Overtime

Overtime refers to the time worked in excess of ones’ regular working hours which, in India, is eight to nine hours per day and forty-eight to fifty hours per week, depending upon the establishment one is employed under. If a person works for longer than the regular working hours, that person is eligible to receive remuneration for that period, which will be twice the persons’ normal wage.

Overtime Payment Rules in India

There are several laws in India which govern the maximum overtime hours allowed in India and also provide for an overtime calculation formula in India. Currently, the overtime laws for salaried employees are not functional for many industries. However, in the coming days with the enforcement of new labour codes in India, the picture may change for betterment. Consultation with local labour lawyers may help employees/ workmen understand who is eligible for overtime pay in India.

What are the Rules for Extra Wages for Overtime?

Based on the industry one works for, the overtime payment rules vary. Some workplaces may be governed by the central laws while the other might be a subject of state laws. Knowing employee rights may empower the working class

What is the formula for calculating overtime?

It is evident from the laws governing overtime payment rules mentioned above that the field of work and location (State or Union territory) plays an important role for which the overtime amount may vary. For instance, the overtime payment rules in Maharashtra may not be like that of Himachal Pradesh. However, on an average and for those industries governed by the central laws, the following overtime calculation formula in India may apply:

Is overtime calculated on basic or gross salary?

As per the overtime payment rules in India, it is calculated on basic salary. It may also include dearness or any other allowance. But it may be noted that labour law on overtime in India excludes any bonus or other such incentive while deciding or calculating overtime payment rules. In any case, the overtime payment rules do not regard the gross salary. But if there is no statutory obligation and the employer wishes to reward the hard-working employees voluntarily, overtime payment rules in India do not restrict the same. In such a case, whether overtime is paid on basic or gross in India is the employer’s choice.

Who is Eligible for Overtime Pay?

• A person working in any factory
• A person working in mines (underground or above ground)
• Working journalists
• Building or construction workers
• Any person working in a scheduled employment
• Any person working in a shop or establishment
• Contractual labour

Who is not Eligible for Overtime Pay in India?

• Any member of the armed forces
• Any person working beyond the overtime work limits
• Any person working overtime without authority

Although some states may not promote the overtime laws for salaried employees, the proposed labour codes do have overtime payment rules for white-collared salaried employees in India.

Can my employer make me work overtime without pay?

It depends upon the industry a person is employed in. If the employment falls under any one of those mentioned above, the employer cannot make an employee work overtime without paying the overtime wages. However, for those working in an employment which is not governed by overtime laws for salaried employees, they may have to wait for the upcoming and updated labour codes in India.