Covid 19 Lockdown period - management changing practice of giving 4 hours OT daily ( Monday to Saturday) to all employees

Dear Experts,

We have around 100 laborers in our organization in Karnataka. In our company, there is a practice of giving 4 hours of overtime daily (Monday to Saturday) to all employees. This practice was established by our former management. The current management has decided to provide only a salary (Basic + DA + HRA + Special Allowance) and is not willing to pay for the 4 hours of overtime to all laborers during this lockdown period.

However, there is now a threat that the laborers will file a case against the company, citing the payslip which shows 4 hours of overtime per day, amounting to 24 hours weekly and 96 hours monthly.

Kindly advise on how to handle this situation.

Dear Palani,

Over time wages are payable only when the employee is required to work beyond his normal working hours. During the entire period of lockdown, if the employees are not required to work at all or are only required to work from home during normal working hours, overtime wages cannot be claimed. This is entirely wrong and goes against the relevant provisions of the law. Therefore, simply ignore such threats.

In the future, ensure strict compliance with the provisions of the law relating to overtime work.

Thank you.

Was overtime being paid by management daily without actual work? What are the limits for OT in Karnataka? 75 hrs per quarter? On paper, a violation is being shown. This is where HR comes into the picture of advising compliance with labor laws, maximum OT hours, etc.

For how long has this practice of OT been going on? This kind of payment becomes difficult to stop when it has been going on as a practice. Tactful handling of the issue is important as management can face trouble from employees who are used to higher salaries and from the factory inspector who will point out violations of laid down maximum OT hours.

There is no obligation at all on the part of the management to pay overtime wages when overtime work is neither assigned nor performed.

Dear Colleague,

You have been giving daily overtime of four hours to all workmen by disregarding statutory limits. However, on the other hand, requiring workmen to work overtime within the bounds of legal provisions is management's right. At the same time, workers cannot claim overtime as a matter of right, especially when no actual overtime hours are being worked.

In my view, workers' contention in this regard will not stand the test of law. Any dispute at hand will have to be resolved amicably through discussions across the table.

Regards,
Vinayak Nagarkar
HR and Employee Relations Consultant

Dear Palani,

If you have been paying an extra four hours for the normal working of 8 hours, it is nothing but a part of the wages package of the employee. The amount shown as overtime will not be absolved by your theory.

You have to pay the full amount (Basic + DA + HRA + Special Allowance + OT), not just (Basic + DA + HRA + Special Allowance).

It is better to resolve the matter by discussing it with the employees. You will have no option left if the matter escalates to legal action due to gross negligence. You will be unable to produce records for overtime hours from past periods. In the current situation, most of your employees will likely agree with the management's decision if they are taken into confidence.