Main Provisions of the Payment of Wages Act
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Main Provisions of the Payment of Wages Act
Payment of wages is the most important thing for a worker. Unless he is paid his wages without delay and without any undue deductions, he will feel disturbed and lose interest in the work. It may become dicult for him to survive (live). herefore, it was felt necessary that there should be a legislation (law) to protect the wages earned by a worker.
!eeping this in view, the "overnment enacted the Payment of #ages $ct, %&' to ensure that there was no delay in payment to the workers, nonpayment of wages should be avoided, and the employers should not make deductions from the wages on account of *nes imposed by him.
Object and Scope: $ccording to the preamble of the $ct, the ob+ect of the $ct is to regulate the payment of wages to certain classes of bessons employed in the industry-. he $ct provides that employed persons shall be paid their wages in a particular form and at regular intervals without any unauthorised deductions-.
he $ct safeguards safeguards the wages of employees under certain conditions. conditions. he $ct $ct applies to employees drawing not more than s. %//0 per month. he 1tate "overnment has the power to make the $ct applicable to any class of persons employed in any establishment or class of establishment by giving ' months notice.
2e*nition of 3workers4 is to be taken from the Industrial 5mployment (1tanding 6rders) $ct, %&7. he scope of the $ct has been widened by the $mendment in the $ct called the Payment of #ages ($mendment) $ct, %&89.
Application:
he $ct applies to the whole of India. It came into operation on 98th :arch, %&';. Under the $ct, following categories of workers are covered<
a) Persons employed in any factory=
b) Persons employed (otherwise than in a factory) upon any railways or by a person ful*lling a contract with a railway administration.
Payment of Wages and Deductions from Wages: hese are the two important provisions of the $ct. $ccording to the $ct, every employer shall be primarily responsible for the payment to persons employed by him. >e should pay all wages re?uired to be paid.
he employer should *@ the wage period in respect of his employees. his period should not e@ceed one month.
he employer should also *@ time of payment of wages to his workmen. Aor this purpose certain conditions have been speci*ed under the $ct.
#ages should be paid in current coins or currency notes or in both.
he employer should make only the authorised deductions from the salary of workers working in his factory. >e can make authorised deductions in respect of loan taken by the workers or for recovery of losses.
But total deductions should not e@ceed *fty percent of the wages. In cases where such deductions are made to cooperative societies the deductions should not e@ceed ;C per cent of the wagesD
If a Eourt or other authorities competent to make order for deduction, orders for deduction from salary, it is allowed under the Payment of #ages $ct, %&'.
2eductions towards *ne can be made from the salary of a factory worker only in accordance with the provisions of this $ct.
6ther deductions like deductions for absence from duty, deductions for damage or loss of goods by the worker, deductions for loss of money for which the worker is directly responsible, deductions towards house rent on account of accommodation provided by the factory owner, deductions towards recovery of advances, income ta@, etc. can be deducted from the wages of factory workers only in accordance with the rules framed under this $ct.
he following rules are given in the Payment of #ages $ct<
(%) 5mployers cannot withhold the wages earned by workers nor can they make any unauthorised deductions from the wages.
(9) Payments must be made before the *@ed pay day after the wage period.
(') Aines can be imposed for only those acts of omission which have been approved by the appropriate government. hese must not be more than an amount e?ual to three paise in a rupee of the wage payable.
(7) If the payment of wages is delayed or wrongful deductions are made, the workers or their trade unions can *le a claim.
(C) he payment of overtime in scheduled employment is governed by the :inimum #ages $ct, %&78.
() #ages should be paid according to the rules, as contained in the $ct.
he Payment of #ages ($mendment) $ct, %&; is applicable to the whole of India and applies to persons employed in any factory as de*ned in the Aactories $ct, %&78 and in any railway, receiving wages and salaries which on an average are below s. %,/// a month.
his amount has been raised to s. %,//0 per month through $mendment of the $ct in %&89.
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Payment of Wages Act, 1936 The Payment of Wages Act, 1936 is a central legislation which has been enacted to regulate the payment of wages to workers employed in certain specified industries and to ensure a speedy and effective remedy to them against illegal deductions and/or unjustified delay caused in paying wages to them. It applies to the persons employed in a factory, industrial or other establishment or in a railway, whether directly or indirectly, through a sub-contractor. Further, the ct is applicable to employees drawing wages upto s. !"##/- a month. The $entral %overnment is responsible for enforcement of the ct in railways, mines, oilfields and air transport services, while the &tate %overnments are responsible for it in factories and other industrial establishments. The basic provisions of the ct are as follows'
The person responsible for payment of wages shall fi( the wage period upto which wage payment is to be made. )o wage-period shall e(ceed one month.
ll wages shall be paid in current legal tender, that is, in current coin or currency notes or both. *owever, the employer may, after obtaining written authorisation of workers, pay wages either by che+ue or by crediting the wages in their bank accounts.
ll payment of wages shall be made on a working day. In railways, factories or industrial establishments employing less than !### persons, wages must be paid before the e(piry of the seventh day after the last date of the wage period. In all o ther cases, wages must be paid before the e(piry of the tenth day after the last day of the wage period. *owever, the wages of a worker
whose services have been terminated shall be paid on the ne(t day after such termination.
