I am working in a manufacturing company. In the quality department, there are employees who are coming for a complete 31 days and also staying for extra hours. We are not paying any overtime to these employees. Please let me know how they can benefit.
Waiting for a reply,
Swati
From India, Bhopal
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Waiting for a reply,
Swati
From India, Bhopal
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Dear Swati,
They can benefit by paying double for overtime. If you are not willing to pay for overtime, it would be better to ask them what they want.
Regards,
R.N.Khola
(Labour Law & Legal Consultants)
09810405361
From India, Delhi
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422They can benefit by paying double for overtime. If you are not willing to pay for overtime, it would be better to ask them what they want.
Regards,
R.N.Khola
(Labour Law & Legal Consultants)
09810405361
From India, Delhi
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u can pay double rate of pay /hr or u can make it as incentives. if u r showing as OT then it should be accoring to statutory. if u want to avoid statutory things u may pay it as incentives.
From India, Bangalore
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From India, Bangalore
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Dear Swathi,
I do not know how much experience you have in HR because you did not mention how many hours the employees are working. One or two hours are not enough time to warrant paying for overtime; this is a general practice. The main concern here is whether you are the Head of the HR department. If you are, discuss with your management the implementation of an overtime system. Otherwise, consider leaving it as many employers aim to extract more work from employees without compensating for overtime. If you convey this to your employees, you may face challenges from your employer.
Thank you.
From India, Visakhapatnam
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I do not know how much experience you have in HR because you did not mention how many hours the employees are working. One or two hours are not enough time to warrant paying for overtime; this is a general practice. The main concern here is whether you are the Head of the HR department. If you are, discuss with your management the implementation of an overtime system. Otherwise, consider leaving it as many employers aim to extract more work from employees without compensating for overtime. If you convey this to your employees, you may face challenges from your employer.
Thank you.
From India, Visakhapatnam
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Hey Swati,
You are opening Pandora's Box... I would like to work under you... :) Jokes apart. I would term such QC employees as good, honest, and dedicated workers and reward them appropriately during their appraisals. Overtime should always be linked with productivity. If they are productive, for example, if their presence in QC helps the production department increase production, please follow the OT rules of the Labor Act.
Regards,
ukmitra
From Saudi Arabia, Riyadh
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You are opening Pandora's Box... I would like to work under you... :) Jokes apart. I would term such QC employees as good, honest, and dedicated workers and reward them appropriately during their appraisals. Overtime should always be linked with productivity. If they are productive, for example, if their presence in QC helps the production department increase production, please follow the OT rules of the Labor Act.
Regards,
ukmitra
From Saudi Arabia, Riyadh
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Hi,
First of all, please analyze why they are working throughout the month. If it is due to procrastination or inefficiency, then paying overtime (OT) or compensatory time off (comp off) cannot be recommended. Moreover, continuous work will affect the health and work-life balance of the employees in the long run. Hence, working throughout the month or stretching the office hours cannot be appreciated.
If they are working for the benefit of the company or to meet targets during a crisis, then comp-off and special incentives can be provided.
From India, Madras
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First of all, please analyze why they are working throughout the month. If it is due to procrastination or inefficiency, then paying overtime (OT) or compensatory time off (comp off) cannot be recommended. Moreover, continuous work will affect the health and work-life balance of the employees in the long run. Hence, working throughout the month or stretching the office hours cannot be appreciated.
If they are working for the benefit of the company or to meet targets during a crisis, then comp-off and special incentives can be provided.
From India, Madras
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Hi Swati,
If these employees are "Workmen" by definition, I suggest you go by the rule book on that one. If not, then link it to productivity. You can link productivity for the employees who are "Workmen" also, but that will be in the larger picture of collective bargaining.
Attaching benefits to OT is a tricky matter. You must be clear that the OT is due to reasons of business and not due to reasons of inefficiency or 'additional income' mindset that some employees may have.
Regards,
Capt Tapas
From India, Mumbai
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If these employees are "Workmen" by definition, I suggest you go by the rule book on that one. If not, then link it to productivity. You can link productivity for the employees who are "Workmen" also, but that will be in the larger picture of collective bargaining.
Attaching benefits to OT is a tricky matter. You must be clear that the OT is due to reasons of business and not due to reasons of inefficiency or 'additional income' mindset that some employees may have.
Regards,
Capt Tapas
From India, Mumbai
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Hi, is OT only for operator or it is general for all. I mean supervisor, engineer, managers, executives etc. OT can be paid for minimum how many hours.
From India, Bangalore
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From India, Bangalore
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Dear Swati,
If the nature of work is routine operation and not covering up the backlog of work, then the employee is entitled to overtime. You can categorize the employees into three groups, which will make things very transparent and clear. Employees from Workers to Supervisors as Group I, Junior Officers to Officers as Group II, and the rest of the cadre as Group III.
