Hi,
OR
2. Overtime wage = 2 (Basic+DA)
help me,clear my confusion.
From India, Bhilai
Does the ordinary rate of wages(for overtime calculation in an industry) include allowances like canteen allowance,conveyance allowance,mining allowance,washing allowance etc? What I really want to know is among the following which one is correct?
1. Overtime wage = 2 (Basic+DA+all other allowances )OR
2. Overtime wage = 2 (Basic+DA)
help me,clear my confusion.
From India, Bhilai
No reply till now.Gone through various posts in this site regarding overtime calculation,but I am still confused.I think first option is the correct one.Please correct me if I am wrong.
From India, Bhilai
From India, Bhilai
Dear Member,
In general first one is correct one. If your establishment is covered under The Factories Act, 1948 then go through section 59(2) for 'ordinary rate of wages'. First examine the applicability of the act under which you are liable to pay OT & then go through that Act for calculation of amount of OT.
Regards,
R.N.Khola
From India, Delhi
363In general first one is correct one. If your establishment is covered under The Factories Act, 1948 then go through section 59(2) for 'ordinary rate of wages'. First examine the applicability of the act under which you are liable to pay OT & then go through that Act for calculation of amount of OT.
Regards,
R.N.Khola
From India, Delhi
Dear all,
Thanks for the response.Sorry that I haven't mentioned that my industry comes under the purview of mines act 1952 (never thought that it is so complicated,though I have mentioned about the mining allowance).
1. Section 33 of mines act says that OT wages = 2 (ordinary rate of wages)
2. Section 9A of mines act gives explanation for ordinary rate of wages as
Explantion: For the purpose of this sub-section, “ordinary rate of wages” means
the basic wages plus any dearness allowance and underground allowance and
compensation in cash including such compensation, if any accruing through the free
issue of foodgrains and edible oils as persons employed in a mine may, for the time
being, be entitled to, but does not include a bonus (other than a bonus given as incentive for production) or any compensation accruing through the provision of amenities such asfree housing, free supply of coal, medical and educational facilities, sickness allowance,supply of kerosen oil baskets, tools and uniforms.
don't you think that all the allowances included? I think it even includes the production incentives.Can any body interpret the above section 9A, for me?
Regards
vipin
From India, Bhilai
Thanks for the response.Sorry that I haven't mentioned that my industry comes under the purview of mines act 1952 (never thought that it is so complicated,though I have mentioned about the mining allowance).
1. Section 33 of mines act says that OT wages = 2 (ordinary rate of wages)
2. Section 9A of mines act gives explanation for ordinary rate of wages as
Explantion: For the purpose of this sub-section, “ordinary rate of wages” means
the basic wages plus any dearness allowance and underground allowance and
compensation in cash including such compensation, if any accruing through the free
issue of foodgrains and edible oils as persons employed in a mine may, for the time
being, be entitled to, but does not include a bonus (other than a bonus given as incentive for production) or any compensation accruing through the provision of amenities such asfree housing, free supply of coal, medical and educational facilities, sickness allowance,supply of kerosen oil baskets, tools and uniforms.
don't you think that all the allowances included? I think it even includes the production incentives.Can any body interpret the above section 9A, for me?
Regards
vipin
From India, Bhilai
Dear Vipin
Overtime wages payable is - basic+DA+ all allowances to be included and it should be double. However most of the organisations pay only basic + DA and interpret wages to their requirement and understanding.
Sec.59(2)(1) of Factories Act, 1948 defines - "Ordinary rate of wages" means basic wages plus such allowances including the cash equivalent of the advantage accruing through the concessional sale to workers of foodgrains and other articles, as the worker is for time being entitled to, but does not include a bonus and wages for overtime work.
In the above definition, the word "such allowances" is interpreted by organisations as allowance something similar to basic (which attracts PF etc.) and hence they pay only basic + DA and do not include other allowances. So based on this and keeping sufficient background to convince the Government authorities in case of inspection, a suitable discretory decision may be taken to pay OT either by including all allowances or pay only basic+DA.
K.Ramachandra
Bangalore
Overtime wages payable is - basic+DA+ all allowances to be included and it should be double. However most of the organisations pay only basic + DA and interpret wages to their requirement and understanding.
Sec.59(2)(1) of Factories Act, 1948 defines - "Ordinary rate of wages" means basic wages plus such allowances including the cash equivalent of the advantage accruing through the concessional sale to workers of foodgrains and other articles, as the worker is for time being entitled to, but does not include a bonus and wages for overtime work.
