12-Hour Shifts and Overtime: Can We Classify Extra Pay as Overtime for Compliance?

I want to know if an employee works a 12-hour shift, and their salary is ₹11,000 per month as per the minimum wage, but we are paying them ₹20,000 per month. Can we show the additional ₹9,000 as extra work or overtime amount?

Overtime Calculation and Compliance

You cannot arbitrarily apportion a portion to be overtime (OT) without proper permission, especially if you are referring to a factory setting. OT must be calculated at double the rate of wages for every hour worked beyond 9 hours per day or 48 hours per week. A 12-hour shift is not allowed anywhere. Even if it were allowed, the OT amount would still be Rs. 11,000, as an employee works for 104 hours (26X4), and at the OT rate of double wages, it equates to the same as the salary (26X8 = 208 hours). Although the figure sounds attractive, it falls short of complying with the proper calculation of OT wages.

Minimum Wages and Statutory Compliance

Abide by minimum wages and statutory compliance for 8 hours. Calculate the rate per day and per hour for the 8-hour wages calculated, then determine the hours of overtime worked. Convert the overtime pay into a daily rate and include any applicable compliances for overtime as well.

Overtime Payment Under the Code of Wages

The Code provides that if an employee works any day in excess of the number of hours constituting a normal working day, the employer must pay them for every hour or part of an hour worked in excess at the overtime rate, which should not be less than twice the normal rate of wages. An eight-hour working day is mandatory under the Code of Wages. There is no change in the working hours provision as provided under the Factory Act. Any other tinkering with wages will attract the adverse attention of the Factory Inspector and other labor officials. Please follow the law to the maximum to avoid adverse effects.

Sections 51, 54 to 56, and 59 of the Act state that under Section 59, if a worker works in a factory for more than 9 hours in any day or for more than 48 hours in any week, they shall be entitled to receive wages at twice their ordinary rate of pay for overtime work.

Thank you.

Overtime Calculation According to the Factory Act of 1948

As per the Factory Act of 1948, overtime (OT) must be calculated at double the rate of wages for every hour worked exceeding 9 hours per day or 48 hours per week. A 12-hour shift is not allowed anywhere.

If you require an employee to work extra hours, then you must pay them double OT and clearly mention this. It is illegal to do otherwise.

12-hour shifts and overtime regulations

12-hour shifts are not allowed anywhere. Special permission is mandatory for a 12-hour shift by an inspector in special conditions. Including overtime of 60 hours in a week is applicable. More than 60 hours are against the Government Factory Act.

It's my personal view: don't show overtime; show it as an incentive or special allowance and pay him.