Night Shift Allowance Policy in IT Companies

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The government of India is promoting “Make in India” and the IT companies are following “Wake in India” to support clients across the globe. Right from Gurgaon to Bangalore, you would have seen cabs plying during odd hours to ensure that the employees are able to reach their office as per the designated shift timings. It is important for a company to define a policy for the shift timing depending on the operations. As money is involved so the Night Shift Allowance (NSA) should be defined to avoid conflict. The following points are important to define the policies

The Head HR should take the responsibility of framing the policy to ensure that employees are compensated for the hardship due to working in odd hours in shifts as a part of their assignment. The policy can be named as Night Shift Policy or Shift Allowance Policy.
Ensure that the last review date should be mentioned in the policy and any change to the same should be notified to the entire employee especially the project managers.

So, What is a shift?

Based on the business requirements, an employee may be required to work in shifts. Shift is defined as a 9 hr contiguous time window. The shift is planned for 8 hours of work plus 1 hour of transition.The three standard shifts planned along with their allowances are given below:

These are the common shifts and an approximate amount is given below.

Shift

Timing

Allowance

Shift A (Morning or Early Bird Shift)

6:00 a.m. to 2:00 p.m.

Rs.100

Shift B (Afternoon Shift)

2:00 p.m. to 10:00 p.m.

Rs. 200

Shift C (Night Shift)

10:00 p.m. to 6:00 a.m.

Rs. 350

 

Note:

  • Most of the companies pay only for the night shift.The above amount is indicative. It varies from company to company.
  • Cognizant, India (CTS), the night shift Allowance (NSA) is Rs. 300 only for the night shift. There isn’t any extra amount for morning or noon shift. In some of the projects, the associate can get approx Rs. 500 plus as on call allowance if you are working late in the night. Please check with your project manager for more details. Most of the allowances are based on project budget.
  • In Accenture the night shift allowance is approx. Rs. 350. In some of the projects Employees are reimbursed for one time meal also. For example, the dinner is reimbursed in the night shift. Breakfast is reimbursed in the morning shift.
  • In product companies like EMC, all permanent Employees are paid approx Rs. 250 extra if they work for 4 hours or more apart from the regular hours.
  • In IBM, most of the projects allow Felxi work arrangement, where they give Shift allowance as well as reimbursement of internet charges at home.

 

Shift Roster

The project Manager has to plan for the shift roster. Note that you should plan for Holidays and On call support in advance. Some projects have a policy for on call support over the weekend and on public holidays. The shift roster should be sent to the client and the project team members at the beginning of the month.

You can download a sample shift roster from here

Shift Allowance Payment

In some services companies, shift allowance is paid only for the night shift. While in other companies, Shift allowance is paid only to employees working in Shift A, Shift B and Shift C The employee has to put in 4 hours or more of work during a particular shift, and only then will the employee be eligible for the Shift allowance.

Exclusions
Employees who are Senior Managers and above are not eligible for this allowance.
The Night Shift Allowance Program is not applicable to employees who are required to work beyond normal working hours due to flexi-timings as agreed with their Managers or due to late sitting.

Income Tax Implications

Any taxes arising out of this benefit availed by the employee would have to be borne by the employee. Shift allowance is treated as Salary and taxed at the prevailing income tax rate depending on the tax slab of the employee.

Read More about: Night Shift Process and Policy

 Process for payment

  • The project team member consolidates, validates the details and sends it to BU Head for final approval
  • The Shift allowance details for the month to be updated by the manager and sent to the Business Unit Head
  • Post approval from BU Head, the Final Payout File for the current month and Roster for the following month to be sent by respective HR Business Partner to HR Operations Team. The HR sends the approved excel to the payroll processing team.
  • All such inputs shall be sent to the Human Resource Operations Team by the 10th of every month
  • The Shift allowance for the month during which the work has been completed would be paid in the second payroll cycle following that month. For Example: Final Payout for the month of April, 2016 would be paid out in the payroll cycle of May, 2016, provided all the details have been received by the payroll department by the 10th of May

The above shift allowance and the processes are indicative and applicable to the IT companies in India. It would vary from company to company. For more clarification, you can leave a comment here.

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