COMPENSATION MANAGEMENT

³ALL ABOUT WAGESµ

CONCEPT OF WAGE 
Meaning Importance How its different from compensation, income and salary Types of wages Methods of wage payment

PAYMENT OF WAGES ACT 1936
y OBJECTIVES ‡ Regulating payment of wages ‡ Imposing fines/deduction from wages ‡ Laying down `Wage period` ‡ Time and Mode of payment of wages

To prevent malpractices by employers.

Scope
y This acts applies to those persons employed directly or indirectly in 1. 2. 3. 4. 5. 6.

Factory Railway Air Transport Services Mines or oil field Workshop in which articles are manufactured or produced State / Central Government establishment

Coverage
y Applies to employees drawing wages upto 6500 Rs. y This limit will be suitably increased by central Government after every 5 years. y Wages means all remuneration expressed in terms of money and includes remuneration payable under any award or settlement, overtime wages ,wages for holiday and any sum payable on termination of employment (bonus is not included).

Employer·s Obligations
y Fixation of wage period- Daily, Weekly, Fortnightly, Monthly y Time of payment- 7th day after wage period [working day] y 10th day [employees more than 1,000]

y Mode of payment-Coins and currency notes
y Payment in Case of Death of Employee ² Nominee or

prescribed authority y Returns/Registers and Records-To file annual return by the 15th Feb. of following year.

Permissible Deductions
y Maximum deductions ² 50% ; where contribution to Cooperatives - 75% y Grounds - Absence from duty ‡ Fines ‡ Damages/loss caused ‡ Recovery of Advances ‡ TDS ‡ Employees` ESIC, PF Contributions, LIC ‡ premium ‡ Amenities provided ‡ Court Orders [Recovery]

THE MINIMUM WAGES ACT 1948
OBJECTIVES ‡ To provide for Minimum wages for certain employees ‡ To stop exploitation of labour ‡ The acts also provides for maximum daily hours, weekly rest day and overtime

fixing minimum wages
By The Governmenty The no. of working hours in day with one or more intervals. y Provide for a paid rest day in every period of 7 days y The minimum wages rates will be different for different classes of employees- skilled, semi skilled, unskilled .

Territory of Delhi - Minimum wages

Obligations of Employers
y Payment of minimum wages- The employer is bound to pay to every employees minimum wages. y Wages in cash- wages should be paid in cash. y Overtime Wages-Twice the normal wages. y Payment of Undisbursed amount- On account of death of employee then same shall be deposited to prescribed authority.

Penalties
Payment of Wages less than fixed minimum wages ² y Imprisonment upto 6 months or fine upto Rs. 5oo or both Contravention of any Rule or order ² y Fine upto Rs. 500

Determinants of wages

Flaws In Indian Wage System
y Wages are not decided by market forces instead they are decided by institutions. y Implementation of laws is not proper. y Wages in organized sector are fix but in unorganized sector in Indian wages are not fixed.

contd
y Piece wage system should be introduced instead fix wage system so that competitive prices of products can be introduced. y Organization should revised wage as per market conditions.

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