payment of wages act 1936 (amended 2012)

THE PAYMENT OF WAGES ACT 1936 (No. IV of 1936)

• An Act to regulate the payment of wages to certain classes of

[employed persons] [23rd April, 1936]

• Cap for applicability of Payment of Wages Act 1936 increased

to Rs.18,000 p.m. w.e.f 11th Sep 2012 ( Earlier it was 10000)

• This Act may be called the Payment of Wages Act, 1936.

• It extends to the whole of India

• The Central Government is responsible for enforcement of the Act in

railways, mines, oilfields and air transport services, while the State

Governments are responsible for it all other establishments (

factories and other establishments)—amendment 2005.


• It applies in the first instance to the payment of wages to persons employed in any [factory to persons] employed (otherwise than in a factory) upon any railway by a railway administration or either directly or through a sub-contractor, by a person fulfilling a contract with a railway administration [and to persons employed in an industrial or other establishment specified in sub-clauses (a) to (g) of clause (ii) of section 2.].

THE PAYMENT OF WAGES ACT 1936 (No. IV of

1936)

• The State Government may extend the provisions of this Act or anyof them to the payment of wages to any class of persons employedin [any establishment or class of establishments specified by theCentral Government or a State Government.

• "employed person" includes the legal representative of a deceasedemployed person;

• "employer" includes the legal representative of a deceasedemployer

• any sum to which the person employed is entitled under any schemeframed under any law for the time being in force ;but does not include- a) bonus (profit sharing); b) value of houserent accommodation or supply of light, water medical attendance orother amenities (excluded from computation of wages ; c)employer’s contribution to pension, PF, and interest thereon;d)Leave travel facility; e) special expenses on account of nature ofemployment and f) gratuity


Every employer shall be responsible for the payment to persons employed by him of all wages required to be paid under this Act :

• (a) In factories, if a person has been named as the manager of the factory under clause(f) of sub-section(1) of section(7) of the Factories Act, 1948 (63 of 1948) ;

• b) in industrial or other establishments, if there is a person responsible to the employer for the supervision and control of the industrial or other establishment

• the railway administration has nominated a person in this behalf for the local area concerned, the person so named, the person so responsible to the employer or the person so nominated as the case may be, shall also be responsible, for such payment.


Wage Period:• (1) Every person responsible for the payment of wages under section 3 shall fix

periods (in this Act referred to a wage period) in respect of which such wages shall be payable.

• (2) No wage-period shall exceed one month.

Time for payment of wages• (1) The wages of every person employed upon or in-• (a) any railway, factory or [industrial or other establishment] upon or in which

less than one thousand persons are employed, shall be paid before the expiry of the seventh day.

• (b) any other railway, factory or [industrial or other establishment] shall be paid before the expiry of the tenth day, after the last day of the wage-period in respect of which the wages are payable :


• (2) Where the employment of any person is terminated by or on behalf of theemployer, the wages earned by him shall be paid before the expiry of the secondworking day from the day on which his employment is terminated;

• The State Government may provide exemptions for employers to pay wages to certaincategories eg. Daily wagers in PWD of Central or State Government,

• Payment: Payment of Wages shall be on a working day and in currency and coinsand/or both

• On obtaining employee’s mandate the employer can issue cheques or credit the bankaccounts directly or any other mode (ECS etc)

• Deductions permissible: The following are the permissible deductions from wages: a)Any loss of wages resulting from the imposition, for good and sufficient cause, upon aperson employed, of any of the following penalties, namely :-(i) the withholding ofincrement or promotion (including the shoppage of increment at an efficiency bar) ;

(ii) the reduction to a lower post or time-scale or to a lower stage in a time-scale ; b)Fines with the sanction of the appropriate authorities

•


Fines:

• Notice to the employee about the acts and omission

• Give a reasonable opportunity to the employee

• Total fines shall not exceed 3 per cent of wages pertaining to that

wage period.

• No fine for workers below the age of 15 years

• No recovery of fines after 60 days or by instalments

• Separate register to be maintained


• Deductions for absence from duties for the purpose of this section, anemployed person shall be deemed to be absent from the place where heis required to work if, although present in such place, he refuse, inpursuance of a stay in-strike or for any other cause which is notreasonable in the circumstance, to carry out his work.

• Deductions of damage or loss - (1) A deduction shall not exceed theamount of the damage or loss cause to the employer by the neglect ordefault of the employed person.—Reasonable opportunity to theemployee, maintenance of a separate register are other requirements.

