Hi!
My question is regarding overtime. In the Factories Act, the amount which is used for overtime is basic wages and "allowance"
I want to know what kind of 'allowance' is considered?
My company does not give dearness allowance, which is fine, because being a private company it does not necessarily need to give a dearness allowance, instead it gives "special allowance"
Coming to the issue, for overtime calcuation it is using basic + (house rent allowance + conveyance allowance), which looks pretty weird for overtime. There seems to be no logic to have HRA and conveyance for OT.
I think these 'allowances' are given instead of 'special allowance' which is what we are entitled to.. I may be incorrect in my interpretation. Experts please let me know what is correct.
Reference of the Act:
The Factories Act, 1948 (Act No. 63 of 1948), as amended by the Factories (Amendment) Act, 1987 (Act 20 of 1987)
CHAPTER VI.- Working Hours of Adults: Section 59
1) Where a worker works in a factory for more than nine hours in any day or for more than forty-eight hours in any week, he shall, in respect of overtime work, be entitled to wages at the rate of twice his ordinary rate of wages.
(2) For the purposes of sub-section (1), "ordinary rate of wages" means the basic wages plus such allowances, including the cash equivalent of the advantage accuring through the concessional sale to workers of food grains and other articles, as the worker is for the time being entitled to, but does not include a bonus and wages and wages for overtime work.
