THE PAYMENT OF WAGES ACT,1936

Payment of Wages Act, 1936

Objectives of the act

• To ensure regularity of the payment
• To ensure payment in legal terms
• Preventing arbitrary deductions
• Restricting employers to impose fines
• Providing remedy to the workers

SCOPE AND APPLICABILITY 

• It applies to the whole of India
• It mainly applies to the workers of industries, factories
• It was also extended to the employees of railways, mining, transport, printing press and other establishments

IMPORTANT DEFINITIONS 

Establishment- means motor transport, air transport, dock, jetty, plantation, construction, building roads, bridges, canals, water, electric supply and so on Wages- all remuneration expressed in terms of money, be payable to a person employed in respect of his employment

RESPONSIBILITY FOR PAYMENT OF WAGES 

• Every employer is responsible for the payment of wages to persons employed by him
• Employer may be called as manager, Managing Director, CEO, Chairman
• In case of contract labor, contractor pays the wages to the labor

FIXATION OF WAGE PERIOD

 The period of wage fixation shall not exceed one month

• Time for wage payment
• Wages must be paid before the expiry of the seventh day after the last wage period in case of factory, industrial establishment workers
• Wages must be paid before the expiry of the tenth day after the last wage period in case of other workers
• For terminated employees wages should be paid before the expiry of second working day
• All wages must be paid on a working day

MODE OF PAYMENT OF WAGES 

• By cash ( coins or currency notes)
• By cheque
• By crediting to the bank account of the employee

AUTHORISED DEDUCTIONS FROM WAGES 

• Withholding increment/promotion based on less efficiency
• Demotion to a lower post
• Suspension
• Fines

FINES 

• If any person fails or willfully neglects to pay the wages of any employed person on or before the date that the authority decides, then he is punishable with an additional fine of up to seven hundred (Rs 700) per day for which such failure or neglect continues.
• An employee can be fined for his acts which are specified by the government
• The fine list must be exhibited in the work place
• The worker should know the reason for fine
• Fine cannot be imposed to a person of age less than 15 years
• Fine cannot be recovered in installments of after the expiry of 6 months
• Fine should be imposed on the day of act
• All fines should be recorded in the register

DEDUCTIONS FOR ABSENCE FROM THE DUTY 

Absence from the duty means ―absence from the place where the employed person is required to work‖

Workers though present in the work place and carrying out strikes are considered as absentees and proportionate salary can be deducted

OTHER AUTHORIZED DEDUCTIONS 

• Damage/loss
• Recovery of advances/loans
• Income tax
• Court orders
• Provident fund
• Cooperative societies/insurance
• House accommodation
• Acceptance of fake currency notes/coins
• Losses due to wrong invoice/documents
• Giving wrong discount/rebate to customers
• Others like savings scheme etc

ILLEGAL DEDUCTIONS FROM WAGES 

• When damage/loss is not directly attributable to a workers neglect
• Deductions for tools and raw materials meant for employment
• For loan recovery of more than 50-75% of wages
• For administration mistake in giving rebates/discounts

MAINTAINANCE OF RECORDS AND REGISTERS 

• Every employer shall maintain a record giving particulars of persons employed by him, work performance, wages paid, deductions made, and other particulars

AUTHORITIES UNDER THE ACT 

• Factory inspector is empowered to examine the records of wages paid to the employees
• Government is empowered to make rules to regulate the procedure of carrying out the act
• Claims by the employees are decided in the court regarding deductions
• Recovery of amount can be done by the court regarding fines

OBLIGATION AND RIGHT OF EMPLOYERS 

• To make wages payment regularly
• Not to make any unauthorized deductions from wages
• To maintain a register of wages payment and deductions of all employees
• To display the abstract of the wages payment act in the workplace
• Deductions for absence, damage/loss
• Appeal to the court for wage disputes

RIGHT OF EMPLOYEES 

• Every worker has right to receive the wages
• Refuse to agree for unauthorized deductions
• Approach the authority for delayed wages

• Penalties for offences
• A fine of Rs 500 for contravention of act or 6 months imprisonment or both
• An employer not paying the wages on a working day
• Does not record all fines
• Refuses to answer any information
• Fails to maintain record
• Illegal deductions from wages
• Any other offence according to the act
• Cognizance (knowledge or awareness) of offence
• No court is to take cognizance of complaint of any matter of the act unless an application has been presented regarding the same and sanctioned