• Deductions for services rendered like House Rent or a concessional rent once it is accepted by the employee

• Deduction for recovery of advances: Advance salary, Festival advance or other types of advance payments in anticipation of salary

• A Deductions for recovery of loans


• Deductions towards subscriptions to and for repayment of advances from any provident fund;

• Deductions towards income tax

• Deductions for payment to co-operative societies and insurance schemes approved by the State Government ( postal insurance)

• deductions made with the written authorisation of the employee for payment of any premium on his life insurance policy or purchase of securities.


• Inspectors - (1) An Inspector of Factories appointed under sub-section(1) of section 8 of the Factories Act, 1948 (63 of 1948) shall be an Inspector for the purpose of this Act in respect of all factories within the local limits assigned to him.

•

• (2) The State Government may appoint Inspectors for the purposes of this Act in respect of all persons employed upon a railway (otherwise than in a factory) to whom this Act applies.

•

• (3) The State Government may, by notification in the official Gazette, appoint such other persons as it thinks fit to be Inspectors for the purpose of this Act, and may define the local limits within which and the class of factories and industrial or other establishments in respect of which they shall exercise their functions.


• Contracting out - Any contract or agreement, whether made before orafter the commencement of this Act, whereby an employed personrelinquished any right entered by this Act shall be null and void in so far asit purports to deprive him of such right.

• Application of Act to railways, air transport services mines and oil-fields -The powers by this Act conferred upon the State Government shall inrelation to railways, air transport services, mines and oilfields, be powersof the Central Government.

• Display by notice of abstracts of the Act - The person responsible for thepayment of wages to person shall cause to be displayed in such factory orindustrial or other establishment a notice containing such abstracts of thisAct and of the rules made thereunder in English and in the language of themajority of the persons employed.


• Payment of undisbursed wages, in cases of death of employed person- INcase of death of an employee or his whereabouts not known the wagespayable should be paid to a) the nominee; or b) deposited with theprescribed authority. IN these cases, the employer is discharged from hisobligations

• State Government has regulatory powers to lay down the procedure tobe adopted by the authorities and the courts. Such regulations mayrelate to a)maintenance of records, registers returns and notices and theparticulars to be entered thereon; b) Display of rates of wages fordifferent categories and c)regular inspection of weights and measures re:wages


• Hence, the main object of the Act 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 unauthoriseddeductions

• Amendment in 2005 or Payment of Wages Act enhanced the ceiling from 1600 to 6500 per month


Authorised Officers:

The appropriate Government may, by notification in the Official Gazette, appoint-(a) any Commissioner for Workmen's Compensation; or(b) any officer of the Central Government exercising functions as,- (i) Regional

Labour Commissioner; or (ii) Assistant Labour Commissioner with at least twoyears' experience; or

(c) any officer of the State Government not below the rank of Assistant LabourCommissioner with at least two years' experience; or

(d) a presiding officer of any Labour Court or Industrial Tribunal, constituted underthe Industrial Disputes Act, 1947 (14 of 1947) or under any corresponding lawrelating to the investigation and settlement of industrial disputes in force in theState; or

(e) any other officer with experience as a Judge of a Civil Court or a JudicialMagistrate,

as the authority to hear and decide for any specified area all claims arising out ofdeductions from the wages, or delay in payment of the wages, of personsemployed or paid in that area, including all matters incidental to such claims:


Authorised Officers:

• Where the appropriate Government considers it necessary so todo, it may appoint more than one authority for any specified areaand may, by general or special order, provide for the distribution orallocation of work to be performed by them under this Act.";

• The authority shall hear the applicant and the employer or otherperson responsible for the payment of wages or give them anopportunity of being heard, and, after such further enquiry, ifany, as may be necessary, may, without prejudice to any otherpenalty to which such employer or other person is liable under thisAct, direct the refund to the employed person of the amountdeducted, or the payment of the delayed wages, together with thepayment of such compensation as the authority may think fit(subject to maximum limits prescribed by the Act from time totime.


Authorised Officers:• A claim under this Act shall be disposed of as far as practicable

within a period of three months from the date of registration of the claim by the authority:

• Extension of time permitted if both parties to the dispute agree for any bona fide reason to be recorded by the authority that the said period of three months may be extended to such period as may be necessary to dispose of the application in a just manner:

• No direction for the payment of compensation shall be made in the case of delayed wages if the authority is satisfied that the delay was due to- (a) a bona fide error or bona fide dispute as to the amount payable to the employed person;

payment of wages act 1936 (amended 2012)

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