How Should I Pay Employees Working on Holidays? Clarifying Wages, PF, and Bonus Calculations

Dear Friends, I need clarity on the payment of wages to employees working on National and Festival Holidays. We have 7 security guards and 3 utility operators working on these holidays in each shift. How should I make payment to them? Twice or thrice? As overtime or an additional present day? How will this reflect in payslips?

Will PF and Bonus be calculated on these payments?

Regards, Rajesh Hansrajani

Wages for working on any holiday should be at double the regular rate. This additional compensation should be treated like any other overtime wages. No PF or bonus will be applicable to this amount, but ESI deductions should be made and paid for the extra wages earned from additional work or overtime.

Rajesh, I need to clarify what Madhu said. You need to pay double rate (OT Rate) to the employees who are working on the national holiday. This is in addition to the normal salary that they would get for the day. Therefore, yes, you are paying them triple rate.

Please note that if the national holiday happens on a weekly off, then the person also gets a compensatory off within 3 days prior to or after that particular day.

OT payment gets excluded when computing PF and Bonus, but the amount he gets for that day (the original amount he would get if he was not working), that will be a part of PF, Bonus. ESIC is on gross payment, so that includes all.

The double average rate of wages includes the single rate already accounted for the paid holiday. The compensatory holiday is in addition to this.

Either an employee comes in to work on a festival holiday or a national holiday, it will count as overtime for their respective hours worked, and the holiday is considered a paid holiday. Therefore, they are eligible for overtime pay at double the rate of their normal wages.