Payment of Wages Act, 1936 - India Introduction wages responsibility for payment of wages fixation of wages time of payment of wages deductions fines claims Appeal penalty references

1. PAYMENT OF WAGES ACT,
1936
Prepared by
Joydeep Singh
191103

2. INTRODUCTION
Act came into force on 23rd April 1936
It regulates payment of wages to employees (direct and indirect).
The act is intended to be a remedy against unauthorized deductions
made by employer and/or unjustified delay in payment of wages
Act covers employees receiving wages up to INR 24,000 per month
w.e.f August 29, 2017.

3. WAGES
Defined under sec. 2(6) - “Wages” means all remuneration (whether by way
of salary, allowances or otherwise) if the terms of employment were fulfilled,
be payable to a person employed in respect of his employment or of work
done in such employment.
(a)any amount payable under any award or settlement on/or by order of a
Court
(b)any remuneration for overtime work or holidays or any leave period
(c) any additional amount 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 with or without
deductions but does not provide for the time within which the payment is
to be made
(e)any sum to which the person is entitled under any scheme framed under
any law for the time being in force

4. WAGES
But does not include –
a) any bonus (whether under a scheme of profit sharing or otherwise) which
does not form part of the remuneration payable under the terms of
employment
b) the value of any house-accommodation, or of the supply of light, water,
medical attendance or other amenity
c) any contribution paid by the employer to any pension or PF, and the
interest which may have accrued thereon
d) any travelling allowance or the value of any travelling concession
e) any sum paid to the employed person for special expenses due to
employment
f) any gratuity payable on the termination of employment in cases other
than those specified in sub-clause (d)]

5. 3. RESPONSIBILITY FOR PAYMENT
OF WAGES
Every employer shall be responsible for the payment of all wages
a) In factories, the person who has been named as the manager,
under factories act
b) In industrial or other establishments, if there is a person
responsible to the employer for the supervision and control of the
industrial or other establishments
c) For railways person nominated by railway administration
d) In the case of contractor, a person designated by contractor who is
directly under his charge
e) any other case, a person designated by the employer, the person
so nominated or designated shall be responsible for such payment.

6. 4. FIXATION OF WAGE-PERIODS
Every person responsible for the payment of wages under Section 3
shall fix periods and No wage-period shall exceed one month.

7. 5. TIME OF PAYMENT OF WAGES
A) If no. of persons employed in factory, industrial or other
establishment or in railway
Wages to be Paid before 7th Day- If person employed less than
1000 persons
Wages to be Paid before 10th day – If person employed more than
1000 persons
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
terminate
B) Wages in case of Termination of Employment
Before the expiry of the 2nd working day from the day on which his
employment is terminated.
In case of closure of the establishment for any reason other than a

8. 5. TIME OF PAYMENT OF WAGES
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.
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

9. 6. WAGES TO BE PAID IN CURRENT
COIN OR CURRENCY NOTES
All wages shall be paid in current coin or currency notes or in both
After writing authorization of employed person pay him wages either
by cheque or by crediting the wage in his bank account

10. DEDUCTIONS
Employer is allowed to effect only authorized deductions, as specified
in the Act.
This include fines (Section 8)
Absence from duty (Section 9)
Damages or loss (Section 10)
Deduction for services (amenities ) given to employer (Section 11)
Recovery of advances and loans (Section 12, 13)
Payment to cooperative society and insurance (Section 13).

11. 7. DEDUCTIONS WHICH MAY BE
MADE FROM WAGES
1. The wages of an employed person shall be paid to him without
deduction of any kind except those authorized by or under this Act
2. Deductions from the wages of an employed person shall be made
only in accordance with the provisions of this Act, and may be of
the following kinds only, namely-
 fines
 deduction for absence from duty
 deductions for damage to or loss of goods
 deductions for house-accommodation supplied by the employer or by
Government

12. 7. DEDUCTIONS WHICH MAY BE
MADE FROM WAGES
 deductions for such amenities and services supplied by the employer
 deductions for recovery of advances of whatever nature (wages, conveyance
allowance etc.)
 deductions of income-tax payable by the employed person
 deductions required to be made by order of a Court or other authority
 deductions for subscriptions to, and for payment of advances from any
provident fund, LIC, Trade union memberships etc.

