Payment of wages act

1. Payment Of Wages Act
By
ManishaVaghela
1

2. Intheearlierdays,theimpositionoffinewas
afairlygeneralpracticeinperennialfactoriesand
railways.Thereusedtobeotherdeductionsfromthe
wagespaidtotheworkers,suchasformedical
treatment,education,interestonadvancesofthe
workers’ownwages,charities,andreligiouspurposes
selectedbytheemployer.Animportantfeaturewhich
addedtotheembarrassmentoftheworkersat
variousplaceswaspaid.Therewasnouniformityin
thepaymentofwages.Longcomparativelythelonger
periodinrespectofwhichwageswereintervals
betweenwagepaymentsinvariabilityaddedtothein
convenience of the
workers.
Evolution of concept of wages in India.
BY:MANISHA VAGHELA [email protected]

3. TheRoyalCommissiononLabourinitsreport
(1931)recommended, among otherthings,that
legislationondeductionfromwagesandfineswas
necessaryanddesirable.Thecommissionexaminedthe
delaysinthepaymentofwagesandthepracticeof
deductionsfromthewagesofanemployedperson.In
thelightofitsrecommendations,theGovernmentof
IndiaintroducedaBillseekingtoregularthedelays
anddeductioninthepaymentofwagestoindustrial
andplantationlabour.TheBillwaspassedin1936and
theActcameintoforcefrom28
th
March,1937.In
exerciseofthepowersconferredundertheAct,the
MaharashtraGovernmentframedrulesknownasthe
MaharashtraPaymentofWagesRules,1936.
BY:MANISHA VAGHELA [email protected]

4. The Act is in three parts.
1.Part I deals with the regular and payment of wages
by the employer.
2.Part 2 specifies the heads under which deduction
can be made from wages.
3.Part 3 provides a machinery for enforcing specific
claim arising out of delayed payments, deduction
from wages, appeals, etc. It is a self –contained Act
and provides its own machinery for the disposal of
the claims. The Act contains 26 sections.
BY:MANISHA VAGHELA [email protected]

5. INTRODUCTION
ThePaymentofWagesAct,1936waspassedto
regulatethepaymentofwagestocertainclassesof
personsemployedinindustry.Itensurespaymentof
wagesinaparticularformandatregularintervals
withoutunauthorizeddeductions.TheActextendsto
thewholeofIndia[Sec.1(2)].Itwasextendedto
JammuandKashmirbytheCentralLabourLaws
(ExtensiontoJammuandKashmir)Act,1970.
BY:MANISHA VAGHELA [email protected]

6. Thepaymentofwagestopersonsemployedinany
factory,topersonsemployed(otherwisethanina
factory)uponanyrailwaybyarailwayadministration
andtoanindustrialorotherestablishment.Invarious
StatestheActhasbeenextendedtoshopsand
establishmentsalso.TheActdoesnotapplyto
personswhosewagesexceedRs.1,600permonth.
ThislimitwasraisedfromRs,1,000toRs,1.600by
thepaymentofWages(Amendment)Act,1982.
Itisprovidedthat,inrelationtothecentral
governmentownedestablishment,anynotification
willbeissuedonlyaftertheconcurrenceofcentral
government.
BY:MANISHA VAGHELA [email protected]

7. DEFINITION OF WAGES
Wages:-
‘Wages’meansallremuneration(whetherbywayof
salary,allowancesorotherwise)expressedinterms
ofmoneyorcapableofbeingsoexpressedwhich
would,ifthetermsofemployment,expressorimplied,
werefulfilled,bepayabletoapersonemployedin
respectofhisemploymentorofworkdoneinsuch
employment.Simplystated‘wages’meansall
remunerationduetoanyworkeroremployeeifthe
termsofcontractofemploymentarefulfilled.The
definitionof‘wages’includesthefollowing:
BY:MANISHA VAGHELA [email protected]

8. (a)Anyremunerationpayableunderanyawardor
settlementbetweenthepartiesororderofa
court;
(b)Anyremunerationtowhichtheperson
employedisentitledinrespectofovertime
workorholidaysoranyleaveperiod:
(c)Anyadditionalremunerationpayableunder
thetermsofemployment(whethercalleda
bonusorbyanyothername);
(d)Anysumwhichbyreasonofthetermination
ofemploymentofthepersonemployedis
payableunderanylaw,contractorinstrument
whichprovidesfor
BY:MANISHA VAGHELA [email protected]

