Payment of wages act, 1936 - INDIA

Payment of Wages Act, 1936 - India
Introduction
wages
responsibility for payment of wages
fixation of wages
time of payment of wages
deductions
fines
claims
Appeal
penalty
references

1. Payment of wages act, 1936 Prepared by Joydeep Singh 191103

2. introduction Act came into force on 23rd April 1936 It regulates payment of wages to employees (direct and indirect). The act is intended to be a remedy against unauthorized deductions made by employer and/or unjustified delay in payment of wages Act covers employees receiving wages up to INR 24,000 per month w.e.f August 29, 2017.

3. Wages Defined under sec. 2(6) - “Wages” means all remuneration (whether by way of salary, allowances or otherwise) if the terms of employment were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment. any amount payable under any award or settlement on/or by order of a Court any remuneration for overtime work or holidays or any leave period any additional amount payable under the terms of employment (whether called a bonus or by any other name) any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument with or without deductions but does not provide for the time within which the payment is to be made any sum to which the person is entitled under any scheme framed under any law for the time being in force

4. Wages But does not include – any bonus (whether under a scheme of profit sharing or otherwise) which does not form part of the remuneration payable under the terms of employment the value of any house-accommodation, or of the supply of light, water, medical attendance or other amenity any contribution paid by the employer to any pension or PF, and the interest which may have accrued thereon any travelling allowance or the value of any travelling concession any sum paid to the employed person for special expenses due to employment any gratuity payable on the termination of employment in cases other than those specified in sub-clause (d)]

5. 3. Responsibility for payment of wages Every employer shall be responsible for the payment of all wages In factories, the person who has been named as the manager, under factories act In industrial or other establishments, if there is a person responsible to the employer for the supervision and control of the industrial or other establishments For railways person nominated by railway administration In the case of contractor, a person designated by contractor who is directly under his charge any other case, a person designated by the employer, the person so nominated or designated shall be responsible for such payment.

6. 4. Fixation of wage-periods Every person responsible for the payment of wages under Section 3 shall fix periods and No wage-period shall exceed one month.

7. 5. Time of payment of wages A) If no. of persons employed in factory, industrial or other establishment or in railway Wages to be Paid before 7th Day- If person employed less than 1000 persons Wages to be Paid before 10th day – If person employed more than 1000 persons In Case of Dock, Wharf or Jetty or in Mine- Before expiry of the second working day from the day on which his employment is terminate B) Wages in case of Termination of Employment Before the expiry of the 2nd working day from the day on which his employment is terminated. In case of closure of the establishment for any reason other than a weekly or other recognized holiday a wages must be paid before the expiry of the 2nd day

8. 5. Time of payment of wages C) Exemption – If the State Government may given general or special order ,exempt the person responsible for the payment of wages from the operation of the above provisions in certain case. D) Wage To be paid on a working Day – Except under sub– section 2 all payments of wages must be made on a working day

9. 6. Wages to be paid in current coin or currency notes All wages shall be paid in current coin or currency notes or in both After writing authorization of employed person pay him wages either by cheque or by crediting the wage in his bank account

10. Deductions Employer is allowed to effect only authorized deductions, as specified in the Act. This include fines (Section 8) Absence from duty (Section 9) Damages or loss (Section 10) Deduction for services (amenities ) given to employer (Section 11) Recovery of advances and loans (Section 12, 13) Payment to cooperative society and insurance (Section 13).

11. 7. Deductions Which may be made from wages The wages of an employed person shall be paid to him without deduction of any kind except those authorized by or under this Act 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 deduction for absence from duty deductions for damage to or loss of goods deductions for house-accommodation supplied by the employer or by Government

12. 7. Deductions Which may be made from wages deductions for such amenities and services supplied by the employer deductions for recovery of advances of whatever nature (wages, conveyance allowance etc.) deductions of income-tax payable by the employed person deductions required to be made by order of a Court or other authority deductions for subscriptions to, and for payment of advances from any provident fund, LIC, Trade union memberships etc.

