Understanding EPFO Overtime Rules: How Much is Allowed and What About EPF Contributions?

As per EPFO, how much overtime is authorized per day/monthly? Are there any parameters to consider while verifying the salary sheet? Secondly, if the employer pays double for the overtime hours, is it exempted from EPF contribution? For a Building Construction Company, is there anything special regarding overtime components?

Regards,
MK Verma

As far as my knowledge is concerned, it should not exceed 50 OT hours in a month.

EPFO has no concern with overtime. PF is not deducted on overtime. Exemption, i.e., exclusion from PF, is based on the rate of Basic plus DA component for eight hours of work.

Thank you.
Regards

Firstly, overtime is not related to EPF; there is no deduction/contribution for overtime payment.

Overtime Regulation

Secondly, overtime is governed by the Factory Act, 1948, not the EPF Act, 1952. It should not exceed 50 hours in a three-month period. This is for your information.

Regards,
Kapil Rathore
MBA - HR, Labour/Factory Law
[Phone Number Removed For Privacy Reasons]

Korgaonkar K A is correct that EPF only concerns basic salary, dearness allowance, and food concession, if applicable, rather than any other allowances.

Thanks & Regards,

Sumit Kumar Saxena

There are no stipulations regarding overtime work in the EPF Act. PF contributions are not payable on overtime earnings. Overtime regulations can be found in the Minimum Wages Act, Factories Act, Shop & Establishment Act, etc., but the EPF Act does not specifically address overtime.

Overtime Provisions for Building Construction Companies

Regarding your query about the provisions of overtime components for a Building Construction Company, there are no limitations on overtime work under the BOCW Act. However, the Act stipulates that when a building worker exceeds nine hours in a day or works more than forty-eight hours in a week, they are entitled to wages at double the ordinary rate for the additional hours worked.

Regards,
BS Kalsi
Member since Aug 2011

As per the Factories Act, the maximum limit for overtime (OT) is 50 hours per quarter, and it does not attract PF contribution from the employer.

Thanks & Regards,
A. Ravichandran

If overtime is not being paid at a double rate, then EPF contribution is required for those who are EPF members.

Secondly, daily 5 to 6 hours of overtime is authorized.

Regards,
MK Verma

Mr. A. Ravichandran is indeed correct. According to the Factories Act, only 50 hours of overtime are allowed in a quarter.

Regards,
Madan
Delhi

Dear Sh Vermaji, you are getting confused with the PF contribution on the deductible part of the wages/salary of an employee. Sh Shailesh Parikh has rightly mentioned that for the purpose of EPF contribution, the “Pay” includes basic wages with [dearness allowance, retaining allowance (if any)], and the cash value of food concessions admissible thereon. I have understood your query, which contains two parts: how to treat his salary on a particular day when somebody is put on overtime. The PF contribution will be payable on one's ordinary rate of wages on that particular day but not on his overtime wages earned by him. We can't agitate on the stipulations of overtime given in various enactments unless the same are amended through the policy framework of the Govt of India.

BS Kalsi
Member since Aug 2011
attribution https://www.citehr.com/458149-maximu...#ixzz2RMHpPqrv

I am enclosing herewith a newspaper clipping from Mint dated April 19, 2013, for the information of the members. The Labour & Employment Ministry, Government of India, has constituted a Committee that has submitted its report favoring the clubbing of all components except HRA, overtime, bonuses, and commission to be considered as part of the salary under the PF Act. This move will result in employers contributing more to EPF accounts of the employees. The Ministry is also contemplating facilitating online transfer and withdrawal of PF accounts of the employees in the near future.

Regards,
BS Kalsi
Member since August 2011

Mr. Verma,

PF is calculated on BASIC + DA + CASH VALUE FOR FOOD. According to the Factory Act 1948, the total working hours in a week, including overtime hours, should not exceed sixty, and the total overtime hours in a quarter should not exceed 50.

Unlike the Factories Act, the BOCW Act does not provide any limit on overtime work laid down therein. However, Section 29 of the Act has prescribed the wages for overtime work. It stipulates that where any building worker is required to work on any day in excess of the number of hours constituting a normal working day, he shall be entitled to wages at the rate of twice his ordinary rate of wages. The Delhi Rules provide that no building worker employed in building or other construction work shall be required to work for more than nine hours a day or forty-eight hours a week.

Regards,
BS Kalsi
Member since Aug 2011