9. thepaymentofsuchsum,whetherwithorwithout
deductions,butdoesnotprovideforthetimewithinwhich
thepaymentistobemade;
(e)Anysumtowhichthepersonemployedisentitledunder
anyschemeframedunderanylawforthetimebeingin
force.
Theexpression‘wages’doesnotinclude:
(1)Anybonus(whetherunderaschemeofprofit-sharingor
otherwise)whichdoesnotformpartoftheremuneration
payableunderthetermsofemploymentorwhichisnot
payableunderanyawardorsettlementbetweenthe
partiesororderofaCourt;
BY:MANISHA VAGHELA [email protected]

10. (2)Thevalueofanyhouseaccommodation,orofthe
supplyoflight,water,medicalattendanceorother
amenityorofanyserviceexcludedfromthecomputation
ofwagesbyageneralorspecialorderoftheState
Government:
(3)Anycontributionpaidbytheemployertoanypensionor
providentfund,andtheinterestwhichmayhave
accruedthereon:
(4)Anytravellingallowanceorthevalueofanytravelling
concession:
BY:MANISHA VAGHELA [email protected]

11. (5) Any sum paid to the employed person to defray
special expenses entailed on him by the nature of
his employment:
(6)Anygratuitypayableontheterminationof
employmentincasesotherthanthosespecifiedin
Clause(d)above.
BY:MANISHA VAGHELA [email protected]

12. APPLICABILITY
TheActisapplicabletopersonsemployedinany
factory,railway,andtosuchotherestablishmentsto
whichtheappropriateGovernmentmay,bynotification,
extendtheprovisionsoftheActaftergivingthree
months’noticetothateffect.Inthecaseofindustrial
establishmentsownedbytheCentralGovernmentthe
notificationcanbeissuedwiththeconcurrenceofthe
CentralGovernment.
BY:MANISHA VAGHELA [email protected]

13. ThisActappliestowagespayabletoanemployed
personinrespectofawageperiodifsuchwagesfor
thatwageperioddonotexceedRs.10,000permonth
orsuchotherhighersum,whichonthebasisoffigures
oftheConsumerExpenditureSurveypublishedbythe
NationalSampleSurveyOrganisation,theCentral
Governmentmay,aftereveryfiveyears,bynotification
intheOfficialGazette,specify.
BY:MANISHA VAGHELA [email protected]

14. RULES FOR PAYMENT OF WAGES
(SECS. 3 TO 6)
Responsibility for Payment of Wages (Sec.3)
Fixation of Wage-Periods (Sec.4)
Time of Payment of wages(Sec. 5)
Mode of payment of wages (Sec. 8)
BY:MANISHA VAGHELA [email protected]

15. 1)ResponsibilityforPaymentofWages(Sec.3):-
Everyemployershallberesponsibleforthepayment
topersonsemployedbyhimofallwagesrequiredtobe
paidunderthePaymentofWagesAct.Butinthecase
ofpersonsemployed(otherwisethanbyacontractor)in
factories,industrialestablishmentoruponrailway,the
followingpersonsshallalsoberesponsibleforthe
paymentofwages:
(a)Infactories,thepersonnamedasthemanager;
(b)Inindustrialorotherestablishment,theperson,
ifany,whoisresponsibletotheemployerfor
thesupervisionandcontroloftheindustrialor
otherestablishment;
BY:MANISHA VAGHELA [email protected]

16. (c)Uponrailways(otherwisethaninfactories),the
personnominatedbytherailwayadministrationinthis
behalfforthelocalareaconcerned(Sec.3)
Thepersonsonamed,thepersonsoresponsible
totheemployer,orthepersonsonominated,asthe
casemaybe,shallalsoberesponsibleforsuch
payment.
BY:MANISHA VAGHELA [email protected]

17. 2)FixationofWage-Periods(Sec.4):-
Everypersonresponsibleforthepaymentofwages
shallfixperiods,knownaswage-periods,inrespectof
whichsuchwagesshallbepayable.Awage-periodshall
notexceedonemonth.
BY:MANISHA VAGHELA [email protected]

18. 3)TimeofPaymentofwages(Sec.5):-
(i)Wagestobepaidbefore7
th
or10
th
day:-
Thewagesofeverypersonemployeduponorin
anyrailway,factoryorindustrialorotherestablishment
uponorinwhichlessthan1,000personsareemployed,
shallbepaidbeforetheexpiryof7
th
dayofthefollowing
wage-period.Incasethenumberofworkersexceeds
1,000,thewagesshallbepaidbeforetheexpiryofthe
10
th
ofthefollowingwage-period.Inthecaseofpersons
employedonadock,wharforjettyorinamine,the
balanceofwagesdueoncompletionofthefinaltonnage
accountoftheshiporwagons,loadedorunloaded,as
thecasemaybe,shallbepaidbeforetheexpiryofThe
secondworkingdayfromthedayonwhichhis
employmentisterminated:
BY:MANISHA VAGHELA [email protected]

