How is overtime calculated under the Factories Act in India?

Under the Factories Act, a worker who works beyond the prescribed daily or weekly hours is entitled to overtime wages at twice the ordinary rate of wages. The ordinary rate for this purpose generally means basic wages plus applicable allowances, calculated on a per-hour basis for the extra hours worked.

The Act also caps total working hours and limits the extent of permissible overtime within a quarter, to protect worker welfare. The new labour codes carry forward the double-rate principle for overtime while standardising definitions across sectors. Because exact hour limits and the wage components included can vary with state rules and the applicable code provisions, employers in manufacturing should configure overtime against the current rules for their state.