13. 8. FINES
1. No fine shall be imposed on any employed person save in respect
of such acts and omissions without approval of appropriate
authority
2. A notice specifying such acts and omissions shall be exhibited in
the prescribed manner on the premises in which the employment
is carried on
3. No fine shall be imposed on any employed person until he has
been given an opportunity of showing cause against the fine
4. The total amount of fine which may be imposed in any one wage-
period shall not exceed an amount equal to 3% of the wages
payable
5. No fine shall be imposed on any employed person who is under the

14. 8. FINES
6. No fine imposed on any employed person shall be recovered from
him by instalments or after the expiry of 90 days from the day on
which it was imposed.
7. Every fine shall be deemed to have been imposed on the day of the
act or omission in respect of which it was imposed.
8. All fines and all realizations thereof shall be recorded in a register
to be kept by the person responsible for the payment of wages

15. 9. DEDUCTIONS FOR ABSENCE
FROM DUTY
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

16. 10. DEDUCTIONS FOR DAMAGE OR
LOSS
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

17. 11. DEDUCTIONS FOR SERVICES
RENDERED
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.
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

18. 12. DEDUCTIONS FOR RECOVERY
OF ADVANCES
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

19. 12. DEDUCTIONS FOR RECOVERY
OF LOANS
Employer can made deduction for recovery of loans with interest
made from any fund constituted for the welfare of labor in
accordance with the rules approved by state Govt.
13. Deductions for payments to co-operative societies and insurance
schemes
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

20. 15. CLAIMS ARISING OUT OF
DEDUCTIONS
Claims arising out of deductions from wages or delay in payment of
wages and penalty for malicious or vexatious claims
The appropriate Government may appoint
(a) any Commissioner for Workmen's Compensation
(b) any officer of the Central Government exercising functions as,—
(i) Regional Labour Commissioner
(ii) Assistant Labour Commissioner with at least two years‟ experience

21. 15. CLAIMS ARISING OUT OF
DEDUCTIONS
(c) any officer of the State Government not below the rank of Assistant
Labour Commissioner with at least two years experience
(d) a presiding officer of any Labor Court or Industrial Tribunal or under any
corresponding law relating to the investigation and settlement of industrial
disputes in force in the State
(e) any other officer with experience as a Judge of a Civil Court or a Judicial
Magistrate
person himself, or any legal practitioner or any official of a registered trade
union authorized in writing to act on his behalf, or any Inspector under this
Act may apply to such authority for a direction
application shall be presented within 12 months from the date on which the
deduction from the wages was made

22. 17. APPEAL
An appeal against an order dismissing either wholly or in part an
application made may be preferred within thirty days of the date on
which was made, before the Court of Small Causes and elsewhere
before the District Court
 if the total sum directed to be paid by way of wages and compensation exceeds
three hundred rupees
 if the total amount of wages claimed to have been withheld from the employed
person exceeds twenty-rupees or from the unpaid group to which the employed
person belongs or belonged exceeds fifty rupees
 imposing on the employer or the other person a financial liability exceeding one
thousand rupees

23. 20. PENALTY FOR OFFENCES
UNDER THE ACT
Violating the provisions of the act – fine Rs 1500 – Rs 7500
Not nominating or designating a person for wages - fine which may
extend to Rs 3000.
Not maintaining any records or registers or not furnishing any
information – Fine Rs 1500 – Rs 7500
If any person who has been convicted under this Act is again guilty -
imprisonment minimum 1 month up to 6 months and fine Rs 3750 –
Rs 22500 or both
If any person fails or willfully neglects to pay the wages - additional
fine up to 750 for each day for which such failure or neglect
continues.

24. REFERENCES
https://clc.gov.in/clc/acts-rules/payment-wages-0
https://blog.ipleaders.in/payment-wages/
https://labour.gov.in/sites/default/files/ThePaymentofWagesAct193
6_0.pdf

25. Thank you