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Payment of wages


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Payment Of Wages Act 1936

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Payment of wages

  1. 1. 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.
  2. 2. 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 the employer. 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.
  3. 3.  The Payment of Wages Act, 1936 was passed to regulate the payment of wages to 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 the whole of India [Sec.1(2)]. In various States the Act has been extended to shops and establishments also.  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.
  4. 4. Wages :-  ‘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 employment. Simply ‘wages’ means all remuneration due to any worker or employee if the terms of contract of DEFINITION OF WAGES
  5. 5. (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 leave period: (c) Any additional remuneration payable under the terms of employment (whether called a bonus or by any other name); (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:
  6. 6. 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 Government. This Act applies to wages payable to an employed person in respect of a wage period if
  7. 7. 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)
  8. 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
  9. 9. (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 wage-period. (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 cases. (iv) Wages to be paid on a working day :- All payment of wages shall be made on a working day.
  10. 10.  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 bank account.  All wages shall be paid in current coins or currency notes or both. Payment of wages in kind is not permitted.
  11. 11.  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;
  12. 12. 7) Deductions for payments to co-operative societies and insurance Schemes Contd
  13. 13. The following deductions shall also be permitted under the Act: (a) deductions of income-tax payable by the employed person. (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 employees
  14. 14. 1) Every employer shall maintain registers and records 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
  15. 15. 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.