In the earlier days, the imposition of fine was a fairly
general practice in factories and railways.
There used to be other deductions from the wages
paid to the workers
Such as for medical treatment, education, interest on
advances of the workers’ own wages, charities, and
religious purposes selected by the employer.
There was no uniformity in the payment of wages.
The Royal Commission on Labour examined the delays
in the payment of wages and the practice of
deductions from the wages of an employed person.
The Government of India introduced a Bill seeking to
regular the delays and deduction in the payment of
wages to industrial and plantation labour.
The Bill was passed in 1936 and the Act came into
force from 28th March, 1937.
1.Part I : deals with the regular payment of wages by
2.Part 2 : specifies the heads under which deduction
can be made from wages.
3.Part 3 : provides a machinery for enforcing specific
claim arising out of delayed payments, deduction
from wages, appeals, etc.
It is a self – contained Act and provides its own
machinery for the disposal of the claims. The Act
contains 26 sections.
The Payment of Wages Act, 1936 was
passed to regulate the payment of wages to
certain classes of persons employed in
It ensures payment of wages in a particular
form and at regular intervals without
The Act extends to the whole of India
In various States the Act has been extended to shops and
The Act does not apply to persons whose wages exceed
Rs. 1,600 per month.
This limit was raised from Rs, 1,000 to Rs, 1.600 by the
payment of Wages (Amendment) Act, 1982.
‘Wages’ means all remuneration
(whether by way of salary, allowances
or otherwise) expressed in terms of
money or capable of being so
expressed which would, if the terms
of employment, express or implied,
were fulfilled, be payable to a person
employed in respect of his
employment or of work done in such
Simply ‘wages’ means all
remuneration due to any worker or
employee if the terms of contract of
DEFINITION OF WAGES
(a) Any remuneration payable under any award or
settlement between the parties or order of a court;
(b) Any remuneration to which the person employed is
entitled in respect of overtime work or holidays or any
(c) Any additional remuneration payable under the terms of
employment (whether called a bonus or by any other
(d) Any sum which by reason of the termination of
employment of the person employed is payable under
any law, contract or instrument which provides for the
The definition of ‘wages’ includes the following:
The Act is applicable to persons employed in any
factory, railway, and to such other establishments
to which the appropriate Government may, by
notification, extend the provisions of the Act after
giving three months’ notice to that effect.
In the case of industrial establishments owned
by the Central Government the notification can be
issued with the concurrence of the Central
This Act applies to wages payable to an
employed person in respect of a wage period if
RULES FOR PAYMENT OF WAGES(SECS. 3 TO 6)
Responsibility for Payment of Wages (Sec.3)
Fixation of Wage-Periods (Sec.4)
Time of Payment of wages(Sec. 5)
Mode of payment of wages (Sec. 8)
Every employer shall be responsible for the payment to
persons employed by him of all wages required to be paid
under the Payment of Wages Act.
But in the case of persons employed (otherwise than by a
contractor) in factories, industrial establishment or upon
railway, the following persons shall also be responsible for
the payment of wages:
(a) In factories, the person named as the manager;
(b) In industrial or other establishment, the person, if any, who
is responsible to the employer for the supervision and
(c) Upon railways (otherwise than in factories), the person
nominated by the railway administration in this behalf for
(1) Every person responsible for the payment of wages
shall fix periods known as “WAGE PERIODS”in respect
of which such wages shall be payable.
(2) No wage period shall exceed one month.
(ii) Wages in case of termination of employment :-
Where the employment of any person is terminated by
or on behalf of the employer, the wages earned by him
shall be paid before the expiry of the 2nd working day from
the day on which his employment is terminated.
(i) Wages to be paid before 7th or 10th day :-
The wages of every person employed upon or in
railway, factory or industrial or other establishment in which
less than 1,000 persons are employed, shall be paid before
the expiry of 7th day of the following wage-period.
In case the number of workers exceeds 1,000, the wages
shall be paid before the expiry of the 10th of the following
(iii) Exemption :-
The State Government may, by general or special
order, exempt the person responsible for the payment of
wages from the operation of the above provisions in certain
(iv) Wages to be paid on a working day :-
All payment of wages shall be made on a working
Section 6 provides that all wages shall be paid in currency
coin or currency notes or in both:
It is provided that the employer may, after obtaining the
written authorization of employed person, pay him the
wages either by cheque or by crediting the wages in his
All wages shall be paid in current coins or currency
notes or both. Payment of wages in kind is not permitted.
The wages of an employed person shall
be paid to him without deductions of any
kind except those authorised by or under the
Payment of Wages Act, 1936.
The deductions from wages of an
employed person may be of the following
kinds only, namely;
7) Deductions for payments to co-operative
societies and insurance Schemes
The following deductions shall also be permitted under
(a) deductions of income-tax payable by the employed
(b) deductions required to be made by order of a Court or
other authority competent to make such order [Sec. 7 (2) (h)]
(c) deductions for contributions to any insurance scheme
framed by the Central Government for the benefit of its
1) Every employer shall maintain registers and
giving such particulars of:
-Persons employed by him
-The work performed by them
- The wages paid to them
- The deductions made from their wages
- The receipts given by them and such other
particulars and in such forms as may be
2) Every register and record required to be
maintained under this section shall,
- For the purpose of this act,
-Be preserved for a period of three years
after the last entry made therein.