Question

Q:

Alfatech LLC, a leading battery manufacturing company has 04 employees in the production department named Mohammed, Khalid, Salim and Ahmed. Alfatech pays RO 5 per hour rate, for 40 hours per week. According to the agreement, they all are eligible for overtime (time-and-a-half pay).

As per company records of the last month, working hours of workers is as per below:

Mohammed 189 hours, Khalid 191 hours, Salim 160 hours and Ahmed worked for 168 hours.

a) How much gross pay all four will receive?

b) Do you agree with companies 40 hours per week working hour’s policy? Give reasons to your answer

c) What do you mean by overtime? Do you agree with more pay for overtime working hours? Discuss analytically.

Answer 1

a

	Mohammad	Khalid	Salim	Ahmed
No.of working hrs	189	191	160	168
Rate per hour	5	5	5	5
Gross pay	945	955	800	840

b)

	Mohammad	Khalid	Salim	Ahmed
Actual No.of hours	189	191	160	168
Weekly working policy	40	40	40	40
Monthly hours (4.33 weeks in month)	173	173	173	173
Overtime	16	18	-	-
Wages
Regular working(rate 5)	865	865	800	840
Overtime (rate= 5+2.5)	120	135
Total	985	1000	800	840

Excess payment of wages to Mohammad and Khalid due to over time policy by Ro 40 and RO 45 respectively.

1. Overtime policy increases the confidence of employees. They get happy and ready to work for more time

2. Employees are correctly compensated for their duties

3. Employee encourage to work for time.

Here Alfatech made agreement to pay overtime inexcess of 40 hours weekly. Based on above facts we can conclude that company should have overtime policy.

But on the other hand considering excess payment of wages is results in to increase in cost of production to the company, so it is not good having overtime policy.

c)

Overtime means working by an employee for morethan it's actual capacity. And to extra pay for extra hours worked by employee is called over time pay. Amount of time working beyond normal working time. But the excessive payment of overtime is not good.

LLC having policy to pay for over time is one and half extra other than normal pay.

Reasons for overtime

1. To handle work pressure, emergency

2. For employees healthy performance

3.correctly and consistent compensation to employees

4. As per labour policy required to pay extra to compliance with laws.

Therefore company should have suitable overtime policy