Section 59 of FA, 1948 : Section 59: Extra Wages For Overtime

Explanation using Example

Imagine a factory worker named Rohan who typically works 8 hours a day for 6 days a week at a basic wage of ₹300 per day. One week, due to an urgent order, Rohan is asked to work 2 extra hours each day. At the end of the week, Rohan has worked a total of 60 hours, which is 12 hours more than the standard 48-hour workweek.

According to Section 59 of The Factories Act, 1948, Rohan is entitled to overtime wages for the additional 12 hours. His overtime wage is calculated at twice his ordinary rate of wages. Rohan's ordinary rate includes his basic wage of ₹300 plus any eligible allowances. Assuming he has no additional allowances, his ordinary rate is ₹300.

For the overtime hours, Rohan should be paid at the rate of ₹600 per hour (twice his ordinary rate). Therefore, for the 12 hours of overtime, Rohan would earn an additional ₹7,200 (12 hours x ₹600 per hour), over and above his regular earnings.

If Rohan was a piece-rate worker, his overtime rate would be calculated based on the average daily earnings of the preceding month for the same job. If Rohan had not worked the previous month or had no identical job to compare, his overtime rate would be based on his average earnings of the week in which he did the overtime work.