7th Pay Commission overtime allowance: What you really must know now

The 7th Pay Commission recommendations in the past attracted mixed reactions from the central government employees. Though the Pay panel recommended upward revision of salaries, it also recommended doing away with some of the allowance contents in the salary structure. The 7th Pay Commission report had recommended abolishing  overtime allowances to the employees. The Pay Commission, however, excluded operational staff and industrial employees governed by statutory provisions from the list. 

The government reviewed the 7th Pay Commission's recommendations. The government was considering the Pay Commission recommendation of abolishing the overtime allowance, as the Railways and Defence ministries expenditure under this head more than doubled in seven years ending 2012-13, The Hindu reported earlier. The overtime payment amount increased from Rs 797 crore to Rs 1,629 crore in the period, it said. 

The Pay Commission study found that Ministry of Railways and Ministry of Defence civilian employees' overtime allowance accounts for over 90 percent of all overtime paid by the Centre. The report said that the Ministry of Defence has achieved some success in controlling allowance payments. However, Railways Ministry's allowance payment is still rising. 

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The Ministry of Defence's allowance payment decreased to 6.54 percent in 2012-13 from nearly 8 per cent in 2006-07, it said. However, Railway Ministry's allowance payment increased to 2.58 percent in 2012-13 from 2.09 percent in 2006-07.

Railway employees overtime payments are rising faster. These employees overtime payments compounded annual growth rate is 17.2 percent. If the government continues paying overtime allowance, the expenditure will go up manifold.