You can establish that Group I employees are eligible for overtime. You can set a minimum number of hours at 2 for eligibility for overtime. Payment can be either single or double the overtime rate.
For Group II cadre employees, you can specify that they will not be paid overtime but can be compensated for their extra hours of work with compensatory time off. A minimum of 2 hours of work should be required, and the total hours can be accumulated, with eligibility for a day off against every 8 hours worked.
Group III cadre will not be entitled to any benefits as they fall under the category of Senior Officers and above.
These are the broad guidelines I wish to suggest to you.
Regards,
Rameshbala
From India, Hyderabad
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If the nature of work is routine operation and not covering up the backlog of work, then the employee is entitled to overtime. You can categorize the employees into three groups, which will make things very transparent and clear. Employees from Workers to Supervisors as Group I, Junior Officers to Officers as Group II, and the rest of the cadre as Group III.
You can establish that Group I employees are eligible for overtime. You can set a minimum number of hours at 2 for eligibility for overtime. Payment can be either single or double the overtime rate.
For Group II cadre employees, you can specify that they will not be paid overtime but can be compensated for their extra hours of work with compensatory time off. A minimum of 2 hours of work should be required, and the total hours can be accumulated, with eligibility for a day off against every 8 hours worked.
Group III cadre will not be entitled to any benefits as they fall under the category of Senior Officers and above.
These are the broad guidelines I wish to suggest to you.
Regards,
Rameshbala
From India, Hyderabad
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Dear Swati,
You have to pay O.T (Double) if your company is not paying O.T. Then your company can give Compensatory Off (C-Off) and your company will pay a performance award which is calculated based on O.T hours. For the performance award amount, you are not responsible for maintaining any registers or records.
Praveen Singh
Mob. 09893900197
From India, Bhopal
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You have to pay O.T (Double) if your company is not paying O.T. Then your company can give Compensatory Off (C-Off) and your company will pay a performance award which is calculated based on O.T hours. For the performance award amount, you are not responsible for maintaining any registers or records.
Praveen Singh
Mob. 09893900197
From India, Bhopal
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Dear Swati,
Hi,
I also agree with Rameshbala. First, you need to establish the internal policy and categorize the groups. Then, you can set the salary for specific positions such as manager, supervisor, executive, and provide incentives. It is important to note that the government has not clearly defined who qualifies as a workman.
Regards,
Brijesh Saxena
From India, Gurgaon
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Hi,
I also agree with Rameshbala. First, you need to establish the internal policy and categorize the groups. Then, you can set the salary for specific positions such as manager, supervisor, executive, and provide incentives. It is important to note that the government has not clearly defined who qualifies as a workman.
Regards,
Brijesh Saxena
From India, Gurgaon
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Hi Swati,
It appears there is no HR in your organization, and you are in a position to persuade the management, in this case maybe a one-man show, to extend some benefits to the workers. First, you should go for a weekly rest for every employee. It will not only improve the efficiency of these unorganized workers but also ensure legal compliance. The workers up to the Supervisor level, a middle grade of all staff, should be given a lump sum extra monthly allowance, considering their wages, and staff above the Supervisor level may be provided with a flexible working schedule. They may also be considered for compensatory time off (COMP. OFF) based on the merit of the case.
With regards,
R.K. Singh
From India, Delhi
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It appears there is no HR in your organization, and you are in a position to persuade the management, in this case maybe a one-man show, to extend some benefits to the workers. First, you should go for a weekly rest for every employee. It will not only improve the efficiency of these unorganized workers but also ensure legal compliance. The workers up to the Supervisor level, a middle grade of all staff, should be given a lump sum extra monthly allowance, considering their wages, and staff above the Supervisor level may be provided with a flexible working schedule. They may also be considered for compensatory time off (COMP. OFF) based on the merit of the case.
With regards,
R.K. Singh
From India, Delhi
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Dear All,
The increments for the year 2009-10 unfortunately got delayed but have been declared now. As committed to all employees, a Performance incentive has been given to select few employees who have demonstrated exceptional progress and growth and have aspired to develop competent and responsible professionals.
In addition to the above, we have also decided that we shall be releasing annual awards to our upcoming ‘stars' at TAL with effect from this year. This is my personal initiative and has been taken to recognize, reward and applaud certain individuals in the TAL family who have regularly displayed characteristics at work, which have been recognized and appreciated by the management. I believe strongly that those of us who put in a little extra need to be duly recognized and this is a small initiative to do so.
The awards that you will see in the attached presentation have been decided on the basis of values that we want to promote and encourage within TAL. I hope that those who have received these awards will be duly encouraged and those who do not receive these awards, will aspire for the same in the coming year.
