Overtime allowance for central govt employees: What new wage code means for non-gazetted and gazetted staff

The issue came up in the Lok Sabha on August 5, 2026, when the government was asked whether overtime allowance for Central Government employees had been revised in line with the Code on Wages, 2019, which provides for overtime payment at not less than twice the normal rate of wages.

The question also sought to know whether the government was considering extending overtime allowance to gazetted Central Government employees, who are presently excluded from such payment.

What has the government said about overtime allowance?

The Department of Personnel and Training (DoPT) said that overtime allowance for eligible non-gazetted Central Government employees is regulated according to the recommendations of the respective Pay Commissions.

According to the government, an Office Memorandum issued on June 19, 2018, based on the Department of Expenditure’s decision on the recommendations of the 7th Pay Commission, provided for discontinuation of OTA for all categories of employees except Operational and Industrial employees governed by statutory provisions.

This means the implementation of the Code on Wages from November 21, 2025, does not automatically mean that all Central Government employees working beyond normal hours will start receiving overtime at double their regular rate.

The existing Central Government framework continues to determine who is eligible for OTA and at what rate.

What does the Code on Wages say about overtime?

The Code on Wages, 2019 has a separate provision on overtime.

Section 14 says that where an employee works beyond the number of hours that constitute a normal working day, the employer has to pay overtime for every extra hour, or part of an hour, at a rate not less than twice the normal rate of wages.

The Code therefore establishes a statutory overtime benchmark of at least twice the normal rate where its overtime provisions apply.

The Central Government’s rules notified in 2026 also provide that a normal working day for an employee whose wage period is based on a daily basis is eight hours. For employees whose wage period is other than daily, the normal working hours are to be fixed so that weekly working hours do not exceed 48 hours.

However, for Central Government employees, eligibility for OTA is not determined simply by looking at Section 14 of the Code. Their allowance continues to be governed by the applicable service rules, Pay Commission decisions and government orders.

Central government employees: What are the existing OTA rates?

The government said that the hourly rates for OTA payable to eligible Central Government employees were prescribed through an Office Memorandum dated March 19, 1991.

These rates have not been revised, based on decisions taken by the Department of Expenditure on the recommendations of successive Pay Commissions.

This is an important point for employees because the overtime rate framework dates back several decades, even though basic pay, allowances and other components of government employees’ compensation have changed over the years.

The government has also clarified that the 7th Pay Commission-related decision in 2018 discontinued OTA for several categories of employees, with the exception of Operational and Industrial employees covered by statutory provisions.

What about gazetted Central Government employees?

The question raised in Parliament specifically sought to know whether the government is considering extending overtime allowance to gazetted Central Government employees who are currently excluded from the benefit.

For now, the important distinction is that the existing OTA framework does not provide a general overtime allowance to all Central Government employees simply because they work beyond their regular hours.

Therefore, a gazetted employee cannot assume that the double-overtime provision under Section 14 of the Code on Wages automatically creates an entitlement to OTA.

Any extension of OTA to gazetted employees would require a change in the applicable government rules or policy governing their service conditions.

Why the Code on Wages has created confusion

The confusion largely comes from the fact that the Code on Wages contains a clear provision for overtime at twice the normal rate.

The provision is straightforward for employees covered by the Code’s overtime framework: work beyond the prescribed normal working hours attracts overtime at not less than twice the normal rate of wages.

But the Central Government’s own response makes it clear that OTA for its employees has historically been linked to Pay Commission recommendations and specific government orders.

The latest clarification therefore does not amount to a blanket announcement that all Central Government employees are now entitled to double-rate overtime.

Instead, the government has retained the existing category-based approach, under which only eligible employees receive OTA.

Why the 1991 rate matters

The government’s response also brings an old issue back into focus: the hourly OTA rates for eligible Central Government employees have not been revised since they were prescribed in March 1991.

That means the question is not only about whether gazetted employees should be brought within the overtime allowance framework. It is also about whether the existing rates for employees who are eligible for OTA should be updated.

The government has said these rates have remained unchanged following decisions taken by the Department of Expenditure based on Pay Commission recommendations.

For employees who regularly work beyond their prescribed hours, the gap between an old overtime rate and their present salary structure can make the issue particularly significant.

Does the Code on Wages guarantee double overtime for Central Government employees?

Not automatically.

The Code on Wages provides for overtime at not less than twice the normal rate of wages when its overtime provisions apply.

However, the government’s latest Lok Sabha response makes clear that OTA for eligible Central Government employees continues to be regulated through Pay Commission recommendations and government orders.

Therefore, employees should not interpret Section 14 as an automatic revision of Central Government OTA rates or as a blanket extension of overtime benefits to categories that are currently excluded.

What employees should know

For Central Government employees, three things are important.

First, working beyond regular duty hours does not by itself mean every employee is entitled to OTA. Eligibility depends on the applicable rules and category of employment.

Second, the Code on Wages provides for overtime at not less than twice the normal rate of wages where its overtime provision applies, but this does not automatically replace the existing Central Government OTA framework.

Third, the government has confirmed that the hourly OTA rates prescribed in 1991 have not been revised. The 2018 DoPT order had also discontinued OTA for several categories, retaining it for Operational and Industrial employees governed by statutory provisions.

The demand to extend OTA to gazetted employees therefore remains a separate issue from the general overtime provision under the Code on Wages. Any such extension would require a specific policy or rule change.

For now, the government’s response provides clarity on one important point: the implementation of the new wage code has not, by itself, changed the existing overtime allowance rules for Central Government employees.

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