Dear Experts,
Please advise if overtime hours exceed 50 hours per quarter on a regular basis, is there any legal provision that helps to avoid legal violations? This could include approvals, agreements, penalties, or special case considerations.
In our case, we work 10 hours a day with 12 hours of overtime per week, which is compliant with the factory act. However, it violates the limit of 50 hours per quarter. We compensate for overtime hours at a double rate.
Please advise if there is any solution available.
Thank you.
From India, Delhi
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5Please advise if overtime hours exceed 50 hours per quarter on a regular basis, is there any legal provision that helps to avoid legal violations? This could include approvals, agreements, penalties, or special case considerations.
In our case, we work 10 hours a day with 12 hours of overtime per week, which is compliant with the factory act. However, it violates the limit of 50 hours per quarter. We compensate for overtime hours at a double rate.
Please advise if there is any solution available.
Thank you.
From India, Delhi
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There is apparently no legal remedy for escaping the provisions of the Factories Act, 1948 on this issue.
My suggestion is, instead of looking for loopholes in statutes, you may look at why overtime (OT) is so high in your organization and aim to become a "Zero OT" company. There are many companies I know of like Mather & Platt, Hyundai, Cummins, etc., where manpower planning and work scheduling are done in such a way as to avoid any OT payment whatsoever. Hence, these companies have no legal headaches concerning OT.
By the way, why pay double OT when you can get the same work done in a single payment by adding a few more heads!?
From India, Mumbai
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My suggestion is, instead of looking for loopholes in statutes, you may look at why overtime (OT) is so high in your organization and aim to become a "Zero OT" company. There are many companies I know of like Mather & Platt, Hyundai, Cummins, etc., where manpower planning and work scheduling are done in such a way as to avoid any OT payment whatsoever. Hence, these companies have no legal headaches concerning OT.
By the way, why pay double OT when you can get the same work done in a single payment by adding a few more heads!?
From India, Mumbai
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Dear M.I.L.,
You are clearly violating the Factories Act by working 10 hours per day and 60 hours per week. There is no mechanism to overcome the statutory obligation in this regard. As pointed out by Dixon, you may have to do some manpower planning and rearrange the workforce in shifts to resolve the issue.
KK
From India, Bhopal
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You are clearly violating the Factories Act by working 10 hours per day and 60 hours per week. There is no mechanism to overcome the statutory obligation in this regard. As pointed out by Dixon, you may have to do some manpower planning and rearrange the workforce in shifts to resolve the issue.
KK
From India, Bhopal
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Dear Mr. Dixon & Knair,
Thank you for your reply. I agree with Mr. Dixon on zero OT, but we have our genuine problem. I hope you experts try to understand the situation.
We have set up a new manufacturing plant with limited machines and manpower; our strength is only 50. To retain manpower on a minimum wage of 4500 was very difficult. So, we started offering 2 hours of OT and pay them double the rate for OT. By doing this, the workers get 1.5 and we get 2 extra hours of work on the same machines. This strategy has helped us manage to retain our manpower.
In my opinion, experts like you who belong to and refer to big concerns where manpower hiring and retaining are no big deal, may not fully understand the challenges faced by smaller scale units. In these smaller concerns, workers often work 12 to 14 hours a day, including night shifts. While from an outside perspective, this may seem like exploitation, for those working there, it is a means to earn a better livelihood. Many of these workers are not literate, skilled, or expert due to circumstances beyond their control. They only have one option – to work extra hours to make ends meet. While I am not saying you are wrong or justifying this working mechanism, it is important to acknowledge the realities that exist.
Our current focus is on improving the working conditions. The first step towards this improvement is the compliance with government regulations in a true sense. I have come here seeking some solutions.
I do not agree with Knair that 10 hours a day is a crime. As per FA, 2 hours a day or 12 hours a week of OT is allowed. Please correct me if I am wrong.
Thank you.
