education

1. The Payment of Wages Act 1936: SCOPE
AND Payment of Wages (Amendment)
Bill, 2017
Ramandeep Kaur
Assistant Professor(Law),
Centre for Legal Studies,
Gitarattan International Business School

2. • The Payment of Wages Act, 1936 was assent by president on
23rd April,1936 and came into force on 28th March,1937.
• Jammu & Kashmir was added in 1970
• 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. • To ensure payment of wages to persons who covered by
the act certain provisions have been made in this act.
• Meaning of Wages (sec-2 (IV))
• Wages means all remuneration whether by way of salary,
allowances or otherwise.
• Wages including:
– Court settlement allowance
• Overtime
• Holiday wages
• Leave period wages
• Additional remuneration hours
• Termination remuneration
• any additional remuneration payable under the terms of employment
whether called a bonus or any other name.

4. • “wages” does not included bonus or additional
remuneration not as part of terms of employment.
• HRA
• Perks like water, medical or other service excluded
from the calculation of wages by general or special
order of appropriate government.
• Leave travel concession
• Gratuity
• Remuneration expenses (traveling bills etc…)

5. • Time limit for payment of wages
• No wage period shall exceed 1 month (sec-4)
• If the number of person employed in factory, industrial
or other establishment or in railway-(sec-5)
• Wages to be paid before 7 day.
• If person employed less than 1000 persons.
• Wages to be paid before 10 day.
• If person employed more than 1000 persons
• In case of dock, wharf or jetty or in mines Wages to be
paid before expiry of 2nd day from termination for
terminated employee.

6. • Significant amendments
were introduced in the
1936 act through the
development of
The Payment of Wages
(Amendment) Bill,
2017. This bill was
introduced in Lok Sabha
by the Minister of
Labour and
Employment.

7. Significant change which has been
made under the new act
• The central and state
governments can now specify
industrial units and other
establishments to pay wages
either through cheques or by
electronically transferring into the
workers' bank accounts, as per a
new law.
President Pranab Mukherjee gave
assent to the Payment of Wages
(Amendment) Act, 2017.
A Bill in this regard was passed by
Parliament in the just-concluded
first-half of the Budget Session.

8. The Bill was passed in Lok Sabha on February 7 and in Rajya
Sabha, the next day.
The Act enables employers to pay wages to workers through
cheque or by transferring into their bank account without
their written authorisation.

9. The new law has amended the Payment of Wages Act, 1936, which
mandated payment of all wages either in coin or currency notes, or
both.
With the President's approval to the Act, "the Payment of Wages
(Amendment) Ordinance, 2016 is hereby repealed"
As both the Houses of Parliament were not in session and
immediate action was required to be taken to ensure that the
benefits of the proposed legislation reach the employed persons at
the earliest, the President promulgated the Payment of Wages
(Amendment) Ordinance 2016, the bill had stated.

10. • The new Act allows the governments to
specify the industrial or other establishment,
the employer of which shall pay to every
person employed there, the wages only by
cheque or by crediting it in his bank account.

11. Payment to Contractual Labour
through Cheque
• The Payment of Wages Act, 1936 has been amended by
Payment of Wages (Amendment) Act, 2017 (effective from
28.12.2016) to enable the employers to pay wages to their
employees by
• (a) cash or
• (b) cheque or
• (c) crediting to their bank account.
• The amendment in the Act also enables the appropriate
Government to specify the industrial or other
establishment, by notification in the Official Gazette, which
shall pay to every person employed in such industrial or
other establishment, the wages only by cheque or by
crediting in his bank account.

12. Indian government effort to encourage account
ownership produces surprising results
• Women, poor and illiterate adults were more
likely to apply for an account after the
government-led Jan Dhan Yojana (JDY) program
was introduced in India to encourage account
ownership.
• Therefore it has become convenient for both the
employers as well as the employees to transfer
the wages through the bank accounts or through
cheque. By doing this the complaints about less
and untimely payment of the wages by the
employees will be reduced.