Understanding Overtime Pay: How Should 100 Extra Hours Be Compensated?

Dear Experts,

One of the employees' salaries is 6000/- per month for 30 days, which means Rs. 200 per day for 8 hours. It amounts to Rs. 25 per hour. I have a query: if this employee does 100 hours of overtime in one month, will only 2500 be paid for overtime as per the terms of employment, or is there a specific payment rule for overtime?

Please revert.

Regards,
Rohit Jain

Definitely, there are rules for double payment if a worker stays on overtime. For example, the monthly salary is 6000/-, daily rate is 200/-, and hourly rate is 25/-. When paying double, the calculation for overtime will be 25 x 2 = 50/- per hour. Therefore, the amount for 100 hours will be 5000/- respectively.

Even though the formula for the calculation of overtime wages given above is correct, you cannot extract overtime work the way you like without adhering to the legal limit fixed on the total number of working hours in a day, week, or month as stipulated in the establishment-related law applicable to your establishment, such as the Factories Act, 1948, Shops and Establishment Act, Motor Transport Workers Act, 1961, and the like.

Please ensure compliance with the relevant laws to avoid any issues regarding overtime work.

Payment of Overtime will be after working beyond 9 hours in a day or 48 hours in a week (This work will be beyond your normal work). As per the Factories Act, they have to pay double (twice the wages). Your normal wage rate per hour is Rs. 25. You worked for 100 hours as overtime. Therefore, you are entitled to Rs. 25 x 2 = Rs. 50 x 100 = Rs. 5000/-.

Respected sir,

As you have pointed out, OT will be considered if working hours exceed 9 hours per day or 48 hours in a week.

However, we work 6 days a week from Sunday to Saturday. If we calculate 48 hours over 6 days, it equals 8 hours per day. Based on this calculation, OT should be considered after working beyond 8 hours instead of 9 hours.