Overtime Pay in BPO: How Do You Calculate Weekday Rates?

Hi, how do I find the guidelines for overtime pay in the private sector/BPO industry? I understand it is 1.5 times for the weekend, but how do I calculate the hourly rate for overtime during the week?

All help is appreciated.

Thanks!

BPO Industries and the S&E Act

BPO industries are covered under the S&E Act of the State. Accordingly, the calculation of overtime (OT) and payment terms will be determined.

Determining Per Hour Salary/Wages

Now the question is how to determine per hour salary/wages. I hope the organization is paying on a monthly basis. In that case, the monthly salary may be divided by 30, 31, 28, or 29 as the case may be, or by 30 only. There are organizations that follow the formula: monthly salary x 12 / 365 to calculate the per day salary. In all the above cases, the daily salary may be divided by 8 to obtain the per hour salary. There is no specific rule in this regard. It depends on the company's policy.

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

Thank you for the clear response. Is overtime calculated on all components of the monthly salary, including HRA and allowances, or just Basic?

Thanks

Overtime Pay Guidelines

Shop and Establishment Acts mostly require that overtime be paid for anyone working beyond 9 hours in a day or 48 hours in a week (whichever is exceeded first). I have no idea where you got the 1.5 times figure.

Calculating the Hourly Rate

In order to compute the hourly rate, take the monthly rate and divide by 26 to get the daily rate, then divide by 8 hours to get the hourly rate. This is as per certain court guidelines in other acts that made 26 days as standard working days for every company. You can divide by 30/31 or other methods if you can justify the same, but dividing by 26 is safer. The difference is not significant in most cases.

Hi SKR,

Please refer to the TN government's Shops and Establishment Act for this purpose. Refer to Section 31 of Chapter VII - Wages. Copy attached. Wages for overtime work—Where any person employed in any establishment is required to work overtime, he shall be entitled, in respect of such overtime work, to wages at twice the ordinary rate of wages. Also, refer to Rule 10 of the TNSE Rules, 1948 attached.

Rule 10: Manner of calculating the ordinary rate of wages

For the purpose of the Explanation to Section 31, the ordinary rate of wages per hour shall be calculated by dividing the total wages payable to a person employed for the hours actually worked by him during the wage-period by the number of such hours in the wage-period. It is provided that hours worked by a person employed in excess of the normal daily hours during the wage-period shall be excluded in calculating the number of hours actually worked by him.

Please review the attached documents for detailed information.

Thank you.