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HR glossary

Overtime (OT)

Overtime is work done beyond an employee's scheduled hours, usually paid at a premium rate rather than at the ordinary hourly wage.

Also known as: OT, overtime pay, overtime rules India

The premium is the point. Overtime is priced above normal time deliberately, so that extended hours are a decision with a cost rather than a free extension of the working day. Rates of one-and-a-half or twice the ordinary wage are common, and for covered workers in India the rate is set by statute rather than by the employer.

Measuring it is where systems fail. Overtime is the difference between hours worked and hours scheduled, which means it cannot be computed at all unless the schedule is recorded as carefully as the punches. A workforce on rotating or alternate patterns, where each person's expected hours differ, makes an eyeballed timesheet unusable.

Two design choices decide whether the number is trustworthy: whether overtime is measured against the shift window or the calendar day — which matters enormously for night shifts crossing midnight — and whether it requires prior approval. Retrospective overtime with no approval trail is the most common source of payroll disputes on the shop floor.

Some organisations offer compensatory time off instead of payment for work on rest days. That is a different instrument with different rules, and treating the two as interchangeable causes problems in both directions.

Statutory note

Overtime rates and daily and weekly hour limits for covered workers are set by the Factories Act and by state shops and establishments rules. They differ by state and by establishment type — check the ones that apply to you.

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