Chapter III Payment of wages

Sec 15 – sec 25
 Chapter III
Payment of Wages- (15-25)
18. Deductions
15. Mode of 17. Time limit
16.Fixation of which may be
payment of for payment of
wage period made from
wages wages wages.

20. Deductions 21. Deductions 22. Deductions

19. Fines for absence from for damage or for services
duty. loss. rendered

23. Deductions 24. Deductions 25. Chapter

for recovery of
for recovery of not to apply to
advances
loans Government
 Objectives
1. To regulate the payment of wages of persons employed
2. To prevent unauthorized deductions wages
3. The fixation of wage period than amount of wages
4. To prevent disputes & safeguard employee interests
• Employees Salary is below/equal to Rs 24000- August, 2017
• Apply to establishment in which 20 or more persons are
employed/were employed on any day an accounting year
• Part I - The regulation -payment of wages
• Part II -Heads under which deduction be mad

3
 Problems – in pay
• Problems faced by the employees
1. Withholding Payment or Delays
2. Unreasonable Deductions
3. Unjustified fines or penalty-fine
4. Lack of uniformity
• What is the solution?
– Timely
– Uniformity
– Deductions specified by law
• Passed in 1936 In force from 28th March, 1937
 Introduction
• The Payment of Wages Act, 1936
– Regulate payment of wages- at regular intervals
– To prevent unauthorized deductions wages.
– Concerned with the fixation of wage period not
about the wages
– The Rules for the payment
– Heads under which deduction be made
– Procedure for enforcing
 15. Mode of payment
• 15. Mode of payment shall be paid in
• Current coin/currency
• Cheque Credit
• Electronic mode
• Mode of pay
– Notification by Govt
– Pay only by cheque
– Crediting wages
– Same as 1936
 16. wage period.
• The employer shall fix wage period.
– Either as daily
– or weekly
– or monthly
– No more than a month
• Different wage periods
– For different establishments.
 17. Time limit
• Shall pay or cause to be paid wages to the employees
– Inordinate delay is not caused
– A long time does not elapse
• On Daily basis
– At the end of the shift
• On weekly basis
– last working day of the week, before the weekly holiday
• On Fortnightly basis
– Before the end of the second day after the fortnight
• On Monthly basis- In PBA-1936 7th day and 10th day
– Before the expiry of seventh day of the succeeding month
 17. Time limit
• if an employee is
– (i) removed or dismissed from service;
– (ii) retrenched or has resigned from service,
– became unemployed due to closure of the
establishment,
– (2) The wages payable to him be paid within two
working days of removal, dismissal, retrenchment
or, resignation
• AG may, provide any other time limit for payment of
wages where it considers reasonable
 Rules for payment of wages
• What is the Time of payment of Wages ?
– Wages of an employee shall be paid to him without
any deductions of any kind except authorized
Daily, weekly, fortnightly and monthly.
– Payment thereof must not extend over a period
longer than one month (4 weeks/30 days).
• Before the expiry of the 7th day, after the last day of
the wage period for others
• If an employee is
– Removed or dismissed retrenched or resigned or
unemployed due to closure of the establishment
– Wages to be paid within 2 working days of ….
10
 18. Deductions wages.
• Notwithstanding anything contained
– No deductions from wages unless authorized
• Deduction
– Any payment made by an employee for
• Any loss of wages , for a good/sufficient cause
• Withholding of increment or promotion, or stoppage by employer
• Reduction to a lower post or time-scale
• Suspension
• Reduction shall not be deemed to be a deduction
• if such purposes are not satisfying the requirements
specified in the notification
 Various Kinds of Deductions
• Fines imposed
• Absence from duty
• Damage/loss of goods
• House-accommodation
/amenities/services subject
to such conditions
prescribed
• Deductions for such
amenities and services
supplied by the employer
• Deductions for recovery of
advances given after joining
• Deductions for pay not
earned /overpay
• Recovery of Loans given
• Deductions of income-tax
• Any other statutory levy
• Deductions for subscription
• social security fund
• co-operative society
• PM Relief Fund
 Total amount of deductions
• (3) The total amount of deductions under sub-
section (2) in any wage period
– Shall not exceed fifty per cent. of such wages.
• (4) Where the total deductions exceed 50%
– The excess may be recovered as prescribed.
 Deductions
• 19. Fines imposed
• 20. Deductions for absence from duty
• 21. Deductions for damage to or loss of goods
– Expressly entrusted to the employee for custody
– For loss of money accountable for
• where such damage or loss is directly attributable to neglect
