Common use of Direct Labour Clause in Contracts

Direct Labour. The cost of employees engaged in Production activities that are directly identifiable with Product costs. This shall exclude supervision, which is included in indirect labour, and Production support activities such as inspection, plant and equipment maintenance labour, and material handling personnel. Direct labour cost includes: · Base pay, overtime, vacation and holidays, illness, personal time with pay and shift differential. · Cost of employee fringe benefits such as health and life insurance, payroll taxes, welfare, pension and profit sharing.

Direct Labour. The cost of employees engaged in Production production activities that are directly identifiable with Licensed Product costs. This shall exclude supervision, which is included in indirect labour, and Production production support activities such as inspection, plant and equipment maintenance labour, and material handling personnel. Direct labour cost includes: · • Base pay, overtime, vacation and holidays, illness, personal time with pay and shift differential. · • Cost of employee fringe benefits such as health and life insurance, payroll taxes, welfare, pension and profit sharing.