Understanding Overtime Limits and Exemptions Under the Factories Act: How Much is Allowed and How to Apply?

What is the maximum amount of overtime allowed as per the Factories Act in a month and in a quarter? How do we need to apply for Overtime Exemption, and how many hours will we get as an extension?

Please suggest.

Regards,
Yahappan

Overtime Regulations and Exemptions

There is no fixed maximum amount for overtime because it depends on wages; higher wages result in a higher overtime amount.

However, the Factories Act restricts the maximum hours an employee can work overtime to 50 hours per quarter. State amendments have increased this to 75 hours per quarter in most states. Once the OSHWC Code is enforced, it will become 125 hours per quarter.

You cannot obtain a permanent exemption from the provisions regarding hours of work or overtime. If you require more work hours than specified, you should employ additional workers to complete the work. Using the same workers for additional work, even with overtime compensation at double the ordinary wage rates, can affect their health. This is why the government restricts overtime hours. The Act states that "no worker shall be 'ALLOWED' to work..." beyond the specified hours. Employing more workers also generates more employment opportunities. Therefore, you will not receive an exemption from the Inspector of Factories and Boilers. However, practically, no Inspector will question you if any of your workers are allowed to work more than 50/75 hours in a quarter.

Dear Yahappan,

Maximum Overtime Allowed Under the Factories Act

The maximum amount of overtime allowed as per the Factories Act in a quarter is 50-54 hours. In exigencies, the factory can request the Chief of Factory and Boiler for an enhancement by some more hours. The authority may or may not allow this after studying the workmen's health and hygienic conditions.

Why More Overtime May Be Needed

Why do we need more overtime hours than the prescribed limit is a big question. The prescribed limit of OT hours was fixed at a time when most factories had poor technology, but now the scenario is completely different. In view of that, it is presumed either the factory runs with old machinery, there is low productivity of man and machines, or it is running with low manpower, which is a subject of study.

Exemption of Overtime

Why do you want an exemption of OT? OT can't be demanded and is controlled by management. It is a regulation that allows the factory to utilize the available manpower for extra hours of working in an exigency or emergency. Further, your management can form a policy or rule to curtail the overtime hours.

Understanding Worker Demands

Your post gives me an understanding that workers may be demanding OT as extra income; this is a common scenario across industries. The management needs to compensate if there is a low rate of payment. Therefore, you need to conduct a time study and motion study, both techniques used to improve work efficiency and productivity. If required, management can consider piece-rated wages. Hopefully, you have the reply.

Hi, Karnataka Factories Act Amendment 2023

6. Amendment of Section 65: In Section 65 of the Principal Act, in sub-section (3):

(i) In clause (iv), replace the words "seventy-five" with "one hundred and forty-four hours";

(ii) After clause (iv), insert the following:

"(v) A worker shall be required to work overtime subject to the written consent of such worker for such work."