OT Calculation-for Factory Employees

Dear Readers,
Our company comes under Factory Act.
We pay overtime to employees who are working in plant if they work for more than 8 hours 30 minutes.
I read many threads related with OT but still I am confused whether it is 1.5 times or 2 times & also please clarify whether we have to calculate with gross salary or basic salary.
What if they work on any National or Public Holiday.
Thanks & Regards

Dear Mndhar,
Kindly noted the calculation for Overtime is based on minimum wages rate of State and its twice of normal rate.

Mandhar
Please read section 59 of Factories Act and the rules made under it by the TN state.
Varghese Mathew

Dear
overtime will be paid twice of normal rates of gross wages not basic

hi Dheeraj How r u ?
this is O.B.Gautam From Rudrapur. in same line i am agree with Dheeraj but i want to add one more ' double ot is payable only when any employee has work 48 hours in a week. if any employee has not completed 48 hours in a week then he is not liable to pay twice wages of normal rate.

Dear Mandha,

Section 59 of the Factory Act,1948 clearly stipulates that where a worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of TWICE his ordinary rate of wages.

The "ordinary rate of wages" means the basic wages plus such allowances, including the cash equivalent of the advantage accruing through the concessional sale to workers of food grains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages for overtime work.

In relation to your another query as to what if they work on any National or Public Holiday in concerned, you need to refer to Factory Rules of your state but as a common practice overtime at the rate twice of his wages is paid on Public Holiday whereas overtime at the rate twice of his wages is being paid on National Holiday besides a day's compensatory off.

BS Kalsi

Member since Aug 2011

Thanks to all of you.
Please one more clarity is required-what is the normal working hours in a day,its 8 hours or 8 hour 30 minutes.
Last time when there was an inspection in our factory,they said there is upper limit for overtime also.No any employee is supposed to work beyond it so please let me know what is the upper limit for overtime.

Dear Mandhar,

working hours in a day is depend on company structure. it means if you industry comes in continuous process the duty time would be 08:00 hrs. because in continuous process production would be never stopped. so for 08:00 hrs ( including 02 tea breaks & 1/2 hours for lunch). in such type of plant in lunch time 01st operator will go for lunch and second will take the charge for machine and when first will come then second will go, so due to this production could not suffer and remain continuous.so there are the shift time are as below-

A shift = 6:00 -14:30, 07:00-15:30, 08:00 - 16:30

B Shift= 14:30-23:00, 15:00- 23:00, 16:00- 24:00

C Shift = 22:00 - 06 (next day) , 23:00- 07:00 (next day),24:00 - 08:00 (next day)

if your industry do not come in Continuous process then duty Hours should be 08:30 or 09:00 Hrs. depend on breaks which provide between the duty time. because in this type of industry in lunch time most of company close their production and employee take their lunch in that time.

so shift time may as below-

if lunch time is given for 1/2 hours.

A shift = 6:00 -14:30, 07:00-15:30, 08:00 - 16:30

B Shift= 14:30-23:00, 15:30- 24:00, 16:30- 25:00

C Shift = **23:00 - 07 (next day) , 24:00- 08:00 (next day),25:00 - 09:00 (next day)

(** C shift is only for 08 hours as no any employee has taken their dinner, everybody come from home after got food.)

Overtime provision is a provision to restrict engagement of workmen after they have worked for the scheduled working hours. As such it should not be treated as a right of employer that he can ask the workers to do overtime by spending an amount, say double the wages, in return but it should be taken as an attempt to restrict such employment beyond a certain hours. That is why there have been put under the Factories Act an obligation to pay wages at double the ordinary rate for the overtime work and to restrict the number of hours of overtime per a quarter to 50 hours. In some state amendments the number of overtime permitted over a quarter is 75 hours.

As per Factories Act the overtime payment at double the rate of wages is to be paid if one person is asked to work beyond 9 hours in a day or 48 hours in a week. That means, if he works for more than 9 hours in a day, he should get OT wages for the hours exceeding 8 hours and it should not be taken for the hours exceeding 9 hours. In companies which work for less than six days in a week the number of hours per day may increase whereas the number of hours per week will be less than 48 hours and in such cases it will be the number of hours per day and not the number of hours per week the factor deciding overtime payments. In such cases it will be actual number of hours per week, that is the number of hours as per conditions of service, that will be taken as cut off point to decide whether one has worked overtime or not. In the Indian Oxygen Ltd. Vs Their Workmen (1969-I LLJ 235 : A.I.R. 1969 S.C. 306), it was observed that 38 hours per week is a condition of service and any work done over and above 38 hours should be treated as over time work and in this exercise the concept of 48 hours has no implication. Similar verdict was given in Philips India Ltd Vs Labour Court, Madras and others.

Normal working hours for companies that work for 6 days a week is 8 hours excluding the interval (s) of rest. The spread over of work including intervals of rest should not exceed 10 hours and 30 minutes.

Regards,

Madhu.T.K

Dear All,
Can you please clarify me as per Factories Act for Tamil Nadu Government, what will be the compensation for working on National and Public holidays.
I tried to refer factories act but could not get the calculation part, they have mentioned that employer can ge the work done from employees even on National and Public Holidays which should be compensate in future.
Please guide me
Regards
Mandhar