Overtime

Under the Factories Act, 1948 an adult worker may not be required to work more than nine hours in a day or forty-eight hours in a week. Work beyond either limit is overtime, and it is payable at twice the ordinary rate of wages. The Minimum Wages Act, 1948 sets an equivalent overtime obligation for employment scheduled under it.

The "ordinary rate of wages" for this purpose is defined more widely than the wage definition used for gratuity: it means basic wages plus the allowances the worker is entitled to, including the cash equivalent of any concessional food supply, but excluding bonus and overtime wages themselves. Applying the gratuity definition here understates overtime pay.

The statute fixes the rate but not the arithmetic for turning a monthly wage into an hourly one. Twenty-six days and an eight-hour day are common practice, and the resulting hourly rate is what most employers use, but that divisor is convention rather than law and can legitimately differ where contracts say otherwise.

Employers subject to the Factories Act also face limits on total overtime in a quarter and record-keeping requirements. Paying overtime correctly does not by itself make excessive hours lawful.