2. INTRODUCTION
The Payment Of Wages Act 1936 was come in to the force
on 23rd April 1936.This Act was passed to regulate the
payment of wages for certain classes of persons employed
in industry. It ensures payment of wages in a particular form
and at regular intervals without unauthorized deductions.
The Act extends to whole of India sec. 1(2). It was extended
to Jammu and Kashmir by the Central Labour Law
(Extension to Jammu and Kashmir) Act 1970.
3. OBJECTIVE OF THE ACT
• To Regulate the payment of wages to certain class of employed
person.
• Regulation completed by the Act is to fold :
1. The date of payment of wages.
2. The deduction from wages whether fine or otherwise.
• To ensure payment of wages to persons who covered by the Act
certain provisions have been made in this Act.
4. EXTENT OF THE ACT
• It extends to the whole of India.
• It shall come into force on such date as the Central Government may by notification in the Official
Gazette appoint.
• It applies in the first instance to the payment of wages to persons employed in any factory to persons
employed (otherwise than in a factory) upon any railway by a railway administration or either directly
or through a sub-contractor by a person fulfilling a contract with a railway administration and to
persons employed in an industrial or other establishment specified in sub-clauses (a) to (g) of clause (ii)
of section 2.
• The State Government may after giving three months’ notice of its intention of so doing by notification
in the Official Gazette extend the provisions of this Act or any of them to the payment of wages to any
class of persons employed in any establishment of class of establishments specified by the Central
Government or a State Government under sub-clause (h) of clause (ii) of section 2 :
Provided that in relation to any such establishment owned by the Central Government no such
notification shall be issued except with the concurrence of that government.
5. • Nothing in this Act shall apply to wages payable in respect of a wage-period which over such wage-
period average one thousand six hundred rupees a month or more.
6. APPLICATION OF THE ACT
According to Sec. 1(4) of the Act, it applies to in the first instance to the payment
of wages to :
1. Person employed in Factory.
2. Person employed upon any railway by a Railway Administration or either
directly or through sub- contractor .
3. Person employed in industrial and other establishment specified in sub –
clauses (a) to (g) of clause (ii) of sec 2
4.The State Govt. may after giving 3 months notice by notification in the Official
Gazette , extends the provision of this Act or any of them to payment of wages
to any class of persons employed .
7. RESPONSIBILITY FOR PAYMENT OF WAGES
a) Every employer shall be Responsible
b) In Factory –
Manager of the Factory is responsible
c) In Industrial or other Establishment
A person responsible to the employer for Supervision and control of the
Industrial or other Establishment.
d) In Railway –
A person nominated by Railway Administration for that particular local area
8. e) In case of Contractor –
A person appointed by contractor who is directly under his
charge
f) In other Cases-
A person appointed by employer
9. TIME OF PAYMENT OF WAGES
A) If the number of persons employed in factory, industrial or other
establishment or in railway -
1. Wages to be Paid before 7th Day-
If person employed less than 1000 persons
2. Wages to be Paid before 10th day –
If person employed more than 1000 persons
3. In Case of Dock, Wharf or Jetty or in Mine-
Before expiry of the second working day from the day on which his employment
is terminated
10. B) Wages in case of Termination of Employment –
1.Before the expiry of the 2nd working day from the day on which his
employment is terminated.
2. In case of closure of the establishment for any reason other than a
weekly or other recognized holiday a wages must be paid before the
expiry of the 2nd day from the day on which his employment is
terminated.
C) Exemption –
If the State Government may given general or special order ,exempt the
person responsible for the payment of wages from the operation of the
above provisions in certain case.
11. D) Wage To be paid on a working Day –
Except under sub– section 2 all payments of wages must be made
on a working day
12. DEDUCTIONS WHICH MAY BE MADE
FROM WAGES
Section 7- sub –section (1)
1.Every payment made by the employed person to the employer or his agent
must for the purpose of this Act be deemed to be a deduction from wages.