From India, Delhi
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Thank you for your reply. I agree with Mr. Dixon on zero OT, but we have our genuine problem. I hope you experts try to understand the situation.
We have set up a new manufacturing plant with limited machines and manpower; our strength is only 50. To retain manpower on a minimum wage of 4500 was very difficult. So, we started offering 2 hours of OT and pay them double the rate for OT. By doing this, the workers get 1.5 and we get 2 extra hours of work on the same machines. This strategy has helped us manage to retain our manpower.
In my opinion, experts like you who belong to and refer to big concerns where manpower hiring and retaining are no big deal, may not fully understand the challenges faced by smaller scale units. In these smaller concerns, workers often work 12 to 14 hours a day, including night shifts. While from an outside perspective, this may seem like exploitation, for those working there, it is a means to earn a better livelihood. Many of these workers are not literate, skilled, or expert due to circumstances beyond their control. They only have one option – to work extra hours to make ends meet. While I am not saying you are wrong or justifying this working mechanism, it is important to acknowledge the realities that exist.
Our current focus is on improving the working conditions. The first step towards this improvement is the compliance with government regulations in a true sense. I have come here seeking some solutions.
I do not agree with Knair that 10 hours a day is a crime. As per FA, 2 hours a day or 12 hours a week of OT is allowed. Please correct me if I am wrong.
Thank you.
From India, Delhi
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I have one suggestion: "If we reach a mutual agreement with our workers' welfare committee on a 2-hour overtime, based on manpower retention, that will work. Please advise. I am sure there must be a way out of our problem."
From India, Delhi
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From India, Delhi
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There is apparently no legal remedy for escaping the provisions of the Factories Act, 1948 on this issue. My suggestion is, instead of looking for loopholes in statutes, you may look at why overtime is so high in your organization and aim to become a "zero OT" company. There are many companies I know of like Mather & Platt, Hyundai, Cummins, etc., where manpower planning and work scheduling are done in such a way as to avoid any overtime payment whatsoever. Hence, these companies have no legal headaches concerning overtime.
By the way, why pay double overtime when you can get the same work done in a single pay by adding a few more heads?
If you are certain that work will continue, you may hire new workers, with working hours limited to 8 hours (including lunch and tea breaks) as per statutes. For engineering workmen, the company operates on a 24-hour cycle and can run on shifts A, B, C, and one in the general shift (who will be a reliever) by increasing the manpower and offs. Therefore, four workers are required per day. If you calculate the amount you are paying to two persons, it can be adjusted to three persons, with only one person considered excess, which is needed to maintain zero overtime without deviation as per the Factories Act.
If the management is not accepting this proposal, you can hire temporary workers on an off-roll basis through contractors or outsourcing.
Regards,
Srao
Hyderabad
9849562900
From India, Hyderabad
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By the way, why pay double overtime when you can get the same work done in a single pay by adding a few more heads?
If you are certain that work will continue, you may hire new workers, with working hours limited to 8 hours (including lunch and tea breaks) as per statutes. For engineering workmen, the company operates on a 24-hour cycle and can run on shifts A, B, C, and one in the general shift (who will be a reliever) by increasing the manpower and offs. Therefore, four workers are required per day. If you calculate the amount you are paying to two persons, it can be adjusted to three persons, with only one person considered excess, which is needed to maintain zero overtime without deviation as per the Factories Act.
If the management is not accepting this proposal, you can hire temporary workers on an off-roll basis through contractors or outsourcing.
Regards,
Srao
Hyderabad
9849562900
From India, Hyderabad
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There is a provision in the Factory Act that allows the factory inspector to relax the limit of overtime for a limited period of time and for certain reasons to be recorded. We have a client who got an exemption from the overtime rule for 1 year as the factory is in a remote place where trained manpower was not readily available.