13. 8. fines No fine shall be imposed on any employed person save in respect of such acts and omissions without approval of appropriate authority A notice specifying such acts and omissions shall be exhibited in the prescribed manner on the premises in which the employment is carried on No fine shall be imposed on any employed person until he has been given an opportunity of showing cause against the fine The total amount of fine which may be imposed in any one wage- period shall not exceed an amount equal to 3% of the wages payable No fine shall be imposed on any employed person who is under the age of fifteen years.

14. 8. fines No fine imposed on any employed person shall be recovered from him by instalments or after the expiry of 90 days from the day on which it was imposed. Every fine shall be deemed to have been imposed on the day of the act or omission in respect of which it was imposed. All fines and all realizations thereof shall be recorded in a register to be kept by the person responsible for the payment of wages

15. 9. Deductions for absence from duty It must be deducted by employer for the one day or for any period It Should not be exceed a sum which bears the same relationship to the wage payable in respect of the wage period as this period of absence does not to such wage period Employee refuses to work without proper reason when he is present for the work place must be deemed to be absent from duty

16. 10. Deductions for damage or loss Give opportunity to explain reason or cause for damage or loss happened Deduction amount must not be exceed than value or amount of damage or loss All deductions and realization must be recorded in a register to be kept by responsible person

17. 11. Deductions for services rendered Employer can be made deduction for the house accommodation provided to employee - This facility must be accepted by employee Deduction should not exceed an amount equivalent to the value of the house accommodation provided. Employer can be made deduction for the amenities and services provided to employee Deduction should not exceed an amount equivalent to the value of the amenities and services supplied

18. 12. Deductions for recovery of advances Advance paid to employee before employment began, this amount recovered from first payment of the wages to employee Amount of advance given for travelling expenses can not recovered

19. 12. Deductions for recovery of loans Employer can made deduction for recovery of loans with interest made from any fund constituted for the welfare of labor in accordance with the rules approved by state Govt. 13. Deductions for payments to co-operative societies and insurance schemes It must be approved by State Govt. or prescribed officer -Deduction made with written authorization of employed person. -Deduction made as per condition given by the State Govt

20. 15. Claims arising out of deductions Claims arising out of deductions from wages or delay in payment of wages and penalty for malicious or vexatious claims The appropriate Government may appoint (a) any Commissioner for Workmen's Compensation (b) any officer of the Central Government exercising functions as,— ( i ) Regional Labour Commissioner (ii) Assistant Labour Commissioner with at least two years‟ experience

21. 15. Claims arising out of deductions (c) any officer of the State Government not below the rank of Assistant Labour Commissioner with at least two years experience (d) a presiding officer of any Labor Court or Industrial Tribunal or under any corresponding law relating to the investigation and settlement of industrial disputes in force in the State (e) any other officer with experience as a Judge of a Civil Court or a Judicial Magistrate person himself, or any legal practitioner or any official of a registered trade union authorized in writing to act on his behalf, or any Inspector under this Act may apply to such authority for a direction application shall be presented within 12 months from the date on which the deduction from the wages was made

22. 17. Appeal An appeal against an order dismissing either wholly or in part an application made may be preferred within thirty days of the date on which was made, before the Court of Small Causes and elsewhere before the District Court if the total sum directed to be paid by way of wages and compensation exceeds three hundred rupees if the total amount of wages claimed to have been withheld from the employed person exceeds twenty-rupees or from the unpaid group to which the employed person belongs or belonged exceeds fifty rupees imposing on the employer or the other person a financial liability exceeding one thousand rupees

23. 20. Penalty for offences under the Act Violating the provisions of the act – fine Rs 1500 – Rs 7500 Not nominating or designating a person for wages - fine which may extend to Rs 3000. Not maintaining any records or registers or not furnishing any information – Fine Rs 1500 – Rs 7500 If any person who has been convicted under this Act is again guilty - imprisonment minimum 1 month up to 6 months and fine Rs 3750 – Rs 22500 or both If any person fails or willfully neglects to pay the wages - additional fine up to 750 for each day for which such failure or neglect continues.

24. references https://clc.gov.in/clc/acts-rules/payment-wages-0 https://blog.ipleaders.in/payment-wages/ https://labour.gov.in/sites/default/files/ThePaymentofWagesAct1936_0.pdf

25. Thank you