2. Penalties mentioned hereunder are not deduction if imposed for good and
sufficient cause –
a)With holding of increment or promotion
b)In case of demotion
c)Suspension
13. Section 7 (2)- Authorized deduction from wages
Deduction made by the employer must be made according to this Act only and this are as
follows:
1 . A) Fine (Section 8) –
-it must be approved by state Govt.
-Rules given in Section 8 of the Act are as follows :
1. Notice Board of fines must be displayed in the work premises
2. Give opportunity to employee to show the cause against the imposing fine
3. Amount of fine must be 3% of his wage
4. Fine should not imposed on any employee who is under 15 year
5. Fine imposed one time only
6.Fine should not recovered in installments
7.Fine should be recovered in 60 days
8.Imposed on the day act or omission made by the employee
9.It credited to common fund and utilize for the benefit of the employees
14. 2. B) Deduction for Absence from Duty (Section 9)
- It must be deducted by employer for the one day or for any period
- It Should not be exceed a sum which bears the same relationship to the wage
payable in respect of the wage period as this period of absence does not to such
wage period
- Employee refuses to work without proper reason when he is present for the work
place must be deemed to be absent from duty
- If 10 or more persons together absent for the duty without notice and without any
reasonable cause
15. 3. C) Deduction for Damage or Loss (Section 10)
- Give opportunity to explain reason or cause for damage or loss
happened
- Deduction amount must not be exceed than value or amount of
damage or loss
- All deductions and realization must be recorded in a register to be
kept by responsible person
16. 4. Deduction for Service Rendered (Section 11)
A) Deduction for house Accommodation [Sec 7. (2) (d)] -
- Employer can be made deduction for the house accommodation provided to
employee
- This facility must be accepted by employee
- Deduction should not exceed an amount equivalent to the value of the house
accommodation provided.
B) Deduction for Amenities and Services [Sec.7 (2) (e)] –
- Employer can be made deduction for the amenities and services provided to
employee
- Deduction should not exceed an amount equivalent to the value of the
amenities and services supplied.
17. 5. Deduction For Recovery of Advances (Section 12)
According to Section 7 (2) (f) –
- Advance paid to employee before employment began , this amount
recovered from first payment of the wages to employee
- Amount of advance given for travelling expenses can not recovered
18. 6. Deduction For Recovery of Loans (Section 12-A)
According to Section 7 (2) (ff) -
Employer can made deduction for recovery of loans with interest made from
any fund constituted for the welfare of labour in accordance with the rules
approved by state Govt.
7. Deduction For Recovery Of House-building Loans (Section 12-A)
According to Section 7 (2) (fff) –
Deduction for recovery of loans granted for house building and other
purpose shall be subject to any rules made by the State Govt. regulating the
extend to which such loans may be granted and the rate of interest payable
thereon
19. 8. Deduction of Income Tax (Section 7(2) (g)
Income tax payable by the employed person can be deducted from wages to him by the
employer and amount is recovered in 12 months employment.
9. Deduction By Order Of Court[ Section 7(2)(h)]
Deduction required to be made by order of the court or other authority competent to
make such order may be made from the wages of employed person.
10. Deduction for Payment To Co-operative Societies From Provident Fund ( Section 7
(2)(i)
- Deduction for payments to co-operative societies of advance from any provident fund
which is recognized by Provident Fund Act 1925 or approved by the State Govt.
- This is subject to the conditions approved by the State Govt.
20. 11. Deduction For Payment To Co-Operative Societies And Insurance Scheme
(Section 13)
A) According to sec. 7 (2)(j) – Deduction for the payment of co-operative societies
- It must be approved by State Govt. or prescribed officer
-Deduction made with written authorization of employed person.
-Deduction made as per condition given by the State Govt.
B) According to sec. 7 (2)(k) – Deduction for the payment of insurance schemes or
E.I.C –
k) Deduction for payment of –
1.any premium on life insurance policy or for other purchases of
securities of Govt. of India or State Govt.
21. 2. Any saving scheme of post office
kk) Deduction For the payment of his contribution to any fund constituted
by employer or registered trade union For the welfare of employed person
or his family or both and it is approved by State Govt. or prescribed officer
kkk) Deduction for payment of the fees payable by him for membership of
registered trade Union.