The management is increasingly giving importance to good attendance and this is evident from the reward structure. The highest reward (Rs.1,200) has been given to the employee with maximum attendance. The other employees have been rewarded as below:
Attendance
Reward amount (Rs.)
97-100%
1000
95-100%
900
90-95%
800
below 90%
750
The employees may collect their rewards from HR deptt. during Lunch hour, on 25th August '09.
All the best, and please raise a big round of applause for your colleagues who have been awarded!
Best Regards,
From India, New Delhi
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The increments for the year 2009-10 unfortunately got delayed but have been declared now. As committed to all employees, a Performance incentive has been given to select few employees who have demonstrated exceptional progress and growth and have aspired to develop competent and responsible professionals.
In addition to the above, we have also decided that we shall be releasing annual awards to our upcoming ‘stars' at TAL with effect from this year. This is my personal initiative and has been taken to recognize, reward and applaud certain individuals in the TAL family who have regularly displayed characteristics at work, which have been recognized and appreciated by the management. I believe strongly that those of us who put in a little extra need to be duly recognized and this is a small initiative to do so.
The awards that you will see in the attached presentation have been decided on the basis of values that we want to promote and encourage within TAL. I hope that those who have received these awards will be duly encouraged and those who do not receive these awards, will aspire for the same in the coming year.
The management is increasingly giving importance to good attendance and this is evident from the reward structure. The highest reward (Rs.1,200) has been given to the employee with maximum attendance. The other employees have been rewarded as below:
Attendance
Reward amount (Rs.)
97-100%
1000
95-100%
900
90-95%
800
below 90%
750
The employees may collect their rewards from HR deptt. during Lunch hour, on 25th August '09.
All the best, and please raise a big round of applause for your colleagues who have been awarded!
Best Regards,
From India, New Delhi
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If you are not paying overtime, then you can credit their leave account with a number of days. This number can be calculated by dividing the total number of hours worked during the month by 8. The accumulated leave can be used by the employee at the time of their leave or it can be encashed at the year-end.
From India, Madras
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From India, Madras
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Dear Swati, They can be given c/off, but within two months and you have to have records of that. thanks Regds. Roopesh Rai TEI Technologies Pvt. Ltd Noida 9717992109
From India, Gurgaon
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From India, Gurgaon
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Hello Friends,
Regarding extra staying hours calculations and considering that time as O.T., below are the points to keep in mind while calculating it:
- Who will be eligible?
O.T. has to be given only to specific grade employees e.g.: below Manager grade or Senior Manager Grade. It depends on company policy/management decision, that up to this grade these employees will be eligible for it.
- How can you collect the data?
Each and every employee will calculate his OT time (from the 1st day of the month till the end day of the month he will mention in one column his out time and next column his o.t. hours) and approve that list from his department head. After getting an approved list from the particular department, it's HR department's responsibility to cross-check the out time with your attendance or in-out timesheet. If there will be any discrepancy, the HR department has full right to deduct the hours and calculate according to the correct time.
- Calculation on What basis?
According to the rules, we give OT payment just double the basic salary but some companies give on a single basic salary. It can be a management decision also.
- Extra Care?
Normally duty hours are 8 hours, but in a few cases like company drivers, stores department, security guards, their duty hours are more than 8 hours and it can be 9 or 11 hours. Again, you will have to check company policy, and after that time, you can calculate OT.
- What will be the conditions?
For example, if your duty hours are 9:00 a.m. to 5:30 p.m. and if an employee sits more than 2 hours after 5:30, then he will be eligible for OT after approval from his department head that there were some urgent work and he had to stay back in the office due to that reason. If he sits in the office for 1:45 hours, he won't be eligible for OT. It must be a 2-hour time.
From India, Gurgaon
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Regarding extra staying hours calculations and considering that time as O.T., below are the points to keep in mind while calculating it:
- Who will be eligible?
O.T. has to be given only to specific grade employees e.g.: below Manager grade or Senior Manager Grade. It depends on company policy/management decision, that up to this grade these employees will be eligible for it.
- How can you collect the data?
Each and every employee will calculate his OT time (from the 1st day of the month till the end day of the month he will mention in one column his out time and next column his o.t. hours) and approve that list from his department head. After getting an approved list from the particular department, it's HR department's responsibility to cross-check the out time with your attendance or in-out timesheet. If there will be any discrepancy, the HR department has full right to deduct the hours and calculate according to the correct time.
- Calculation on What basis?
According to the rules, we give OT payment just double the basic salary but some companies give on a single basic salary. It can be a management decision also.
- Extra Care?
Normally duty hours are 8 hours, but in a few cases like company drivers, stores department, security guards, their duty hours are more than 8 hours and it can be 9 or 11 hours. Again, you will have to check company policy, and after that time, you can calculate OT.
- What will be the conditions?
