Payment of Wages Act, 1936

Payment of Wages Act, 1936 Objective: The Payment of Wages Act, 1936 regulates payment of wages to employees. The act is intended to be a remedy against unauthorized deductions made by employers and/or unjustified delay in payment of wages. The government found it necessary to regulate the payment of wage in industry because there were many abuses, payments denied or delayed, arbitrary deductions, heavy fines, and payment in kind instead of cash. The act provides for the responsibility for payment of wages, fixation of wage period, time and mode of payment of wages, permissible deduction as also casts upon the employer a duty to seek the approval of the government for the acts and permission for which fines may be imposed by him and also sealing of the fines, and also for a machinery to hear and decide complaints regarding the deduction from wages or in delay in payment of wages, penalty for malicious and vexatious claims. A worker can’t contract out of any right conferred upon him under the act. The Act does not apply to persons whose wage is Rs. 24,000/- or more per month. This is because they require more protection. It shall be the responsibility of the employer to make payment of all wages required to be made under this Act in case the contractor or the person designated by the employer fails to make such payment. Fixation of wage-periods. (1) Every person responsible for the payment of wages shall fix periods (in this Act referred to as wage-periods) in respect of which such wages shall be payable. (2) No wage-period shall exceed one month. Time of payment of wages (1) The wages of every person employed be paid (a) when less than one thousand persons are employed, shall be paid before expiry of the seventh day of the following month, (b) when more than one thousand persons are employed, shall be paid before the city of the tenth day of the following month. Note: Where the employment of any person is terminated then before the expiry of second day. Deductions which may be made from wages. 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; deductions for absence from duty; deductions for damage to or loss of goods expressly entrusted to the employed person for custody, or for loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default; deductions for house-accommodation supplied by the employer or by Government or any housing board set up under any law deductions for such amenities and services supplied by the employer as agreed between the employer and the employed person. This does not include the supply of tools and raw materials required for the purposes of employment; deductions for recovery of advances of whatever nature (including advances for travelling allowance or conveyance allowance), and the interest due in respect thereof, or for adjustment of over-payments of wages; deductions for recovery of loans made from any fund constituted for the welfare of labour as agreed between the employer and the employed person deductions for recovery of loans granted for house-building or other purposes as agreed between the employer and the employed person deductions of income-tax deductions required to be made by order of a Court or other authority competent to make such order; deductions for subscriptions to, and for repayment of advances from any provident fund deductions for payments to co-operative societies as agreed between employer and the employed person. deductions, made with the written authorisation of the person employed for payment of any premium on his life insurance policy to the Life Insurance Corporation of India, or for the purchase of securities of the Government of India or of any appropriate Government or for being deposited in any Post Office Savings Bank in furtherance of any savings scheme of any such Government. deductions made, with the written authorisation of the employed person, for the payment of his contribution to any fund constituted by the employer or a trade union registered under the Trade Union Act, 1926, for the welfare of the employed persons or the members of their families, or both, and agreed between employer and employed person deductions made, with the written authorisation of the employed person, for payment of the fees payable by him for the membership of any trade union registered under the Trade Unions Act, 1926 deductions, made with the written authorisation of the employed person, for contribution to the Prime Ministers National Relief Fund or to such other Fund as the Central Government may, by notification in the Official Gazette, specify; The total amount of deductions should nor exceed 75% of wages of the employed person in any wage period if whole or part of the deductions are meant for payments to co-operative societies. In other cases it should not exceed 50%. Fines Fines can be imposed only for acts and omissions the list of which has been approved by the appropriate government. Fines should not exceed 3% of the wages in a month; be recovered within 90 days of the date of the act or omission; be imposed after a proper show cause procedure and cant be imposed on an employed person of less than 15 years of age. All fines and all realisations thereof shall be recorded in a register to be kept by the person responsible for the payment of wages in such form as may be prescribed. Deduction for damage and loss If any employee causes damage or loss to the employer due to his negligence the employer may deduct such damage or loss after giving the employee an opportunity of showing cause. Maintenance of registers and records. Every employer shall maintain such 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 form as may be prescribed. Every register and record required to be maintained under this section shall, for the purposes of this Act, be preserved for a period of three years after the date of the last entry made therein. Contracting out. Any contract or agreement, whether made before or after the commencement of this Act, whereby an employed person relinquishes any right conferred by this Act shall be null and void in so far as it purports to deprive him of such right. Display by notice of abstracts of the Act. The person responsible for the payment of wages to persons employed in a factory or an industrial or other establishment shall cause to be displayed in such factory or industrial or other establishment a notice containing such abstracts of this Act and of the rules made thereunder in English and in the language of the majority of the persons employed in the factory or industrial or other establishment as may be prescribed.