How Overtime Wages works
When a worker works beyond the prescribed daily or weekly hours (commonly 9 a day or 48 a week), the hours over the limit are paid at double the ordinary rate. The ordinary rate is worked out from the worker's wages, and the overtime multiplier is applied to it.
Why Overtime Wages matters
Underpaying overtime, or paying it at single rate, is a common violation. For manpower firms with shift workers, correct overtime calculation is both a legal duty and a driver of wage cost.
Getting overtime right
Overtime is one of the clearest rules in Indian wage law and one of the most commonly broken. The principle is straightforward: hours worked beyond the normal daily or weekly limit are paid at twice the ordinary rate. The ordinary rate is derived from the worker's wages, so it moves with the minimum wage; a higher minimum wage means a higher overtime rate as well.
For firms running shifts, security, housekeeping, manufacturing, the risk is not the concept but the calculation at scale. Each worker's overtime must be captured from attendance, priced at double their correct ordinary rate, and reflected in the wage register. Paying a flat amount, or single rate, for overtime is underpayment. Tying overtime directly to the attendance and wage system keeps it accurate and auditable across hundreds of workers.
Frequently asked questions
What is the overtime rate in India?
Overtime is generally paid at twice the ordinary rate of wages under the Minimum Wages Act and the Factories Act, for hours worked beyond the normal limit.
What are normal working hours?
Commonly up to 9 hours a day and 48 hours a week, though this varies by state rules and the applicable law for the establishment.