• 22. Deductions- accommodation /amenities /services
– Supplied by employer /subsidizing house-accommodation
– Not exceed an amount equivalent to the value of such
amenities and services.
 Deductions
• Exceptions
• Penalties imposed with sufficient cause
• Withholding of increment or promotion ( stoppage at an
efficiency bar)
• Reduction to a lower post or time scale
• Suspension - Lesser work load
• Fine cant be imposed unless acts Specified-approved
• Specified-by the employer & approved by the state
• Informed in writing
• A person involved must be given the reasons for fine
 Deduction maximum
• Total amount of deductions in any wage period
– shall not exceed 50% of such wages PBA-1936 = 75%
• If total deductions authorized exceed 50% of wages
– Excess may be recovered as may be prescribed.
 19. Fines.
• Employer shall not impose fines on any employee in
respect of those acts and omissions Without
– 1. Previous approval of the appropriate body
– 2. Exhibit a notice
– Specify acts and omissions prescribed, on premises
– 3. Procedure for imposing the Fine
• No fine shall be imposed until such employee has been
given opportunity of showing cause against the fine
• Total amount of fine imposed in any one wage-period
– Not exceed 3% of the wages payable-same as PBA-1936
 Fines
• No fine for any employee under the age of 15 years
• No fine imposed be recovered
– By installments after the expiry of 90 days from which it
was imposed. PBA – in 60 days
• Every fine shall be imposed on the day of the act
• Register
– All fines and all realizations shall be recorded in a register
– Kept in such manner and form as may be prescribe
– Realizations shall be applied only to such purposes
beneficial to the persons employed in the establishment as
are approved
 Deductions for absence from duty.
• (1) Deductions may be as clause (b) sec 2 of 18 Absence of
an employee for the whole or any part of the period during
which he is so required to work
• (2) The amount of such deduction is not larger proportion than
the period for which he was absent
• 10 or more absent themselves without due notice
– Without giving the notice required by contract
– Without reasonable cause
– Amount not exceeding wages for 8 days in lieu of notice
• An employee shall be deemed to be absent if Although
present refuses to work in pursuance of a stay-in strike Any
other cause which is not reasonable in the circumstance
 21. Damage or loss
• Clause (d)/ (e) of (2) of section 18
– Expressly entrusted to the employee for custody
– For loss of money accountable for where such damage or loss is
directly attributable to neglect
• 1. Deductions for damage caused should not exceed the loss
• 2. Deduction for Goods entrusted to employees
– If damage is attributable to the negligence or default of
employee & be given an opportunity to hear
• 3. An opportunity of showing the cause to the employee
– Deduction from salary or damage or loss only After giving
the cause against the employee who is responsible for
Neglect
• 4. All such deductions and realizations Recorded in a register
 22. Deductions for services rendered
• Clause (d)/(e) of sub-section (2) of section 18
• Shall not be made from the wages unless
– House-accommodation amenity or service has
been accepted by him as a term of employment
– Such deduction shall not exceed an amount
equivalent to the value of the house/ amenity or
service supplied
 Responsibility for Deductions
• Employer responsible
– Where any deduction is made by the employer
from the wages of an employee under this section
– If Not deposited deductions in the account of the
trust or Government fund or any other account, as
required under the provisions of the law
 23. Deductions for recovery of
advances.
• Advance given before • Advance given AFTER the
the employment began employment began
– Shall be made from the – subject to conditions as
first payment of wages to may be prescribed;
him in respect of a • Advances of wages to an
complete wage-period employee not already earned
– No recovery of – subject to such
advances for travelling conditions as may be
expenses prescribed.
– Same as PBA
 24. Deduction recovery of loans.
• Loans granted to an employee
– Regulating the extent to which such loans may be
granted
– The rate of interest payable thereon, shall be such as
may be prescribed
• Obligation to Maintain register
– To maintain following register in the prescribed form
(i) Register of wages paid for the work done
(ii) Register of fines and receipts given
(iii) Register of deductions for damage or loss
(iv) Register of advances
25 . Chapter not to apply establishments
• Not apply to the Government establishments
– unless the appropriate Government, by
notification, applies