For example, if your duty hours are 9:00 a.m. to 5:30 p.m. and if an employee sits more than 2 hours after 5:30, then he will be eligible for OT after approval from his department head that there were some urgent work and he had to stay back in the office due to that reason. If he sits in the office for 1:45 hours, he won't be eligible for OT. It must be a 2-hour time.
From India, Gurgaon
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dear ukmitra, as per me you have to compensate or give some incentive with special performance rewards. regards/tm
From India, Ahmadabad
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From India, Ahmadabad
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They can be benefited by paying double over time or you may tell them that they can compensate against leave
From India, Pune
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From India, Pune
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Hi, dear...
If you are not paying overtime, then you can give compensatory time off to your employees. That's what we are doing in our organization, and employees are also happy with this as they can save their leaves, especially earned leaves.
Shivani :icon1:
From India, Chandigarh
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If you are not paying overtime, then you can give compensatory time off to your employees. That's what we are doing in our organization, and employees are also happy with this as they can save their leaves, especially earned leaves.
Shivani :icon1:
From India, Chandigarh
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Hi Swati,
u may go through Minimum wages act 1948 for crrective action.
Report on the Working of the Minimum Wages Act,1948
for the year 2002
I INTRODUCTION
India as a welfare state is committed to secure social and economic justice, inter alia, for its working population. One of the basic steps in this direction is the formulation of sound wage policy primarily for the amelioration of the conditions of the working class. In the Indian context, evolving of such a wage policy assumed greater importance as a majority of the workforce is employed in the unorganised sector and is vulnerable. to exploitation by their employers.
The term ‘Minimum Wage Fixation' implies the fixation of the rate or rates of minimum wages by a process or by invoking the authority of the State. The statutory minimum wage has the force of law and it becomes obligatory on the part of the employers not to pay below the prescribed minimum wage to its employees. This process helps the employees in getting fair and reasonable wages more particularly in the unorganised sector. Also the other gains which could be derived by fixing minimum wages under statutory provisions are to eliminate sweating of labour and to ensure rapid growth and equitable distribution of the national income thereby ensuring sound development of the national economy.
. Keeping this in view, the Government of India enacted the Minimum Wages Act, 1948. The Act provides for fixation / periodic revision of minimum wages in employments where labour is vulnerable to exploitation. The fixation of minimum wage is the starting point in the evolution of rational wage structure. Under the Act, the appropriate Government, both Centre and State can fix / revise the minimum wages in scheduled employments falling in their respective jurisdiction. It also provides for fixation of hours of work, payment of overtime wages besides providing penalties for offences under the Act and rules made thereunder.
II Main provisions under the Act
Fixing of minimum rates of wages
The appropriate Government may fix the minimum rates of wages payable to employees employed in an employment specified in Part - I or Part - II of the Schedule and in an employment subsequently added to the Schedule. The Government may review the minimum rates of wages and revise the minimum rates at intervals not exceeding five years.
The appropriate Government may fix separate minimum rates of wages for time rate and for piece rate. Different wage rates may be fixed for different scheduled employments, different classes of work in the same scheduled employment, for adults, adolescents, children and apprentices and for different localities and for any one or more of the wage periods, viz., by the hour or by the day or by the month or by such larger wage period as may be prescribed.
2. Minimum rate of wages
Any minimum rate of wages fixed or revised may consist of
a basic rate of wages and a special allowance ; or
a basic rate of wages with or without cost of living allowance and the cash value of concessions in respect of supplies of essential commodities at concessional rates; or
an all inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of concessions, if any.
3. Procedure for fixing and revising minimum wages
The appropriate Government is required to appoint an Advisory Board for advising it, generally in the matter of fixing and revising minimum rates of wages.
The Central Government appoints a Central Advisory Board for the purpose of advising the Central and State Governments in the matters of the fixation and revision of minimum rates of wages as well as for co-ordinating the work of Advisory Boards.
The Central Advisory Board consists of persons to be nominated by the Central Government representing employers and employees in the scheduled employments, in equal number and independent persons not exceeding one third of its total number of members. One of such independent persons is to be appointed the Chairman of the Board by the Central Government.
4. Wages in kind
Minimum wages payable under this Act are to be paid in cash. However, the payment of minimum wages can be made wholly or partly in kind, by notifying in the official Gazette, where it is customary to pay wages either wholly or partly in kind.
5. Payment of minimum rate of wages
The employer is required to pay to every employee, engaged in a scheduled employment under him, wages at a rate not less than the minimum rate of wages notified for that class of employees without any deduction except as may be authorised.
6. Fixing hours for normal working day
In regard to any scheduled employment, minimum rates of wages in respect of which have been fixed under this Act, the appropriate Government may
fix the number of hours of work which shall constitute a normal working day, inclusive of one or more specified intervals;
provide for a day of rest in every period of seven days which shall be allowed to all employees or to any specified class of employees and for the payment of remuneration in respect of such days of rest;
provide for payment for work on a day of rest at a rate not less than the overtime rate.