lthough the wages of an employed person shall be paid to him without deductions of any kind, the ct allows deductions from the wages of an employee on the account of the following'- i fines ii absence from duty iii damage to or loss of goods e(pressly entrusted to the employee iv housing accommodation and amenities provided by the employer v recovery of advances or adjustment of over-payments of wages vi recovery of loans made from any fund constituted for the welfare of labour in accordance with the rules approved by the &tate %overnment, and the interest due in respect thereof vii subscriptions to and for repayment of advances from any provident fundviii income-ta( i( payments to co-operative societies approved by the &tate %overnment or to a scheme of insurance maintained by the Indian ost 0ffice ( deductions made with the written authorisation of the employee for payment of any premium on his life insurance policy or purchase of securities.
The ct prescribes following rules for fines'•
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Fines shall be imposed for approved list of acts and omissions.
notice specifying such list shall be e(hibited in the prescribed manner on the premises in which the employment is carried on or at the prescribed places in case a person is employed in railways.
)o fine shall be imposed on any employed person until he has been given an opportunity of showing cause against the fine, or other-wise, than in accordance with such procedure as may be prescribed for the imposition of fines.
The total amount of fine which may be imposed in any one wage period on any employed person shall not e(ceed an amount e+ual to three per cent of the wages payable to him in respect of that wage-period.
)o fine shall be imposed on any employed pe rson who is under the age of fifteen years.
)o fine imposed on any employed person shall be recovered from him by installments or after the e(piry of si(ty days from the day on which it was imposed.
ll fines and all realisations thereof shall be recorded in a register to be kept by the person responsible for the payment of wages.
*ence, the main object of the ct is to eliminate all malpractices by laying down the time and mode of payment of wages as well as securing that the workers are paid their wages at regular intervals, without any unauthorised deductions. The ct was amended by the Payment of Wages (Amendment) Act, 2005 s. in order to enlarge its scope and provide for more effective enforcement. The main amended provision is the enhancement of wage ceiling from !"##/-per month to s. "1##/-per month for the applicability of the ct as well as empowering the %overnment to enhance the ceiling by notification in future.
THE PAYMENT OF WAGES ACT, 1936 NT!O"#CTON With the growth of industries in India, problems relating to payment of wages to persons employed in industry took an ugly turn. The Industrial units were not making payment of wages to their workers at regular intervals and wages were not uniform. The industrial workers were forced to raise their heads against their exploitation. The Payment of Wages Bill, !"# 1, based upon the same principle as the earlier Bill of !"" but thoroughly revised was introduced in the $egislative %ssembly on # th &ebruary, !"#. The Bill was referred to the 'elect (ommittee. The 'elect (ommittee presented its report ), with the amended Payment of Wages Bill, !"# to the $egislative %ssembly on ) nd 'eptember, !"#. STATEMENT OF O$%ECTS AN" !EASONS In !)* the +overnment of India addressed $ocal +overnments with a view to ascertain the position with regard to the delays which occurred in the payment of wages to persons employed in industry, and the practice of imposing fines on them. The investigations revealed the existence of abuses in both directions and the material collected was placed before the oyal (ommission on $abour which was appointed in !)!. The (ommission collected further evidence on the sub-ect and the results of their examination with their recommendations will be found on pages )*)) and )"*)/ of their eport. The +overnment of India reexamined the sub-ect in the light of the (ommission0s eport and in &ebruary !"" a Bill embodying the conclusions then reached was introduced and circulated for the purpose of eliciting opinion. % motion for the reference of the Bill to a 'elect (ommittee was tabled during the 1elhi session of !"" "/, but was not reached, and the Bill lapsed, The present Bill is based upon the same principles as the original but has been revised throughout in the light of the criticisms received when the original Bill was circulated.
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The objectives of the act are three fold:
to pay the wages to the employees
to pay the wages at proper time (ie. without any delay)
to prevent unauthorized deductions Any orders, agreements etc that override the Payment of ages Act are invalid to the e!tent of their conflict with the Act. "owever, anything above the act for the benefit of the wor# men are welcome. $rders may supplement but should not supplant them. "ouse rent is not included in wages but includes overtimne wor# or holidays or leave period.
lmtroduction In the previous unit, we have discussed ......................................... In this unit an attempt is being taken to discuss the Payment of Wages %ct. !"* and its ob-ects, application and other important aspects. The paym ent of wages %ct. !"* has recently been amended in )22# by the Payment of wages 3%mendment4 %ct )22#. The way structure of an Industrial enterprise is built on the premise that each -ob has its own price depending on the sk ill and training. 5oreover, it depends on commensurate responsibility, which is determined by systematic 6ob evaluation method or by 0going rate0 in the particular market area. By the payment of wages %ct !"*, the payment system, rate, deduction, etc. important aspects of wages of certain classes of employed persons are regulated. Through this unit, students can understand all about the important legal matters of the Payment of wages %ct. !"*.
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