The maximum overtime allowed under the increased limit will be 75 hours a quarter. The talk of workers wanting overtime, etc., is just a cover-up for exploitation. How can a person working 10 or 12 hours a day survive in the long term? Including travel time, he will be home less than 8 hours. Not enough to have food and rest.
The larger companies get candidates because they are willing to pay more than minimum wages. Considering the amount you are paying for overtime, I think you can afford to increase the wage rate to match the market rate. You will also get better productivity from workers working 8-hour shifts.
From India, Mumbai
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The maximum overtime allowed under the increased limit will be 75 hours a quarter. The talk of workers wanting overtime, etc., is just a cover-up for exploitation. How can a person working 10 or 12 hours a day survive in the long term? Including travel time, he will be home less than 8 hours. Not enough to have food and rest.
The larger companies get candidates because they are willing to pay more than minimum wages. Considering the amount you are paying for overtime, I think you can afford to increase the wage rate to match the market rate. You will also get better productivity from workers working 8-hour shifts.
From India, Mumbai
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Overtime is a disease. To attract workers and retain them within an organization, the only way is to pay more and provide additional benefits such as a canteen, transportation, shoes, uniforms, etc. In today's context, no worker will be willing to work for minimum wages when other industries offer better salaries. If they can earn the same or more by working only 8 hours, why should they spend 12-13 hours a day to earn?
Don't assume that workers are illiterate. While some may be illiterate, they are often more calculating than you and I. Exploiting workers under the guise of "paying OT" is not considered a healthy practice by the law. Therefore, it is better to hire more employees rather than rely on paying overtime.
V. Balaji
From India, Madras
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Don't assume that workers are illiterate. While some may be illiterate, they are often more calculating than you and I. Exploiting workers under the guise of "paying OT" is not considered a healthy practice by the law. Therefore, it is better to hire more employees rather than rely on paying overtime.
V. Balaji
From India, Madras
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I understand the concern is about "Genuine over Time" and not exploitation on either side. There are several companies running continuous chemical processes, where the concept of Duty Post exists. This means that 24-hour manning is essential (in A B C shifts) and overtime (OT) is generated when a reliever is absent. If the respective reliever takes more than nine leaves within a span of three months, the OT can exceed the permissible maximum of 75 hours as an exception. They ensure that no workman is allowed to work for more than 16 hours. Please note that in most cases, it involves manning and controlling plant parameters, either manually (operation of valves, etc.) or through DCS panels.
The remedy may involve informing the Factory Inspectorate about such exceptions with justifications. The inspectorate places more emphasis on the safety of the plant, as no chemical plant should be left unmanned.
It is essential to be sincere by paying them twice the rate of other shifts and OT allowances, in addition to taking care of their food and rest periods, etc.
Regards,
Shailesh Parikh
Vadodara, Gujarat
99 98 97 10 65
From India, Mumbai
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The remedy may involve informing the Factory Inspectorate about such exceptions with justifications. The inspectorate places more emphasis on the safety of the plant, as no chemical plant should be left unmanned.
It is essential to be sincere by paying them twice the rate of other shifts and OT allowances, in addition to taking care of their food and rest periods, etc.
Regards,
Shailesh Parikh
Vadodara, Gujarat
99 98 97 10 65
From India, Mumbai
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Dear M.I.L.,
While empathizing with your problem, let me point out that the minimum wages in Delhi, as per press reports, are Rs. 7722 for unskilled workers and Rs. 9386 for skilled operators. I am unable to understand how you are able to operate at a wage level of Rs. 4500. However, considering your situation, all I can say is that legally, you are in an indefensible position.
KK
From India, Bhopal
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While empathizing with your problem, let me point out that the minimum wages in Delhi, as per press reports, are Rs. 7722 for unskilled workers and Rs. 9386 for skilled operators. I am unable to understand how you are able to operate at a wage level of Rs. 4500. However, considering your situation, all I can say is that legally, you are in an indefensible position.
KK
From India, Bhopal
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