In the above definition, the word "such allowances" is interpreted by organisations as allowance something similar to basic (which attracts PF etc.) and hence they pay only basic + DA and do not include other allowances. So based on this and keeping sufficient background to convince the Government authorities in case of inspection, a suitable discretory decision may be taken to pay OT either by including all allowances or pay only basic+DA.
K.Ramachandra
Bangalore
Dear Vipin My clarification in the back ground of Factories Act, holds good for Mines ACt also. May take a suitable discretory decision based on the above. Regards K.Ramachandra
Dear all,
Thanks for the replies and help.Through this forum I would like to be absolutely clear.I am sorry, if anybody feels as if I am repeating the question or for the explanation of explanation.
section 9A of mines act 1952 explains that
“ordinary rate of wages” means the basic wages plus any dearness allowance and underground allowance and compensation in cash including such compensation, if any accruing through the free issue of food grains and edible oils as persons employed in a mine may, for the time being, be entitled to, but does not include a bonus (other than a bonus given as incentive for production) or any compensation accruing through the provision of amenities such as free housing, free supply of coal, medical and educational facilities, sickness allowance,supply of kerosene oil baskets, tools and uniforms.
doesn't this mean
ordinary rate of wage = Basic+DA+under ground allowances+cash
compensation or allowances+cash equivalent of free
issue of food grains and edible oil( though free)+
production incentives
regards
vipin
From India, Bhilai
Thanks for the replies and help.Through this forum I would like to be absolutely clear.I am sorry, if anybody feels as if I am repeating the question or for the explanation of explanation.
section 9A of mines act 1952 explains that
“ordinary rate of wages” means the basic wages plus any dearness allowance and underground allowance and compensation in cash including such compensation, if any accruing through the free issue of food grains and edible oils as persons employed in a mine may, for the time being, be entitled to, but does not include a bonus (other than a bonus given as incentive for production) or any compensation accruing through the provision of amenities such as free housing, free supply of coal, medical and educational facilities, sickness allowance,supply of kerosene oil baskets, tools and uniforms.
doesn't this mean
ordinary rate of wage = Basic+DA+under ground allowances+cash
compensation or allowances+cash equivalent of free
issue of food grains and edible oil( though free)+
production incentives
regards
vipin
From India, Bhilai
As per logic, allowances that are fixed in nature and are not linked to the Basic pay for their calculations may not be considered for Overtime, since these are fixed and are already paid with the ordinary rate of wages.
All other allowances which depend upon the Basic Pay for calculation may be taken into consideration, as these vary with the basic pay and should also be part of overtime calculations.
Am I right.
From India, Chandigarh
All other allowances which depend upon the Basic Pay for calculation may be taken into consideration, as these vary with the basic pay and should also be part of overtime calculations.
Am I right.
From India, Chandigarh
Vipin and Surendera
With the above explanations and clarifications by me earlier, with no more confusion, in the interest of both company and worker, following descretory decision may be taken:
1. ordinary wages - basic + DA + other allowances which are fixed and which are a part of monthly salary components to be considered for OT
2. Incentive - if it is variable, and related or linked to attendance, need not be considered
3. If food grains, edible oil is given on a concessional rate, the cost of which may be considered for inclusion in the OT payable; if they are free, as no cost is involved, this need not be considered
4. If any other allowances like education allowance, sickness allowance, etc. is being paid as a part of monthly salary component, it should be taken. If it is paid as quarterly, annually as a welfare measure, this need not be taken.
Mr Vipin may take a decision based on the above, without having any more confusion and if government authorities question on any issues at a later date, the same can be appropriately dealt with them by either convincing them or by pay the dues to the concerned.
Hope this is clear.
Regards
K.Ramachandra - Bangalore
With the above explanations and clarifications by me earlier, with no more confusion, in the interest of both company and worker, following descretory decision may be taken:
1. ordinary wages - basic + DA + other allowances which are fixed and which are a part of monthly salary components to be considered for OT
2. Incentive - if it is variable, and related or linked to attendance, need not be considered
3. If food grains, edible oil is given on a concessional rate, the cost of which may be considered for inclusion in the OT payable; if they are free, as no cost is involved, this need not be considered
4. If any other allowances like education allowance, sickness allowance, etc. is being paid as a part of monthly salary component, it should be taken. If it is paid as quarterly, annually as a welfare measure, this need not be taken.
Mr Vipin may take a decision based on the above, without having any more confusion and if government authorities question on any issues at a later date, the same can be appropriately dealt with them by either convincing them or by pay the dues to the concerned.
Hope this is clear.
Regards
K.Ramachandra - Bangalore
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Rate of Min.wages&DA -above 200 bed.pdf