2. OBJECTIVE OF THE ACT
To regulate the payment of wages to certain
classes of employed persons. Two fold:-
• First the date of payment of wages and
• Secondly the deductions from wages whether
as fine or otherwise.
3. APPLICABILITY OF THE ACT
The Payment of Wages Act ,1936 extends to whole
of India
Persons employed in:-
Any factory (a saw mill, ginning factory, godowns,
yards etc as defined in Factories Act, 1948).
• By railway administration or , either directly or
through a sub-contractor .
• In an industrial or other establishments
• Acts applies to employed persons drawing average
wages not exceeding Rs.10,000/- per month
4. WAGE
Wage includes any remuneration:-
• Payable under any award or settlement between the
parties or order of a Court;
• Over time work or holiday or any leave period
• Any additional remuneration under the terms of
employment.
• Wage does not includes any bonus, pension fund or
provident fund, travelling allowance and any gratuity.
5. WAGES TO BE PAID
IN CURRENT COINS
OR CURRENCY NOTES
a) All wages shall be paid in current coins or currency
notes or in both.
b) After obtaining the authorization, either by Cheque
or by crediting the wages in employees banks Account
{Section 6}
6. Responsibility for payment of wages [sec 3]
• Every employer shall be responsible for the payment to
persons employed by him of wages required to be paid
under this Act: Provided that in case of persons
employed (otherwise than by a contractor)
• In factories ,if a person has been named as the manager
of the factory under [sec(7)] of factory act
• in industrial or other establishments , if there is a
person responsible to the employer for the supervision
and control of the industrial or the establishments
7. • c) Upon railways (otherwise than in factories ), if the
railway administration has nominated a person in this
behalf for the local area concerned;
• The person so named , the person responsible to the
employer or the nominated shall be also responsible
for such payment
8. TIME OF PAYMENT OF
WAGES
• The wages of every person employed is paid.
• When less than 1000 persons are employed shall be
paid before the expiry of the 7th day of the
following month.
• When more than 1000 workers, before the expiry of
the 10th day of the following month. (Section 5).
• Terminated employee is entitled to receive the wage
earned by him before the expiry of the 2nd working
day from the day on which his service has been
terminated ( Section 5(2) ).
9. Authorized Deductions from Wages
• Deduction for FINES
• Deduction for ABSENCE FROM DUTY
• Deduction for DAMAGE/LOSS
• Deduction for HOUSE ACCOMODATION
• Deduction for AMMENITIES + SERVICES
• Deduction for RECOVERY OF ADVANCES
• Deduction for RECOVERY LOANS MADE FOR THE
WELFARE OF LABOUR
• Deduction for RECOVERY LOANS GRANTED FOR
HOUSE BUILDING
• Deduction for PAYMENT TO CO-OPERATIVE
SOCITIES AND INSURABLE SERVICES
10. • Deduction Of INCOME TAX
• Deduction made UNDER ORDERS OF COURT
• Deduction for CONTRIBUTION TO PROVIDENT FUND
• Deduction for CONSTITUTION OF A WELFARE FUND
FOR EMPLOYED PERSON + FAMILY MEMBERS
• Deduction in respect of FEES PAYABE FOR
MEMBERSHIP TO TRADE UNION
• Deduction for PAYMENT OF INSURANCE PREMIA ON
FIDELITY GUARANTEE BONDS
• Deduction for RECOVERY OF LOSSES SUSTAINED BY
RAILWAY ADMINISTRATION
11. AUTHORITIES
• Under Section 14 of this Act the appointment of
Inspector is done.
• Act provides the appointment of person to be
authority to hear decide any specified area claim
arising out of deduction from wages or delay in
payment wages under section 15.
• There are three distinct categories of person
prescribe as authorities:
A presiding officer of labor court.
Any commissioner for workmen’s compensation.
Other office with experience as judge of civil
court or a stipendiary.
12.
13. CLAIM AND APPEAL
• Claims arising out of deduction & Delay of wages and
penalty for malicious claims will be heard and decided
by the authority appointed by government.
• The authority under the act can only adjudicate upon
the claim regarding the deduction & Delay in payment
wages.
14. • The appeal lies against the decision of the authority
to a court of small causes in a metropolitan town and
before the District Court within the period of 1
month.
• The employer can appeal provided the total amount
deducted exceeds Rs 300. The authority have all
the power of a civil court under the Civil Procedure
Code ( Sec 17, 17A & 18 )
15.
16. PENALTY FOR OFFENCES UNDER THIS ACT
PENALTY
• Delay in payment of wages
• Un reasonable deductions
• Excess deduction for absence of duty
• Excess deduction for damage or loss to
employer
• Excess deduction for house-
accommodation amenity or service
17. Punishable with fine which shall not be less than 1000/- rupees but
which may extend to 7500/- rupees.
• If Wage period exceed one month.
• Failure in payments of wages on a working day.
• Wages not paid in form of current coin or currency notes
or in both.
• Failure to maintain record for collected fines from
employee.
• Improper usage of fine collected from employees.
• Failure of employee to display notice containing such
abstracts of this Act and of the rules made.
18. Punishable with fine which may extend 3000/- rupees
• Whoever obstructs an Inspector in the discharge of
his duties under this Act
• Whoever willfully refuses to produce on the demand of
an Inspector any register or other document.
• Whoever refuses or willfully neglects to afford an
Inspector any reasonable facility for making any entry,
inspection, examination, supervision, or inquiry
authorized by or under this Act
19. Punishable with fine which shall not be less than 1000/- rupees but which may
extend to 7500/- rupees
• Whoever repeats the same offence committed before.
• Imprisonment for a term which shall not be less than
one month but which may extend to 6 months and fine
which shall not be less than 3750/- rupees but which
may extend 20500/-rupees.
20. Payment of undisbursed wages in case of death of employed person. [Sec 25A]
• Paid by the employer to the person nominated by the
employee.
• Wage deposited by the employer with the prescribed
authority, the employer shall be discharged of his
liability to pay those wages.
• Where no such nomination has been made or where for
any reasons such amounts cannot be paid to the person so
nominated, be deposited with the prescribed authority
who shall deal with the amounts so deposited in such
manner as may be prescribed.
21.
22. OBLIGATIONS
• To fix wage period not exceeding one month.
• To pay wages in cash or by cheque after taking written
authorization of the employed person
• To pay wages on any working day
• To make deductions permissible only under section 7
from wages of the employed person
• To ensure the deductions do not exceed 75% where
payment to a cooperative society has to be made, in any
other cases, deductions do not exceed 50%
23. • Not to impose fines exceeding 3% of wages of the
employees
• To recover fines within 60 days of the date of
offence.
• To display abstract of the Act and the Rules in
English and in language understood by the majority of
workmen.
• To maintain:
a) Register of fines
b) Register of wages
c) Register of deductions for damage or loss
d) Register of advances