7. Overtime
If any employee whose minimum rate of wages is fixed under the Act works on any day in excess of the number of hours constituting normal working day, the employer is required to pay him for excess hours at the overtime rate fixed under this Act or under any law of the appropriate Government for the time being in force, whichever is higher.
8. Wages for two or more classes of work
If an employee does two or more classes of work, to each of which a different rate of wages is applicable, the employer is required to pay to such employee in respect of the time respectively occupied in each such class of work, wages at not less than the minimum rate in force in respect of each such class.
9. Maintenance of registers and records
Every employer is required to maintain registers and records giving particulars of employees, the work performed by them, the wages paid to them, the receipts given by them and any other required particulars.
10. Inspections
The appropriate Government may, by notification in the official Gazette, appoint inspectors for the purpose of this Act and define the local limits for their functions.
11. Claims
The appropriate Government may, by notification in the official Gazette, appoint Labour Commissioner or Commissioner for Workmen's Compensation or any officer not below the rank of Labour Commissioner or any other officer with experience as a judge of a civil court or as a Stipendiary Magistrate, to hear and decide for any specified area, all claims arising out of the payment of less than the minimum rates of wages as well as payment for days of rest or for work done.
Penalties for Offences
Any employer who contravenes any provision of this Act shall be punishable with imprisonment for a term, which may extend to six months or with fine, which may extend to five hundred rupees or with both.
III Statistics collected under the Minimum Wages Act, 1948
All establishments covered under the Act are required to furnish to the concerned authority (Central or State) an annual return in prescribed form as per the rules framed under the Minimum Wages Act, 1948. The Centre / State Governments in turn send a consolidated return to the Labour Bureau which compiles an all India report based on the data contained in these returns. Besides, Quarterly returns sent by these agencies to the Bureau are also made use of in compiling information at all India level.
(i) Addition of New Employments
The State Governments and the Union Territories review the Scheduled Employments under their jurisdiction from time to time and add new employments in respect of which it is of the opinion that minimum rates of wages should be fixed statutorily in addition to the existing ones.
During the year 2002, nine State Governments / U.Ts., namely Arunachal Pradesh, Bihar, Karnataka, Orissa, Punjab, Tamil Nadu, Tripura, West Bengal and Lakshadweep have added employments to the Schedule appended to the Act. (Table 1)
(ii) Fixation of Minimum Wages during 2002
During the year 2002 the minimum wages were fixed for the first time by nine States / U.Ts., namely Arunachal Pradesh, Bihar, D. & N. Haveli, Karnataka, Kerala, Orissa, Punjab, Tripura, and Lakshadweep (Table 2)
(iii) Scheduled Employments and Prevailing Minimum Wage Rates
The Central Government and the different State Governments have been maintaining a set of scheduled employments for fixing minimum rates of wages under their respective jurisdiction. This set undergoes a change as and when there is an addition of an employment in the schedule appended to the Minimum Wages Act, 1948 by these appropriate Governments.
The details of prevailing minimum wages relating to unskilled workers fixed / revised in different scheduled employments in different States / Union Territories as on 31.12.2002 are presented in Table 3. The components of wage rates like Basic Wage and Dearness Allowance have also been presented separately wherever fixed / available. It was noticed that in some of the scheduled employments more than one rate of minimum wages have been prescribed for different Areas / Regions / Zones in a particular State / Union Territory.
(iv) Scheduled Employments and Range of Minimum Wage Rates
The total number of employments in respect of which the minimum wage rates have been fixed / revised and the range of minimum wage rates in different States / Union Territories as on 31.12.2002 have been presented in Table 4.
It emerges from the table that the number of scheduled employments was highest in the State of Tamil Nadu (90) followed by Orissa (83) and Bihar (74).
The dispersion of wage rates as measured by the range between the lowest minimum wage rate and highest minimum wage rate at all States / U.Ts. level is very large, which is reflected by the fact that Rs. 22.20 was the lowest minimum wages (in the State of Karnataka ) and Rs. 319.60 was the highest minimum wages (in the state of Kerala).
(v) Minimum Wage Rates in Scheduled Employments in Central Sphere / States /
Union Territories
Table 5 depicts a comparative picture of the minimum wage rates per day prevailing in the scheduled employments in Central Sphere / States / Union Territories. The main purpose of classifying this information is (a) to study the inter-State variations in the minimum wage rates in a particular scheduled employment and (b) to present the number and names of the States / U.Ts. fixing minimum wages for a particular employment, at one place.
