Manufacturing & factories

Factory payroll built for the Factories Act

3-shift roster (A/B/C + General), DA linked to AICPI, ESI mandatory for low-wage workers (0.75%/3.25%), statutory 2× overtime per §59, production allowance, canteen subsidy when ≥ 250 workers. Used by SME workshops through 1000-worker plants.

Real problems · real fixes

What manufacturing & factories actually need from payroll

Each row is a pain point we've heard from operators in this vertical — and the specific FastLegal Payroll feature that addresses it.

Problem3 shifts × 50 workers = 150 names a supervisor types into a roster grid every Sunday.

FastLegal solvesBulk-assign UI: pick a shift, pick a date range, pick a department, assign 50 workers in one click. Pattern repeats for the next month with a single 'duplicate' button.

ProblemESI applies to workers earning ≤ ₹21k gross but the threshold is easy to miss when bonus crosses someone over.

FastLegal solvesEngine re-evaluates ESI eligibility every month based on actual gross. Flags every employee crossing or falling under the threshold so HR can issue/cancel ESI cards.

ProblemFactories Act says OT is at 2× and capped at 60h/week including normal hours — manual tracking is brittle.

FastLegal solvesBuilt-in Statutory Factory OT policy: weekday 2×, weekend 2×, holiday 2.5×, cap at 12h/week additional. Engine applies the cap automatically when the threshold is breached.

ProblemProduction bonus tied to monthly output is calculated by the supervisor and paid via cash voucher.

FastLegal solvesProduction Incentive is a built-in bonus type (₹5,000 default), payable monthly. Recorded on the payslip, taxable, audit-logged with the originating supervisor.

ProblemCanteen subsidy for ≥ 250-worker plants needs to be on the books but accountants treat it as expense.

FastLegal solvesCanteen Subsidy is a built-in non-taxable reimbursement (₹1,500/mo default). Per Section 17(2)(iiia) of the ITA, food and non-alcoholic beverages provided by the employer in remote-area workplaces are exempt.

ProblemOperator / Helper / Foreman / Supervisor hierarchy is the floor's reality; HRMS doesn't model it.

FastLegal solvesIndustry profile pre-loads 12 designations split Supervisory (Plant Manager, Production Manager, Shift Supervisor, Foreman) vs Workmen (Operator, Machine Operator, Helper, QA Inspector, Maintenance, Electrician, Storekeeper, Security Guard).

Built for the workflow

Three things that change when you pick manufacturing & factories at signup

Shift roster

A/B/C + General — the canonical factory pattern

Indian factories almost always run 3 shifts (Morning A 06-14, Evening B 14-22, Night C 22-06) plus a General shift for office/admin staff. FastLegal pre-loads all four; bulk-assign moves entire departments onto shifts in one action.

  • A shift (Morning) · 06:00-14:00
  • B shift (Evening) · 14:00-22:00
  • C shift (Night) · 22:00-06:00 with ₹50/hr differential
  • General · 09:00-17:30 for office staff
Statutory

ESI + PF + Factories Act OT, computed every cycle

Three statutory levers a manufacturing payroll has to get right every month. FastLegal computes ESI eligibility, PF (capped at ₹15k basic), and 2× OT per §59 of the Factories Act automatically.

  • ESI · 0.75% employee + 3.25% employer · auto-flagged
  • PF · 12% employee + 12% employer · capped at ₹15k basic
  • Factories Act OT · 2× weekday, 2.5× holiday, 12h/week cap
  • Form 24Q quarterly + PF ECR monthly
Compensation

DA + production allowance + canteen subsidy

Three components every factory pays. FastLegal models them as standard salary components so they appear on payslips with the right tax treatment and feed the right statutory files.

  • DA · 30% of basic default · AICPI-linked, taxable
  • Production Allowance · ₹2,000/mo · taxable
  • Canteen Subsidy · ₹1,500/mo · §17(2)(iiia) exempt
  • Production Incentive Bonus · monthly · output-linked
Compliance baked in

The statutes that govern manufacturing & factories

FastLegal Payroll references each of these frameworks correctly in its payslips, PDFs and statutory exports.

Factories Act, 1948

§59 overtime at 2× ordinary rate; §46 canteen mandatory ≥ 250 workers; 60h/week cap.

ESI Act, 1948

Mandatory ≥ 10 workers earning ≤ ₹21k gross. 0.75% employee + 3.25% employer.

EPF & MP Act, 1952

Mandatory ≥ 20 workers. 12%/12% on basic capped at ₹15,000.

Payment of Bonus Act, 1965

Statutory bonus 8.33% minimum, paid annually. Capped on ₹21k Basic + DA.

Contract Labour Act, 1970

Contract workers handled separately via the Contractor module.

FAQ

Common questions from manufacturing & factories

Does FastLegal handle 3-shift factory rosters at scale?

Yes. Pick Manufacturing at signup and the workspace gets A/B/C night-differential shifts + a General shift pre-loaded. The roster page is a week-grid; bulk-assign moves entire departments (Production, QA, Maintenance) onto shifts for a date range in one click. We've tested with 500-worker rosters; performance is fine.

How are night-shift differentials paid for C-shift workers?

The C shift template carries differentialPaisaPerHour = 5000 (₹50/hr) + nightAllowancePaisa = 50000 (₹500 flat per shift). When payroll runs, the engine reads each worker's ShiftAssignment in the period and adds two line items to the payslip: SHIFT_DIFF (hours × rate) and NIGHT_ALLOW (flat × shift count).

Is ESI compulsory for our factory?

ESI is mandatory for any factory employing 10+ workers where any worker earns ≤ ₹21,000 monthly gross. Almost every Indian factory crosses both thresholds because helpers, operators, and security staff fall under the wage ceiling even when supervisors don't. FastLegal flags every employee crossing/falling under each month.

How is overtime computed under the Factories Act?

Section 59 of the Factories Act requires wages at twice the ordinary rate for work beyond 9 hours/day or 48 hours/week. The cap is 60 hours/week including normal hours = 12 hours/week of OT. FastLegal's Statutory Factory OT policy applies these defaults; the engine truncates OT entries past the weekly cap.

Do we need a canteen subsidy line item?

Section 46 of the Factories Act mandates a canteen for any factory with ≥ 250 workers. The subsidy paid to workers using the canteen is exempt from tax under §17(2)(iiia) ITA up to ₹50/meal. FastLegal pre-loads Canteen Subsidy as a non-taxable reimbursement component (₹1,500/mo default).

Free workspace · sign up in 60 seconds

Run your next payroll on FastLegal Payroll.

Create a workspace, bootstrap the standard Indian defaults (leave types, salary structure, holidays for two years), add your first employee, and run May payroll — all before your evening chai.

  • Workspace auto-bootstrapped on signup (leave types, salary structure, holidays)
  • PF / ESI / PT / TDS computed every run — every cycle
  • Employee + contractor portals included, no extra tier
  • No credit card needed