Understanding Working Hours and Overtime Rules Under the Factory Act: Need Clarification on 4, 5, and 6-Day Week Structures

Dear Seniors, Please help me with my confusion related to the working hours as per the Factory Act: 48 hours is the maximum limit for a one-week work capacity. Employers are flexible to choose this work time and make it available in a 4-day, 5-day, or 6-day week structure.

1) In a 4-day week structure, 12 hours are spread over, where working hours are 5 hours of work, 0.5 hours of rest, 5 hours of work, 0.5 hours of rest, and 1 hour of work. In this system, if a worker exceeds 12 hours but not more than 30 minutes, is he eligible for overtime?

2) What will be the working hours for the 5-day and 6-day week structure? What will be the overtime rule in both cases?

3) What is the percentage of basic pay? Is it 50% of CTC or gross salary?

Thank you.

As per the present Factories Act, you cannot work four days in a week. The formula is simple: as per the Factories Act, you cannot work more than 48 hours in a week and 9 hours in a day. If you work 4 days in a week, you can work a maximum of 36 hours in a week. If you work 5 days in a week, then you can work for 45 hours in a week. Just wait for the new code implementation where these provisions will be allowed.

In respect of establishments that operate for 5 days or 4 days, the concept of overtime wages for work exceeding 48 hours will not be applicable. In such situations, any hours exceeding the prescribed hours per week will qualify for overtime. Please refer to Philips India Ltd vs Labour Court, Madras & Ors (1985 AIR 1034) attached.

Basic Salary and Minimum Wages
The basic salary should not be less than the sum of the salary fixed by the government as minimum wages. Any percentages on gross salary designated as basic salary commonly found in HR groups are merely creations of HR personnel and hold no legal standing.

Working hours are a maximum of 8 hours, totaling 48 hours, with an additional 1 hour or 0.5 hours provided for lunchtime. There is no provision in the Factory Act for 4/5 days working in normal conditions; it is on a weekly basis. Daily wages and basic pay are fixed as per the Minimum Wages Act. For CTC employees, you can consider a basic of 50%.

Reply to your query no. 1 - As per the Factories Act, any work beyond 48 hours in a week or 9 hours per day will be eligible for overtime (OT). In the new labor codes, the concept of 9 hours per day has been removed. Therefore, after the implementation of the new labor codes, any extra work beyond 8 hours will be applicable for OT. Essentially, working continuously for 12 hours is not feasible as it would breach the total allowable OT hours per quarter, leading to increased chances of accidents, reduced quality, and lower productivity.

Reply to your query no. 2 - In the case of a 5-day week, the maximum work hours are 45 (5 days * 9 hours), and any work exceeding 9 hours per day will be eligible for OT as per the current Factories Act. For a 6-day work week, there are no issues, and OT will be based on 48 hours per week or 9 hours per day, which is advantageous for the workers. Under the current system, if a worker works for 5 days out of 6 and works for 10/11 hours for 2/3 days, the concept of 9 hours per day will apply, with the 9th hour paid at a regular rate and anything beyond that at double the OT rate.

Reply to your query no. 3 - It appears that your query is related to the definition of wages under the new labor codes. It is neither Gross Salary nor CTC but is 50% of the total remuneration calculated according to the definition of wages under the new labor codes. Total remuneration equals Basic & DA and allowances paid as per the exclusion list of the definition of wages (a) to (i). Essentially, it includes all payable amounts, excluding items like Mediclaim insurance premium, EC policy premium, Group LIC Policy premium, etc.

Regards, S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons] www.usdhrs.inn