It could be seen that as on 31.12.2002 there were in all 305 different types of scheduled employments all over India for which minimum wage rat`es have been fixed / revised by the Central Government / States / Union Territories.
(vi) Submission of Returns
The details regarding number of establishments covered under the Minimum Wages Act, 1948 and those submitting returns as well as average daily employment have been presented by State / U.Ts. / Central Sphere in Table 6.
(vii) Enforcement of the Act
In most of the States and Union Territories, there was no machinery appointed exclusively for the enforcement of the Minimum Wages Act and the inspection staff, appointed under other labour Acts was entrusted with the enforcement of the Minimum Wages Act also.
The State-wise details of Inspections made, irregularities detected, prosecutions launched and claims preferred have been given in Table 7.
(viii) Limitations of Data :
The following States hae not submitted their returns.
Assam
Chhatisgarh
Delhi
Daman & Diu
Goa
Jharkhand
Maharashtra
Madhya Pradesh
Mizoram
Nagaland
Sikkim
From India, Madras
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u may go through Minimum wages act 1948 for crrective action.
Report on the Working of the Minimum Wages Act,1948
for the year 2002
I INTRODUCTION
India as a welfare state is committed to secure social and economic justice, inter alia, for its working population. One of the basic steps in this direction is the formulation of sound wage policy primarily for the amelioration of the conditions of the working class. In the Indian context, evolving of such a wage policy assumed greater importance as a majority of the workforce is employed in the unorganised sector and is vulnerable. to exploitation by their employers.
The term ‘Minimum Wage Fixation' implies the fixation of the rate or rates of minimum wages by a process or by invoking the authority of the State. The statutory minimum wage has the force of law and it becomes obligatory on the part of the employers not to pay below the prescribed minimum wage to its employees. This process helps the employees in getting fair and reasonable wages more particularly in the unorganised sector. Also the other gains which could be derived by fixing minimum wages under statutory provisions are to eliminate sweating of labour and to ensure rapid growth and equitable distribution of the national income thereby ensuring sound development of the national economy.
. Keeping this in view, the Government of India enacted the Minimum Wages Act, 1948. The Act provides for fixation / periodic revision of minimum wages in employments where labour is vulnerable to exploitation. The fixation of minimum wage is the starting point in the evolution of rational wage structure. Under the Act, the appropriate Government, both Centre and State can fix / revise the minimum wages in scheduled employments falling in their respective jurisdiction. It also provides for fixation of hours of work, payment of overtime wages besides providing penalties for offences under the Act and rules made thereunder.
II Main provisions under the Act
Fixing of minimum rates of wages
The appropriate Government may fix the minimum rates of wages payable to employees employed in an employment specified in Part - I or Part - II of the Schedule and in an employment subsequently added to the Schedule. The Government may review the minimum rates of wages and revise the minimum rates at intervals not exceeding five years.
The appropriate Government may fix separate minimum rates of wages for time rate and for piece rate. Different wage rates may be fixed for different scheduled employments, different classes of work in the same scheduled employment, for adults, adolescents, children and apprentices and for different localities and for any one or more of the wage periods, viz., by the hour or by the day or by the month or by such larger wage period as may be prescribed.
2. Minimum rate of wages
Any minimum rate of wages fixed or revised may consist of
a basic rate of wages and a special allowance ; or
a basic rate of wages with or without cost of living allowance and the cash value of concessions in respect of supplies of essential commodities at concessional rates; or
an all inclusive rate allowing for the basic rate, the cost of living allowance and the cash value of concessions, if any.
3. Procedure for fixing and revising minimum wages
The appropriate Government is required to appoint an Advisory Board for advising it, generally in the matter of fixing and revising minimum rates of wages.
The Central Government appoints a Central Advisory Board for the purpose of advising the Central and State Governments in the matters of the fixation and revision of minimum rates of wages as well as for co-ordinating the work of Advisory Boards.
The Central Advisory Board consists of persons to be nominated by the Central Government representing employers and employees in the scheduled employments, in equal number and independent persons not exceeding one third of its total number of members. One of such independent persons is to be appointed the Chairman of the Board by the Central Government.
4. Wages in kind
Minimum wages payable under this Act are to be paid in cash. However, the payment of minimum wages can be made wholly or partly in kind, by notifying in the official Gazette, where it is customary to pay wages either wholly or partly in kind.
5. Payment of minimum rate of wages
The employer is required to pay to every employee, engaged in a scheduled employment under him, wages at a rate not less than the minimum rate of wages notified for that class of employees without any deduction except as may be authorised.
6. Fixing hours for normal working day
In regard to any scheduled employment, minimum rates of wages in respect of which have been fixed under this Act, the appropriate Government may
fix the number of hours of work which shall constitute a normal working day, inclusive of one or more specified intervals;
provide for a day of rest in every period of seven days which shall be allowed to all employees or to any specified class of employees and for the payment of remuneration in respect of such days of rest;
provide for payment for work on a day of rest at a rate not less than the overtime rate.
