Overtime management for manufacturing plants

Where plant overtime comes from

Plant overtime has a few usual causes, and each has a different fix. Overtime caused by absence on the next shift needs better cover and a reliever pool. Overtime from month-end dispatch needs earlier production planning. Ask supervisors to note the cause in the shift report, so the plant head can see which of these drives the monthly bill.

• Double shift when the reliever does not report
• Month-end dispatch against customer schedules
• Breakdown repairs that cannot wait for the next shift
• Weekly off working to recover lost production
• Stock taking and audits on a Sunday

The legal rate and the consent rule

Under the OSH Code, ordinary daily work is capped at eight hours, with intervals, spread-over and weekly limits fixed by government notification. Work beyond the prescribed hours is overtime, paid at twice the ordinary wage rate, with the worker's consent. A supervisor therefore cannot simply announce that the A shift stays till 6 pm. Ask, record who agreed, and keep a monthly cap per worker so the one willing operator on the line does not carry all the extra hours. See the working hours and overtime rules.

Worked example: a CNC operator's overtime

Suresh Kumar, a CNC operator in Coimbatore, has a monthly gross of ₹20,800. The plant pays on a fixed 26-day basis, so his day rate is ₹800 and his hourly rate is ₹100. In the month he stays back 2 hours on 5 days and works 8 hours on one weekly off, so approved overtime is 18 hours. At twice the hourly rate, ₹200 an hour, his overtime earning is ₹3,600. If the plant pays weekly off work at a higher multiplier, those 8 hours are priced separately at that rate.

Approval on the same day, not at month end

Overtime approved a month later is really overtime negotiated. Detect extra hours from punches every night, let the supervisor approve or reject the next morning while the shift is fresh in memory, and let HR approve after that. Count only overtime of at least 30 minutes and round down to 15-minute blocks, and tell workers the rule in advance. Hours that fail the rule never reach payroll, which ends arguments over a 12-minute wait at the gate.

How to set it up in ZeniaHR

1. In the Overtime policy, count overtime after shift end, with a minimum of 30 minutes and rounding down to 15 minutes.
2. Set pay multipliers for working days, weekly offs and holidays at 2 or above, in line with the legal rate of twice the ordinary wage.
3. Make approval required, set a monthly cap per worker, and choose whether overtime is paid, given as comp-off or left to the worker's choice.
4. Let nightly detection pick up overtime from gate punches; supervisors approve in My Team, then HR approves.
5. Use bulk approve for a whole line after a planned dispatch day, and reject hours that have no production reason.
6. Clear the overtime queue on the Dashboard before payroll, since approved hours become an earning at gross day rate / 8 x hours x multiplier.

Read more about overtime in ZeniaHR.

Roles this applies to

Frequently asked questions