New Wage Code: Is Your Overtime Pay 2x Now?

The new wage code says overtime must be paid at double the normal rate. But central government employees follow separate service rules, so their overtime allowance hasn't automatically doubled. Here's what it means for you.

Here's what happened: The Code on Wages mandates overtime pay at a minimum of twice the normal wage rate for eligible workers in India.. Central government employees are governed by separate service rules; their Overtime Allowance is not automatically revised by the new wage code.. State governments must individually notify the wage code rules before private sector employees in their state can claim the doubled overtime benefit..

What you should do: Check your appointment letter and HR policy to see how overtime pay is currently calculated and whether it meets the 2x threshold.. Verify if your state government has issued a gazette notification bringing the Code on Wages rules into effect for private establishments.. If you are a central government employee, request your accounts or HR department for the latest OTA circular applicable to your grade and department..

Under the new wage code, 'wages' for overtime must include basic pay plus dearness allowance — employers cannot base the 2x calculation on basic pay alone to reduce your payout.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.