Dear seniors, I have seen that most of the company in maharashtra pay ot @ double of basic+da and no any other allowance. Is it legally correct to do so? Please advise. Thanks.
From India, Pune
467From India, Pune
That is the right (legal) way to calculate OT. It should be double of Basic+DA on hourly basis. No other allowances or statutory benefits are applicable on OT. regards, Kamal
From India, Pune
From India, Pune
Under factories Act, it is very clearly stated that overtime is to be paid on double of Ordinary Wages (Sec 59)
Ordinary Wages is basically gross wages as it includes all allowances other than OT.
Anyone paying double of basic + Da is in violation of the act and can be asked to pay the balance on a complain. Its a different matter that most companies are doing that and the government is ignoring it. In case of a complain, however, there is little chance of court agreeing with "General Practice" when there is a specific provision in the act (which again is very very clear).
You do it at your own risk.
The claim for differential back wages can go back up to 3 years (which is on account of limitation / time barring and also because records under labour laws are required to be kept for 3 years). However, in case of a complain, specially where it is proved that the employer was aware and deliberately supressed the complain or used delay tactics, the court may go beyond the 3 years to decide the quantum of back wages, interest and penalty.
From India, Mumbai
Ordinary Wages is basically gross wages as it includes all allowances other than OT.
Anyone paying double of basic + Da is in violation of the act and can be asked to pay the balance on a complain. Its a different matter that most companies are doing that and the government is ignoring it. In case of a complain, however, there is little chance of court agreeing with "General Practice" when there is a specific provision in the act (which again is very very clear).
You do it at your own risk.
The claim for differential back wages can go back up to 3 years (which is on account of limitation / time barring and also because records under labour laws are required to be kept for 3 years). However, in case of a complain, specially where it is proved that the employer was aware and deliberately supressed the complain or used delay tactics, the court may go beyond the 3 years to decide the quantum of back wages, interest and penalty.
From India, Mumbai
Dear Prashant ji,
I agree with Saswata ji. Please read section 59(2) which says ordinary rate of wages means the basic plus such allowance, including cash equivalent of ........but does not include bonus and wages for overtime. Also it is held in Chief General Manager, Telecom Factory Vs. H. R. Thakur & Ors. 1998 I CLR 1260 (Mumbai) that HRA is to be taken into consideration while computing overtime wages.
From India, Mumbai
I agree with Saswata ji. Please read section 59(2) which says ordinary rate of wages means the basic plus such allowance, including cash equivalent of ........but does not include bonus and wages for overtime. Also it is held in Chief General Manager, Telecom Factory Vs. H. R. Thakur & Ors. 1998 I CLR 1260 (Mumbai) that HRA is to be taken into consideration while computing overtime wages.
From India, Mumbai
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