Whether overtime working attracts payment of bonus?

To start explaining this, we would like to inform you that ‘Overtime’ do not form part of “wages” for calculation of bonus.

In one case, the Hon’ble Supreme Court has held that the Tribunal was not justified in directing that the calculation of bonus should be made on the basis that the overtime payment to the employees constituted a part of the ‘wages’ of the employees.

To add up more, the definition of “wages” under the Payment of Bonus Act, 1965 also specifically excludes overtime.

Hope this will give clarity on pertained subject.

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