Respected Group Members,
Our company is a manufacturing firm located in Gujarat. I would like to understand the definition of wages on which we should pay overtime at double the rate of wages as specified under the Factories Act of 1948. Please provide your comments or replies on the following two points:
1. Should we consider Minimum Wages or Fixed Gross Wages when calculating overtime wages?
2. If the payment of overtime on minimum wages is specified under Certified Standing Orders, is it legally correct?
Yours Faithfully,
From India, Indore
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Our company is a manufacturing firm located in Gujarat. I would like to understand the definition of wages on which we should pay overtime at double the rate of wages as specified under the Factories Act of 1948. Please provide your comments or replies on the following two points:
1. Should we consider Minimum Wages or Fixed Gross Wages when calculating overtime wages?
2. If the payment of overtime on minimum wages is specified under Certified Standing Orders, is it legally correct?
Yours Faithfully,
From India, Indore
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Employee gross rate of wages is to be considered for calculation of overtime wages.
From India, Mumbai
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286From India, Mumbai
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DEEPU9813
This forum is not where cases are fought, so don't ask for proof. Any organization is covered either under the Factories Act or the Shops Act. Both acts state that the basis for overtime pay is twice the normal rate of wages. The normal rate refers to the monthly rate of wages, i.e., gross wages. Therefore, the wage rate of the concerned employee, whether minimum wages or otherwise, will be the basis for calculating overtime wages.
From India, Mumbai
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This forum is not where cases are fought, so don't ask for proof. Any organization is covered either under the Factories Act or the Shops Act. Both acts state that the basis for overtime pay is twice the normal rate of wages. The normal rate refers to the monthly rate of wages, i.e., gross wages. Therefore, the wage rate of the concerned employee, whether minimum wages or otherwise, will be the basis for calculating overtime wages.
From India, Mumbai
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Answer for Question 1: The minimum wage is fixed by the respective state government, and in reality, the actual wages may be higher than the minimum wage. Therefore, overtime (OT) shall be calculated based on the gross wages (wages + DA, if any).
Answer for Question 2: The payment of overtime on minimum wages as per the standing order means that if the fixed wages are lower than the minimum wages, then this will be applicable. However, it is not legally valid to have wages fixed below the prescribed minimum wages.
Remember to maintain a single line break between paragraphs for better readability.
From India, Jaipur
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Answer for Question 2: The payment of overtime on minimum wages as per the standing order means that if the fixed wages are lower than the minimum wages, then this will be applicable. However, it is not legally valid to have wages fixed below the prescribed minimum wages.
Remember to maintain a single line break between paragraphs for better readability.
From India, Jaipur
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1. If you are paying minimum wages only, then it will be calculated as double the minimum wages.
2. If you are paying more than minimum wages, i.e., BASIC+DA+HRA+COV+OTHER ALL, and this is more than the minimum wages, then OT will be calculated as double of Basic+DA.
From India, Indore
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2. If you are paying more than minimum wages, i.e., BASIC+DA+HRA+COV+OTHER ALL, and this is more than the minimum wages, then OT will be calculated as double of Basic+DA.
From India, Indore
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Dear Anamika,
Can you please elaborate on your statement "Payment of overtime on minimum wages is specified under Certified Standing Orders, then is it legally correct or not"? Which Certifying Authority has approved this? Can you please upload the relevant document to substantiate your statement?
From India, New Delhi
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Can you please elaborate on your statement "Payment of overtime on minimum wages is specified under Certified Standing Orders, then is it legally correct or not"? Which Certifying Authority has approved this? Can you please upload the relevant document to substantiate your statement?
From India, New Delhi
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It is possible for the companies to state in the statement of work that all workers will be paid more than the minimum wage or no worker will be paid less than the minimum wage. However, where a worker is paid a gross salary including basic pay and dearness allowance, they cannot be paid overtime by calculating wages based on the minimum wage instead of the gross salary, as that would result in reducing the benefits they are entitled to.
Request the seniors to correct this if there are any mistakes.
Email: c.neyimkhan@gmail.com
HR Consultant.
From India, Bangalore
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Request the seniors to correct this if there are any mistakes.
Email: c.neyimkhan@gmail.com
HR Consultant.
From India, Bangalore
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On this issue, the points mentioned by Shri KM Kogata (reproduced below) are important:
Quote ---
Ans. for Q # 2. Payment of OT on minimum wages as per standing order means if the wages so fixed are lower than minimum wages, then this will be applicable. But it is not legally valid to have fixed the wages below the prescribed minimum wages.---
Unquote // c.neyimkhan
From India, Bangalore
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Quote ---
Ans. for Q # 2. Payment of OT on minimum wages as per standing order means if the wages so fixed are lower than minimum wages, then this will be applicable. But it is not legally valid to have fixed the wages below the prescribed minimum wages.---
Unquote // c.neyimkhan
From India, Bangalore
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Minimum Wages -Revised-Fixed- in all scheduled employment in punjab-CPI adjustment-01.0 9.2013.pdf
Minimum Wages in Maharashtra for the period January 2018 to June 2018.xls