Understanding Overtime Rules: How Do Consultancy Services and Hour Limits Apply?

Hello All, can someone please help me out with the laws and rules of overtime in any organization?

Consultancy Services and Overtime

Are consultancy services allowed, or should they adhere to the concept of overtime?

Specific Hour Limit for Overtime

Is there a specific hour limit for overtime?

Coordination of Overtime Hours with Regular Duty

Can the overtime hours be coordinated with the employee's 8 hours of duty?

Overtime should be paid at double the per-hour rate. I need your guidance on this. Thankful to all for the suggestions in advance.

Overtime Under the Factories Act

Working more than 9 hours per day or 48 hours per week (whichever is in favor of the worker) is considered as Overtime Work and is to be paid at double the rate of the ordinary rate of wages.

Example of Overtime Calculation

Let's take an example to understand the above. One worker has worked for 6 days in a week as follows:

- First day of the week: day off
- 2nd day: 9 hrs
- 3rd day: absent with pay
- 4th day: 11 hours
- 5th day: 8 hrs
- 6th day: 10 hrs
- 7th day: 11 hrs

The total hours of work in the week are 49 hrs. If we calculate OT based on the weekly 48 hours, the worker will get 1 hour OT at double the rate. However, in this case, the calculation will be different as follows:

- 2nd day: 9 hours single rate
- 4th day: 11 hrs - 9 hrs single & 2 hours double = 4 hrs
- 5th day: 8 hrs single
- 6th day: 10 hrs - 9 hrs single and 1 hr double = 2 hrs
- 7th day: 11 hrs - 9 hrs single and 2 hrs double = 4 hours

On a weekly basis, the worker will get 48 + 1 x 2 = 50 hrs payment. But on a daily basis, the worker will get - single - 9 + 9 + 8 + 9 + 9 = 44 hrs & double - 2 + 1 + 2 = 5 x 2 = 10 hrs. Therefore, the worker will get 44 + 10 = 54 hrs payment. In this case, the worker is a gainer for the daily rate OT calculation method, not on the weekly rate. The worker should be paid accordingly.

This is famously known as the single-hour daily basis OT Calculation.

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As well, check your state rules for OT hours for the day, week, and quarter. For example, in MP, 125 hours are allowed in a quarter, while in Karnataka, 145 hours in a quarter are permitted.