19. (ii)Wagesincaseofterminationofemployment:-
Wheretheemploymentofanypersonisterminated
byoronbehalfoftheemployer,thewagesearnedby
himshallbepaidbeforetheexpiryofthe2
nd
working
dayfromthedayonwhichhisemploymentis
terminated.Wheretheemploymentofanypersoninan
establishmentisterminatedduetotheclosureofthe
establishmentforanyreasonotherthanaweeklyor
otherrecognisedholiday,thewagesearnedbyhim
shallbepaidbeforetheexpiry.
BY:MANISHA VAGHELA [email protected]

20. ofthe2
nd
dayfromthedayonwhichhis
employmentissoterminated.
(iii)Exemption:-
TheStateGovernmentmay,bygeneralor
specialorder,exemptthepersonresponsibleforthe
paymentofwagesfromtheoperationoftheabove
provisionsincertaincases.
(iv)Wagestobepaidonaworkingday:-
Allpaymentofwagesshallbemadeona
workingday.
BY:MANISHA VAGHELA [email protected]

21. 4) Mode of payment of wages (Sec. 8) :-
section 6 provides that all wages shall be paid in
currency coin or currency notes or in both:
It is provided that the employer may, after
obtaining the written authorization of employed person,
pay him the wages either by cheque or by crediting the
wages in his bank account.
All wages shall be paid in current coins or
currency notes or both. Payment of wages in kind is not
permitted. The process of payment of wages in cash is
very cumbersome where the number of workers is very
large. It is also risky where the sum involved is large
and the factory or industrial establishment is situated at
a remote place.
BY:MANISHA VAGHELA [email protected]

22. In order to obviate these difficulties and save the worker
from carrying cash on the pay day and mis-spending it,
the employer may after obtaining the written authorization
of the employed person, pay him the wages either by
cheque or by crediting the wages in his bank account.
BY:MANISHA VAGHELA [email protected]

23. DEDUCTIONS FROM WAGE (SECS. 7
TO 13)
Deductionwhichmaybemadefromwages(Sec.
7):-Thewagesofanemployedpersonshallbepaid
tohimwithoutdeductionsofanykindexceptthose
authorisedbyorunderthePaymentofWagesAct,
1936.thedeductionsfromwagesofanemployed
personmaybeofthefollowingkindsonly,namely;
1)Deductionsforfines:-
(a)Nofineshallbeimposedonanyemployedperson
saveinrespectofsuchactsoromissiononhispart
astheemployer,withthePrevious
BY:MANISHA VAGHELA [email protected]

24. approvaloftheStateGovernmentoroftheprescribed
authority,mayhavespecifiedbyanotice.
(b)Thenoticespecifyingtheactsandomissionsforwhich
finesmaybeimposedshallbeexhibitedintheprescribed
manneronthepremises(andincaseofpersons
employeduponarailway,attheprescribedplaceor
places)inwhichtheemploymentiscarriedon.
(c)Nofineshallbeimposedonanemployedpersonuntil
hehasbeengivenanopportunityofshowingcause
againstthefineandhascompletedtheageof15years.
BY:MANISHA VAGHELA [email protected]

25. (d)Thetotalamountoffinewhichmaybeimposedin
onewageperiodonanyemployedpersonshallnot
exceed3percentofthewagespayabletohimin
respectofthatwage-period.Suchafineshallnotbe
recoveredfromtheemployedpersonbyinstallmentsor
aftertheexpiryof60daysfromthedayonwhichitwas
imposed[Sec.8(6)]
2)Deductionsforabsencefromduty:-
Deductionmaybemadeonaccountoftheabsence
ofanemployedpersonfromdutyfromtheplaceor
placeswhere,bythetermsofhisemployment,heis
requiredtowork.Buttheratiobetweentheamountof
suchdeductionsandthe
BY:MANISHA VAGHELA [email protected]

26. wagespayableshallnotexceedtheratiobetweenthe
periodofabsenceandtotalperiodwithinsuchwage-
period.IthashoweverbeenheldinK.S.R.T.
Employees’Assn.VsGeneralManager,K.S.R.T.,
(1985)thatinastrikebyworkersinapublicutility
serviceliketransportservice,ifemployeesabsentfor
apartofthedaywithoutnotice,deductionoffullday’s
wageswouldnotbeunjustifiedorillegal.
3)DeductionsforDamageorLoss:-
Adeductionfordamagetoorlossofgoods
expresslyentrustedtotheemployedpersonfor
custodyorforlossofmoneyforwhichheisrequiredto
accountsshallnotexceedtheamount
BY:MANISHA VAGHELA [email protected]

