Can Contract Staff Work More Days Than Us? Plus, Is Overtime Pay a Must for Saturdays?

We are a private limited trading company registered in Delhi under the Delhi Shop & Establishment Act. Can contract staff (employed through a third-party contractor) working six days a week have more working days than the principal employer (who works five days a week)?

Furthermore, is it compulsory to pay overtime to our junior staff (permanent employees) if they work on Saturdays occasionally, considering our company operates five days a week? My understanding is that since their salary is above the minimum wage and other benefits are provided, they are not entitled to overtime pay.

Please kindly advise us with relevant notifications.

Dear Sanjay,

The engagement of contract labor in an establishment is to carry out the incidental activities of the establishment only. If there is a necessity to carry out such work on an additional weekly holiday, over and above the normal holiday/weekly closure day fixed under any establishment-specific law applicable, you can do so if it is provided for in the contract. At the same time, as the Principal Employer, you should ensure that these contract laborers receive the minimum scale of weekly holiday fixed under the establishment-specific law applicable to your establishment.

Whether your company follows a 5-day or 6-day (normal minimum under any labor law) work pattern with 6.5 or 8 hours a day (normal statutory maximum) work schedule, you have to pay overtime wages for the excess hours worked beyond the fixed working hours. When your normal working hours per day are less than the statutory hours, you can't take shelter under that to deny overtime wages for the work done by the employees beyond the normal hours of work as required by the employer.

I think your understanding is based on a misunderstanding of sec.14 of the Minimum Wages Act, 1948, which deals with overtime. This section specifically addresses the payment of overtime wages payable to those employees paid at minimum rates of wages only. What it excludes from this section is only the particular type of employees whose wage rates are higher than the minimum wages. Therefore, this exclusion should not be misunderstood as a blanket exclusion from the payment of overtime wages to such employees. Rather, it implies that they should be paid overtime at the rate (whether it be higher or lower than the rate under sec.14 of the MW Act, 1948) fixed under any other law applicable to the establishment or as per the terms of the contract of employment in this regard.