Dear All,
Is PF deduction applicable to Overtime? We have contract laborers working 12-hour shifts. Currently, we record 8 hours as normal shift hours and the additional 4 hours as extra duties.
The contractor includes this additional time as an other allowance in the salary slip. What is the correct approach to take moving forward?
Regards,
Ranjeet
From India, New Delhi
12Is PF deduction applicable to Overtime? We have contract laborers working 12-hour shifts. Currently, we record 8 hours as normal shift hours and the additional 4 hours as extra duties.
The contractor includes this additional time as an other allowance in the salary slip. What is the correct approach to take moving forward?
Regards,
Ranjeet
From India, New Delhi
OK! But i suppose that we have to pay overtime at double rate, which will increase all other expenses & heads. Please suggest how to tackle this. Regards Ranjeet
From India, New Delhi
From India, New Delhi
There is no way that one can escape liability of paying double overtime without ESI deduction, but unfortunately, most companies are practicing paying single OT, and that too with no ESI deduction on it.
Regards,
Atul
From India, Delhi
Regards,
Atul
From India, Delhi
These types of increased burdens only make the contractors create two types of paysheets: one for actual payment and another for PF and ESI submission purposes. I do not know when the government will understand and negotiate with the organizations to maintain a single, correct, and universally accepted type of statutory records, which could potentially reduce some percentage of corruption. Let us hope for a change in the near future.
From India, Kumbakonam
From India, Kumbakonam
I know, but currently, in most companies, this practice has been prevailing. It all depends on top management how they want to frame policies. Most companies are now adopting cost-reducing strategies.
Regards,
Ranjeet
From India, New Delhi
Regards,
Ranjeet
From India, New Delhi
Dear All,
Please read the Minimum Wages Act and Factories Act. You will understand why these double OT rules have been established. Please convince your company to pay double OT and ESI amounts on OT. Help in making India's workers live a better and healthier life.
Manish Gupta
From India, Mumbai
Please read the Minimum Wages Act and Factories Act. You will understand why these double OT rules have been established. Please convince your company to pay double OT and ESI amounts on OT. Help in making India's workers live a better and healthier life.
Manish Gupta
From India, Mumbai
We are the C & F of MNC companies for the last 5 years. We are obtaining the Ap & Shops Establishment Act license from the labor department for each of our premises.
However, our MNC agreements indicate us as contractors. Please advise whether we should apply for a Contractor license or adhere to the Ap & Shops Establishment Act. Additionally, please specify the types of wages we should pay, along with a breakdown of PF, ESI, and PT. Could you also provide a breakdown for a gross salary of 40,000, including PF and PT deductions?
If you have any relevant Acts, kindly provide the references for our use. Thank you.
From India, Hyderabad
However, our MNC agreements indicate us as contractors. Please advise whether we should apply for a Contractor license or adhere to the Ap & Shops Establishment Act. Additionally, please specify the types of wages we should pay, along with a breakdown of PF, ESI, and PT. Could you also provide a breakdown for a gross salary of 40,000, including PF and PT deductions?
If you have any relevant Acts, kindly provide the references for our use. Thank you.
From India, Hyderabad
The contractor is required to pay proper dues to the government and pay all statutory dues to the workers. The principal employer is responsible to make it happen. If this rule were not there, then every company would appoint someone to be a contractor and simply skip the statutory dues. The rules in this regard are in fact quite fair and simple. It's time we stop complaining about government rules everywhere. First, look at what the employers are doing that necessitated such rules in the first place.
From India, Mumbai
From India, Mumbai
Employing workers for 12 hours is against the law. You may note that in case of overtime exceeding 48 hours per month for an employee in any establishment, it indicates that there is a vacancy for a full-time employee and the establishment is avoiding the same.
The Shops and Establishment Act clearly specifies the number of hours an employee can be made to work per week. The contractor is not showing the salary for overtime as part of the salary to escape from these complications. This is something that cannot be avoided in the present scenario.
If you are certain that the contractor complies with EPF, ESIC, Bonus, etc., for all employees (which most contractors do not follow), then showing overtime as additional allowances can be accepted by you though not legal.
Siva
From India, Mumbai
The Shops and Establishment Act clearly specifies the number of hours an employee can be made to work per week. The contractor is not showing the salary for overtime as part of the salary to escape from these complications. This is something that cannot be avoided in the present scenario.
If you are certain that the contractor complies with EPF, ESIC, Bonus, etc., for all employees (which most contractors do not follow), then showing overtime as additional allowances can be accepted by you though not legal.
Siva
From India, Mumbai
Limit is 48 hours a quarter, not per month. Actually, by not showing overtime as OT but something else, when time records are available, you run the risk of later being asked to pay the actual overtime again. All someone has to do is convince most workers to say they didn't get overtime, and this allowance is for something else.
From India, Mumbai
From India, Mumbai
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