Dearness Allowance (FDA)

Best Regards,
Dash

Calculation of Overtime Pay

The overtime (OT) is to be paid on Basic + Dearness Allowance (DA) + Variable DA. The method to be followed for calculation is to determine the total of the above for one day. Suppose OT hours in a particular month are 24 hours, then OT payable would be 48 hours, which equals 48/8 = 6 days. The concerned worker has to be paid 6 days' wages based on the above calculation.

Please read carefully the definition of wages in the Factory Act. The overtime (OT) has to be paid on all components of wages, whatsoever it may be. We sought the opinion of prominent lawyers on this.

Regards,
K.K. Choudhary

Dear All,

Overtime Payment as per the Factories Act of 1948

As per the Factories Act of 1948, on which of the following salary heads should overtime be paid:

1. Basic
2. Variable Dearness Allowance (VDA)
3. Fixed Dearness Allowance (FDA)
4. House Rent Allowance (HRA)
5. Conveyance Allowance
6. Bus Transport Allowance
7. Washing Allowance
8. Adhoc Allowance
9. Special Allowance
10. Shift Allowance

Regards,
Bharat

Considerations for Allowance Inclusion

Regarding the list provided, the inclusion of both Conveyance Allowance and Bus Transport Allowance may lead to ambiguity. It is advisable to review any settlement agreements in place to ensure clarity in such cases. Courts may question the purpose of having two allowances of similar nature, potentially leading to complications.

Excluding House Rent Allowance (HRA) and Washing Allowance from overtime payment considerations is logical, as these allowances are fixed and not related to overtime work.

Night Shift Allowance and Overtime

For Night Shift Allowance, if an employee is required to work overtime beyond the specified night shift hours, the allowance should be paid as a single amount.

Regards,
T. Sivasankaran