In a Nutshell

The new wage code has made one thing very clear: any work beyond a 48-hour week must be compensated at double your normal rate. But what if you stay just ten minutes late? Does that count? That depends not on the code alone, but on your state rules, employer contract, and the draft guidelines that are still evolving.

The Breakdown

What the law actually says

The Code on Wages, 2019, introduces a clear provision in Section 14: wherever an employee works beyond the normal hours, the employer must pay for “every hour or for part of an hour” of that extra work at an overtime rate no less than twice the ordinary wage rate.

The framework also states that a normal working day shall consist of eight working hours, with total weekly work capped at 48 hours. Any additional hours beyond this cap qualify as overtime.

The grey area: how to count a “part of an hour”?

The code itself does not prescribe a universal rounding rule for short overtime periods (such as 5, 10, or 20 minutes). However, the draft rules under the Occupational Safety, Health and Working Conditions (OSH & WC) Code, 2020 have proposed that:

“In calculating overtime on any day, a fraction of an hour between 15 to 30 minutes shall be counted as 30 minutes.”

But importantly, these remain draft rules and are not yet mandatory for all employers.

The practical reality for employees

Given that the rounding provision is not a mandatory requirement under the final wage code:

  • Different companies may follow different rounding practices based on their contracts, standing orders, or state regulations.
  • Some employers may pay you proportionally for each minute of overtime.
  • Others may apply quarter-hour or half-hour rounding for payroll convenience.

What this means for you: You cannot assume that your employer is legally obligated to round up short extra minutes. Your actual overtime pay depends on your specific employment contract, company policy, and applicable state rules.

Overtime limits: daily and quarterly

While the Central framework applies nationwide:

  • State governments may set quarterly caps on overtime hours — typically between 125 to 144 hours per three-month period.
  • Overtime work also requires the explicit consent of the employee.

The OSH & WC Code’s Draft Rules provide that no worker can exceed 125 hours of overtime work in a quarter

The Compliance Lens — areas for improvement

  • Ambiguity in fractional payment: The wage code mandates payment for “part of an hour” but does not define rounding. This creates compliance uncertainty for payroll teams and can lead to inconsistent enforcement.
  • Draft rules vs final enactment: Many articles currently report rounding rules as if they are already fully enforced, when they are still in draft stages. This gap between reporting and reality misleads employees.
  • State-level variation: Without uniform national guidelines for minute-by-minute overtime calculation, workers in different states or different companies may receive unequal pay for identical extra work.

What employees should check instead of assuming

  • Does my company’s employment contract or handbook specify how overtime is rounded?
  • Does my state have a specific shops and establishments act that governs fractional overtime?
  • Am I being paid proportionally or on a rounded basis for extra minutes worked?
  • Have I given my written consent for any overtime work?

Understanding these elements, rather than assuming universal rules, will help you fairly evaluate your overtime compensation.

Disclaimer

This content is for general informational purposes only and does not constitute legal or professional advice. Labour law implementations vary by state and employer. Readers should consult qualified professionals for advice specific to their circumstances.