Dear Sir/Madam,
I observed that most organizations calculate overtime using the salary formula of 26/8 * ot hours * 2. I would like to know if this formula is mentioned in the Factory Act, Minimum Wage Act, or any other labor law. If so, could you please provide me with the relevant provision?
Thank you.
From India, Patna
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2I observed that most organizations calculate overtime using the salary formula of 26/8 * ot hours * 2. I would like to know if this formula is mentioned in the Factory Act, Minimum Wage Act, or any other labor law. If so, could you please provide me with the relevant provision?
Thank you.
From India, Patna
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Dear Mitesh makwana, Please note that OT Payment is paid@ double Rate on Gross Salary.Please refer to Minimum Wages NOTIFICATION Applicable to your Establishment for clarity
From India, New Delhi
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From India, New Delhi
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Yes, there is a specific provision in the Factories Act (refer to sections 52 to 58) that outlines how the computation is to be done.
Most employers consider 26 working days in a month, accounting for 4 Sundays. They typically divide the monthly salary by 26 to calculate the daily salary. This daily rate is then divided by 8 hours to determine the hourly rate. Overtime should be paid at twice this hourly rate.
From India, Mumbai
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Most employers consider 26 working days in a month, accounting for 4 Sundays. They typically divide the monthly salary by 26 to calculate the daily salary. This daily rate is then divided by 8 hours to determine the hourly rate. Overtime should be paid at twice this hourly rate.
From India, Mumbai
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Overtime is double the wages( basic + DA) , not double the gross salary
From India, Madras
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From India, Madras
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Sebastian, Where did you get that information from ? Please do not put any thing that is not supported by the law of the land, or specifically against what is actually in the law
From India, Mumbai
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From India, Mumbai
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Dear Mitesh,
Juxtaposing the Minimum Wages Act, 1948, and the Factories Act, 1948 regarding the issue of overtime payment, you can find the saving clause under subsection (2) of section 14 of the Minimum Wages Act, 1948, prohibiting the prejudicial operation of the provisions of section 14 wherever section 59 of the Factories Act, 1948, is applicable.
Coming to the observation of Sebastian, it is not correct to take into account only the components of basic and D.A. in computing the overtime rate of wages in view of the meaning assigned to the term "ordinary rate of wages" under section 59(1) of the Factories Act, 1948.
From India, Salem
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Juxtaposing the Minimum Wages Act, 1948, and the Factories Act, 1948 regarding the issue of overtime payment, you can find the saving clause under subsection (2) of section 14 of the Minimum Wages Act, 1948, prohibiting the prejudicial operation of the provisions of section 14 wherever section 59 of the Factories Act, 1948, is applicable.
Coming to the observation of Sebastian, it is not correct to take into account only the components of basic and D.A. in computing the overtime rate of wages in view of the meaning assigned to the term "ordinary rate of wages" under section 59(1) of the Factories Act, 1948.
From India, Salem
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Dear Sir/Madam,
Most organizations calculate overtime using the salary formula of 26/8 * ot hrs * 2. I want to know if this formula is mentioned as 26 or 30 in the Factory Act, Minimum Wage Act, or any other labor law. If yes, could someone clarify this provision, please?
Regards,
Shivakumar
From India, Bangalore
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Most organizations calculate overtime using the salary formula of 26/8 * ot hrs * 2. I want to know if this formula is mentioned as 26 or 30 in the Factory Act, Minimum Wage Act, or any other labor law. If yes, could someone clarify this provision, please?
Regards,
Shivakumar
From India, Bangalore
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If someone is a monthly rated employee, the daily rate of wages may be calculated by dividing the monthly rate by 30 or 28, 29, 30, or 31 depending on the number of days in a month. The monthly rate of wages can also be determined by multiplying the monthly rate wages by 12 and then dividing by 365 or 366, as the case may be when overtime (OT) will be paid. The hourly rate will be determined by dividing the daily rate by 8.
If the employee is a daily rated employee or an hourly rated employee, then there will not be any issue. In this case, to arrive at the monthly rate, the daily rate should be multiplied by 26.
Mr. Umakanthan has mentioned that OT amount should be paid on the "Ordinary rate of wages," not only on Basic and DA, which I also agree with.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531 [USD HR Solutions – To Strive towards excellence with effort and integrity](http://www.usdhrs.in)
From India, New Delhi
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If the employee is a daily rated employee or an hourly rated employee, then there will not be any issue. In this case, to arrive at the monthly rate, the daily rate should be multiplied by 26.
Mr. Umakanthan has mentioned that OT amount should be paid on the "Ordinary rate of wages," not only on Basic and DA, which I also agree with.
S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions +91 98310 81531 [USD HR Solutions – To Strive towards excellence with effort and integrity](http://www.usdhrs.in)
From India, New Delhi
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Minimum Wages Act & Rules Wage Slip Form No.XI-Rule (26(2.) .pdf
SELF-CERTIFICAT E PROFORMA UNNDER THE MINIMUM WAGES ACT, 1948.doc