Overtime Confusion: Are We Calculating Extra Hours Correctly?

Overtime Calculation Inquiry

I would like to know how to calculate overtime. For example, the shift time is from 08:30 a.m. to 5:00 p.m., including a half-hour lunch break and two tea breaks of 10 minutes each.

Now, if someone arrives at 7:00 a.m. at our request and leaves at 6:00 p.m., we are currently paying them 2.5 hours of overtime. Is this the correct process, or should we consider only 1 hour?

Best regards,
Parimal

I presume your working hours are 8.30 hours per day, including the lunch break. If that is the case, any employee who works more than 8 hours per day (excluding the lunch break) is eligible to get their overtime paid. So, in your case, yes, you are right that you would have to pay him 2.5 hours of overtime daily.

Question About Shift Duties

But, one question arises: if you have fixed shift duties, why is an employee coming in early? Is he doing it every day as a routine? If so, I guess you need to have his Head of Department justify why.

Just because an employee is happy to come in early and stay late does not automatically mean that management should pay for the overtime. However, if there is justification that productive work is being done, then there is no harm in paying and approving such overtime.

Regards,
Ukmitra

Overtime Regulations Under the Factories Act 1948

As per Section 54 of the Factories Act 1948, no worker is allowed to work more than 9 hours in a day. However, as per Section 56, the spread-over limit is 10.5 hours per day. This means the overtime permitted is 2.5 hours in a day only. Overtime refers to working over and above the normal working hours or shift.

In your case, an employee cannot leave before their shift timings unless permitted to do so. In that case, Section 54 will be applicable.

Regards,
M.N. Sahu
GM (HR)

The employee is not coming on a routine basis; they are coming early only in special cases with the HOD's approval, which we are considering as extra time.

Best regards,
Parimal