27. ofthedamageorlosscausedtotheemployerbythe
neglectordefaultoftheemployedperson.Sameisthe
caseasregardslossessustainedbyarailway
administrationonaccountofanyrebatesorrefunds
incorrectlygrantedbytheemployedperson.
4)Deductionsforservices:-
Adeductionforhouseaccommodationandsuch
amenitiesandservicessuppliedbytheemployeras
havebeenauthorisedbytheStateGovernmentshallnot
bemadefromthewagesofanemployedperson,unless
suchserviceshavebeenacceptedbyhimasatermof
employmentorotherwise.Deductionsin
BY:MANISHA VAGHELA [email protected]

28. respectoftheseservicesshallnotexceedthevalue
thereof.Incaseofdeductionsasregardsservicesand
amenities,theStateGovernmentmayimpose
conditions.
5) Deductions for recovery of advances:-
Adeductionforrecoveryofanadvancegiventoan
employedpersonissubjecttothefollowingconditions
viz.,(i)recoveryofanadvanceofmoneygivenbefore
employmentbeganshallbemadefromthefirst
paymentofwagesinrespectofcompletewage-period,
butnorecoverycanbemadeofsuchadvancegivenfor
travellingexpenses:(ii)recoveryofanadvanceof
moneygivenafteremployment
BY:MANISHA VAGHELA [email protected]

29. beganshallbesubjecttosuchconditionsastheState
Governmentmayimpose:(iii)recoveryofadvancesof
wagesnotalreadyearnedshallbesubjecttoanyrules
maybytheStateGovernmentinthisregard.TheState
Governmentmayregulatetheextenttowhichsuch
advancesmaybegivenandtheinstalmentsbywhich
theymayberecovered.
6)Deductionsforrecoveryofloans:-
Deductionsforloansgrantedforhouse-buildingor
otherpurposesandtheinterestdueinrespectthereof
approvedbytheStateGovernmentshallbesubjectto
anyrulesmadebytheStateGovernmentregulatingthe
extenttowhichsuchloansmaybe
BY:MANISHA VAGHELA [email protected]

30. grantedandtherateofinterestpayablethereon.
7)Deductionsforpaymentstoco-operative
societiesandinsuranceSchemes:-
Thesedeductionsshallinclude(a)deductionsfor
paymentstoco-operativesocietiesapprovedbythe
StateGovernmentortoaschemeofinsurance
maintainedbytheIndianPostOffice;and(b)
deductionsmadewiththewrittenauthrisationofthe
personemployedforthepaymentofanypremiumofhis
lifeinsurancepolicytotheLifeInsuranceCorporation
(LIC)ofIndiaorforthepurchaseofsecuritiesofthe
GovernmentofIndiaorofany
BY:MANISHA VAGHELA [email protected]

31. StateGovernmentorforbeingdepositedinanyPost
OfficeSavingBankinfurtheranceofanysavingscheme
ofanysuchGovernment.
8)OtherDeductions:-
Thefollowingdeductionsshallalsobepermitted
undertheAct:(a)deductionsofincome-taxpayableby
theemployedperson.(b)deductionsrequiredtobe
madebyorderofaCourtorotherauthoritycompetent
tomakesuchorder[Sec.7(2)(h)](c)deductionsfor
contributionstoanyinsuranceschemeframedbythe
CentralGovernmentforthebenefitofitsemployees.
BY:MANISHA VAGHELA [email protected]

32. MAINTENANCE OF REGISTERS AND
RECORDS (SECTION -13 A)
1)Everyemployershallmaintainsuchregistersand
recordsgivingsuchparticularsofpersonsemployedby
him,theworkperformedbythem,thewagespaidto
them,thedeductionsmadefromtheirwages,thereceipts
givenbythemandsuchotherparticularsandinsuch
formsasmaybeprescribed.
2)everyregisterandrecordrequiredtobemaintained
underthissectionshall,forthepurposeofthisact,be
preservedforaperiodofthreeyearsafterthelastentry
madetherein.
BY:MANISHA VAGHELA [email protected]

33. BIBLIOGRAPHY
1. LEGAL SYSTEM IN BUSINESS
(BUSINESS LAW , COMPANY LAW,
INDUSTRIAL LAW )
BY :-P. SARAVANAVEL
S. SUMATHI
HIMALAYA PUBLISHING HOUSE
2. INDUSTRIAL JURISPRUDENCE AND LABOUR
LEGISLATION
BY :-A.M. SARMA
HIMALAYA PUBLISHING HOUSE
3.INDUSTRIAL& LABOUR LAWS
BY:-SANJEEV KUMAR
BHARAT LAW HOUSE PVT.LTD.
BY:MANISHA VAGHELA [email protected]

34. BY:MANISHA VAGHELA [email protected]