7. Overtime
If any employee whose minimum rate of wages is fixed under the Act works on any day in excess of the number of hours constituting normal working day, the employer is required to pay him for excess hours at the overtime rate fixed under this Act or under any law of the appropriate Government for the time being in force, whichever is higher.
8. Wages for two or more classes of work
If an employee does two or more classes of work, to each of which a different rate of wages is applicable, the employer is required to pay to such employee in respect of the time respectively occupied in each such class of work, wages at not less than the minimum rate in force in respect of each such class.
9. Maintenance of registers and records
Every employer is required to maintain registers and records giving particulars of employees, the work performed by them, the wages paid to them, the receipts given by them and any other required particulars.
10. Inspections
The appropriate Government may, by notification in the official Gazette, appoint inspectors for the purpose of this Act and define the local limits for their functions.
11. Claims
The appropriate Government may, by notification in the official Gazette, appoint Labour Commissioner or Commissioner for Workmen's Compensation or any officer not below the rank of Labour Commissioner or any other officer with experience as a judge of a civil court or as a Stipendiary Magistrate, to hear and decide for any specified area, all claims arising out of the payment of less than the minimum rates of wages as well as payment for days of rest or for work done.
Penalties for Offences
Any employer who contravenes any provision of this Act shall be punishable with imprisonment for a term, which may extend to six months or with fine, which may extend to five hundred rupees or with both.
III Statistics collected under the Minimum Wages Act, 1948
All establishments covered under the Act are required to furnish to the concerned authority (Central or State) an annual return in prescribed form as per the rules framed under the Minimum Wages Act, 1948. The Centre / State Governments in turn send a consolidated return to the Labour Bureau which compiles an all India report based on the data contained in these returns. Besides, Quarterly returns sent by these agencies to the Bureau are also made use of in compiling information at all India level.
(i) Addition of New Employments
The State Governments and the Union Territories review the Scheduled Employments under their jurisdiction from time to time and add new employments in respect of which it is of the opinion that minimum rates of wages should be fixed statutorily in addition to the existing ones.
During the year 2002, nine State Governments / U.Ts., namely Arunachal Pradesh, Bihar, Karnataka, Orissa, Punjab, Tamil Nadu, Tripura, West Bengal and Lakshadweep have added employments to the Schedule appended to the Act. (Table 1)
(ii) Fixation of Minimum Wages during 2002
During the year 2002 the minimum wages were fixed for the first time by nine States / U.Ts., namely Arunachal Pradesh, Bihar, D. & N. Haveli, Karnataka, Kerala, Orissa, Punjab, Tripura, and Lakshadweep (Table 2)
(iii) Scheduled Employments and Prevailing Minimum Wage Rates
The Central Government and the different State Governments have been maintaining a set of scheduled employments for fixing minimum rates of wages under their respective jurisdiction. This set undergoes a change as and when there is an addition of an employment in the schedule appended to the Minimum Wages Act, 1948 by these appropriate Governments.
The details of prevailing minimum wages relating to unskilled workers fixed / revised in different scheduled employments in different States / Union Territories as on 31.12.2002 are presented in Table 3. The components of wage rates like Basic Wage and Dearness Allowance have also been presented separately wherever fixed / available. It was noticed that in some of the scheduled employments more than one rate of minimum wages have been prescribed for different Areas / Regions / Zones in a particular State / Union Territory.
(iv) Scheduled Employments and Range of Minimum Wage Rates
The total number of employments in respect of which the minimum wage rates have been fixed / revised and the range of minimum wage rates in different States / Union Territories as on 31.12.2002 have been presented in Table 4.
It emerges from the table that the number of scheduled employments was highest in the State of Tamil Nadu (90) followed by Orissa (83) and Bihar (74).
The dispersion of wage rates as measured by the range between the lowest minimum wage rate and highest minimum wage rate at all States / U.Ts. level is very large, which is reflected by the fact that Rs. 22.20 was the lowest minimum wages (in the State of Karnataka ) and Rs. 319.60 was the highest minimum wages (in the state of Kerala).
(v) Minimum Wage Rates in Scheduled Employments in Central Sphere / States /
Union Territories
Table 5 depicts a comparative picture of the minimum wage rates per day prevailing in the scheduled employments in Central Sphere / States / Union Territories. The main purpose of classifying this information is (a) to study the inter-State variations in the minimum wage rates in a particular scheduled employment and (b) to present the number and names of the States / U.Ts. fixing minimum wages for a particular employment, at one place.
It could be seen that as on 31.12.2002 there were in all 305 different types of scheduled employments all over India for which minimum wage rat`es have been fixed / revised by the Central Government / States / Union Territories.
