Rate and Components of Overtime Wages for Workers of a Factory

In the last article we have discussed about whether casual/ daily rated workers are entitled to overtime or not under the labour laws in India and the answer came affirmative if the workers work for more than 9 hours a day and 48 hours a week. Here, we will now discuss about how much overtime wages needs to be paid to such casual/ daily rated workers working a factory in India.

As per Section 59 of the Factories Act, 1948 for overtime the causal/ daily rated workers and also piece rated workers are entitled to wages at the rate of twice of “ordinary rate of wages” as defined under Sub Section (2) of Section 59 of the Act which means basic wages plus allowances including the cash value of the benefit of the concessional sale of food grains and other articles. Ordinary rate of wages suggest inclusion of such allowances to which the worker is for the time being entitled to.

Thus while calculating overtime the allowances which are for the time being paid to the worker is required to be calculated on such allowances also. Sub Section (2) of Section 59 of the Act gives a clear guideline to include allowances even HRA for the purpose of computation of overtime wages.

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