All above deduction made with the written authorization
of the employed person
22. 12. Deduction for Insurance Premium or Fidelity Guarantee Bond (Section 7(2)(1)
The employer has an authority to made deduction for the payment of insurance
premium or fidelity bond may be effected from wages.
13 . Deduction For Recovery of Losses [Section 7 (2) (m)(n)(o)]
Deduction for recovery of losses sustained by the railway administration made in the
following cases
m) Losses on account of acceptance or counterfeit or base coins mutilated or forged
currency noted
n) Losses on account of the failure of the employed person to invoice to bill ,to collect
or to account for appropriate charges due to fares, freight, demurrage etc. or in case of
sale of food in catering establishment
o) Losses on account of rebate and refund incorrectly granted by the employed person
such losses attributed to his neglect or default.
23. 14. Deduction For Contribution to Prime Minister National Relief Fund etc [section
7 (2)(p)-
With the authorization of employed person the deduction can be effected towards
contribution
24. MAINTENANCE OF REGISTER AND
RECORDS
Employer required to maintain register in the following matter :
a)Details of person employed
b)Nature of work performed by them
c)Wages paid to them
d)Deductions made from their wages
e)Receipts given by them and
f) Such other particulars which may be prescribed
- Register and records must be preserve for 3 years and it must be available at the
time of inspection.
25. Penalty for offences under the Act
• Whoever being responsible for the payment of wages to an employed person contravenes any of the
provisions of any of the following sections namely section 5 except sub-section (4) thereof section 7 section 8
except sub-section (8) thereof , section 9 section 10 except sub-section (2) thereof and section 11 to 13 both
inclusive shall be punishable with fine which shall not be less than two hundred rupees but which may extend
to one thousand rupees.
• Whoever contravenes the provisions of section 4 sub-section (4) of section 5 section 6 sub-section (8) of
section 8 sub-section (2) of section 10 or section 25 shall be punishable with fine which may extend to five
hundred rupees.
• Whoever being required under this Act to maintain any records or registers or to furnish any information or
return –
(a) fails to maintain such register or record; or
(b) willfully refuses or without lawful excuse neglects to furnish such information or return; or
(c) willfully furnishes or causes to be furnished any information or return which he knows to be false; or
26. (d) refuses to answer or willfully gives a false answer to any question necessary for obtaining any information
required to be furnished under this Act shall for each such offence be punishable with fine which shall not be
less than two hundred rupees but which may extend to one thousand rupees.
• Whoever –
(a) willfully obstructs an Inspector in the discharge of his duties under this Act; or
(b) refuse or willfully neglects to afford an Inspector any reasonable facility for making any entry inspection
examination supervision or inquiry authorised by or under this Act in relation to any railway factory or
industrial or other establishment; or
(c) willfully refuses to produce on the demand of an Inspector any register or other document kept in
pursuance of this Act; or
(d) prevents or attempts to prevent or does anything which he has any reason to believe is likely to prevent
any person from appearing before or being examined by an Inspector acting in pursuance of his duties under
this Act; shall be punishable with fine which shall not be less than two hundred rupees but which may extend
to one thousand rupees.
27. • If any person who has been convicted of any office punishable under this Act is again guilty of an
offence involving contravention of the same provision he shall be punishable on a subsequent
conviction with imprisonment for a term which shall not be less than one month but which may
extend to six months and with fine which shall not be less than five hundred rupees but which may
extend to three thousand rupees.
Provided that for the purpose of this sub-section no cognizance shall be taken of any conviction made
more than two years before the date on which the commission of the offence which is being punished
came to the knowledge of the Inspector.
• If any person fails or willfully neglects to pay the wages of any employed person by the date fixed by
the authority in this behalf he shall without prejudice to any other action that may be taken against
him be punishable with an additional fine which may extend to one hundred rupees for each day for
which such failure or neglect continues.
28. FIXING HOURS
(1) Every person responsible for the payment of wages under section 3 shall fix periods (in
this Act referred to as wage-periods) in respect of which such wages shall be payable.
(2) No wage-period shall exceed one month.