(vi) Submission of Returns
The details regarding number of establishments covered under the Minimum Wages Act, 1948 and those submitting returns as well as average daily employment have been presented by State / U.Ts. / Central Sphere in Table 6.
(vii) Enforcement of the Act
In most of the States and Union Territories, there was no machinery appointed exclusively for the enforcement of the Minimum Wages Act and the inspection staff, appointed under other labour Acts was entrusted with the enforcement of the Minimum Wages Act also.
The State-wise details of Inspections made, irregularities detected, prosecutions launched and claims preferred have been given in Table 7.
(viii) Limitations of Data :
The following States hae not submitted their returns.
Assam
Chhatisgarh
Delhi
Daman & Diu
Goa
Jharkhand
Maharashtra
Madhya Pradesh
Mizoram
Nagaland
Sikkim
From India, Madras
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In our company, we have an off-in-lieu policy for extra hours worked by employees. This means that for every eight extra hours worked, an employee is entitled to one day off in lieu of leave. However, this policy applies only to executives and not to non-executives or workers. For non-executives and workers, we provide overtime pay instead.
From Pakistan, Islamabad
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From Pakistan, Islamabad
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Dear friends,
This is an old thread, but I have one related question. In most of the MNCs, employees work late and are not paid overtime. The labor laws exempt the payment of overtime to people employed in managerial and administrative capacity, which has been elaborated in some judgments to mean people employed in a supervisory capacity. In a real situation, not all employees can be in a supervisory capacity, but they are getting far more than minimum wages (but ironically, that is not the criteria to pay overtime).
How do companies resolve this problem?
Regards,
Preeti
From United Kingdom
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This is an old thread, but I have one related question. In most of the MNCs, employees work late and are not paid overtime. The labor laws exempt the payment of overtime to people employed in managerial and administrative capacity, which has been elaborated in some judgments to mean people employed in a supervisory capacity. In a real situation, not all employees can be in a supervisory capacity, but they are getting far more than minimum wages (but ironically, that is not the criteria to pay overtime).
How do companies resolve this problem?
Regards,
Preeti
From United Kingdom
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Dear Preeti,
I am not aware of the other State Shops Act, but according to the Punjab Shops & Commercial Establishment Act, in my opinion, all persons employed, including supervisors, managers, etc., are covered under the definition of an employee and are entitled to receive overtime (OT) payment in accordance with Section 7 of this Act. Now, it is up to them whether they want to avail themselves of the benefits under this Act or not.
Regards,
R.N. Khola
From India, Delhi
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I am not aware of the other State Shops Act, but according to the Punjab Shops & Commercial Establishment Act, in my opinion, all persons employed, including supervisors, managers, etc., are covered under the definition of an employee and are entitled to receive overtime (OT) payment in accordance with Section 7 of this Act. Now, it is up to them whether they want to avail themselves of the benefits under this Act or not.
Regards,
R.N. Khola
From India, Delhi
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Hi Swati,
First of all, you can distribute all the employees into levels according to their salary and then fix overtime and compensatory offs (C-Off) based on their level. For example, employees with a salary range of 3000-4000 CTC can be placed in the lowest level where they receive overtime pay, while staff-level employees can be granted C-Off.
You can offer double the basic pay for one hour of overtime, and consider initiating full duty allowance for those who are present for all 31 days.
Thanks and Regards,
Nidhi
From India, Jodhpur
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First of all, you can distribute all the employees into levels according to their salary and then fix overtime and compensatory offs (C-Off) based on their level. For example, employees with a salary range of 3000-4000 CTC can be placed in the lowest level where they receive overtime pay, while staff-level employees can be granted C-Off.
You can offer double the basic pay for one hour of overtime, and consider initiating full duty allowance for those who are present for all 31 days.
Thanks and Regards,
Nidhi
From India, Jodhpur
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Hi Swathi,
First, find out the resource that is missing in your QC Department. Incentives and comp time off are not the only ways to satisfy the employees, of course, there are other ways for the long term. Find out the cause that is leading the QC staff to work for 31 days and long hours. Hopefully, by addressing this issue, you can arrive at a permanent solution.
I believe you need to act swiftly as this is an employee satisfaction matter.
All the best.
Regards,
Rohini
From India, Bangalore
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First, find out the resource that is missing in your QC Department. Incentives and comp time off are not the only ways to satisfy the employees, of course, there are other ways for the long term. Find out the cause that is leading the QC staff to work for 31 days and long hours. Hopefully, by addressing this issue, you can arrive at a permanent solution.
I believe you need to act swiftly as this is an employee satisfaction matter.
All the best.
Regards,
Rohini
From India, Bangalore
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EXTRA HOURS REQUISITION FORMAT 1.xls
Employee's Compensation Act-2009.pdf