The Payment of Wages Act, 1936 Context During the initial phase of industrialization, workers had to suffer from
• Inordinate delays in payment of wages • Arbitrary cuts of wages • Other unfair practices such as deduction of two days wages for one day’s absentee The royal commission on labour 1931 recommended legal action to regulate the period of payment and to define the deductions permissible from the wages The payment of wages act came into force on 28th march 1937 The latest amendment in 1982 extended the coverage from Rs. 1000 to 1600 Objects To regulate the payment of wages to certain class of persons employed in industry “by way of” • Ensuring regularity of payment • Ensuring payment in legal tender • Preventing arbitrary deductions • Preventing imposition of arbitrary fines • Providing remedy against irregularity of payment of wages Scope and Coverage Applicable to the whole of India It covers persons employed in any factory including railway contract labour whose wages not exceed 1600 The state Government is empowered to extend the application to any industry with three months notice and in the case of establishment owned by Central Government concurrence need to be obtained Definitions Wages: Wages means all remuneration (whether by way of salary, allowances or otherwise) expressed in terms of money or capable of being so expressed which would 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. The definition includes • Remuneration payable under any award/settlement • Wages due for OT, holidays or any leave period
Deductions permitted under the act: i. family pension schemes etc or the interest acquired • Travelling expenses / commissions Rules for payment • Responsibility for payment is with manager or supervisor (sec. before the expiry of the 7th day after such completion o All payment of wages shall be done on a working day Medium of payment (sec. supply of water. The notice specifying the act be exhibited in the prescribed manner on the work place iii. the balance due on completion is of the kind to manage. All fines and realizations need to be recorded in a register in a prescribed form B. Deductions for absence from duty
. 7) A. No fine for those below 15 years vi. Prior to the fine. 6) • Shall be paid in current coin and currency • With written authorization. 4) shall not exceed one month • Time of payment of wage (sec. No recovery of fine by installment or after the expiry of 6 days from the date in which it was imposed vii.• •
Any additional remuneration payable under the terms of employment (whether called ‘bonus’ or by any other name) Any sum due to the termination of employment liable under any law (e. Should not exceed 3% of wage in that wage period v. Fines: with the previous approval of the state government ii. 3) • Fixation of wage period (sec.g. jetty. mine. show cause opportunity be given iv. 2nd working day o In the case of dock. 5) o If number of workers is less than 1000 (including daily rated workers) wages must be paid before the expiry of the seventh day after the last day of the wage period o In another cases before the 10th day o In case of termination. electricity or medical attendance • Contributions given to PF. Gratuity)
The definition excludes • Any bonus which does not form part of the remuneration payable under the terms of employment or settlement • The value of house accommodation. by cheque or crediting in the bank account Authorized deductions (sec.
Such services have been accepted by the employed person as a term of his employment ii. Deductions for accommodation and services (sec. Deductions for damage or loss i. Contribution to insurance schemes framed by central government Illegal deductions • Damage or loss is not directly attributed to his neglect
i. The amenities and services must be authorized by the state government by a general or special order E. Recovery of loss due to failure to raise invoice to bill (in railway administration) vi. 11) subject to the following conditions i.From the place where he is registered to work Refuses to carry out work (stay in strike) iii. With written authorization of the person employed H. If 10 or more persons absent without notice and reasonable cause fine can be of not exceeding 8 days wage in lieu of notice C. Income tax ii. Services do not include the supply of tools and raw materials required for the purpose of the employment iii. Deductions shall not exceed the actual cost of loss iii. Deductions for payment to co-operatives. Repayment of advances fro PF a/c iv. Insurance premium on fidelity guarantee bonus v. The amount of deduction should not exceed an amount equivalent to the value of accommodation / services iv. Deductions for the recovery of advance (sec. All deductions for such purpose need to be recorded in a register D. 12) i. Other deductions i. Deductions for recovery of loans made from any fund constituted for the welfare of labour and the interest due provided the fund is constituted as per the rules of state government G. Any refund incorrectly granted due to neglect vii. Directed by a court order iii. ii. insurance schemes etc. Written authorization to contribute to Prime Minister’s relief viii. i. but not travelling expenses ii. Advances after employment began shall be subject to what state government imposes F. Co-operative or scheme needs to be approved by state government ii. Prior to that show cause opportunity needs to be given iv. The ratio between the period of absence and total wage period should not exceed the amount of deduction iv. Loss of goods or money due to neglect or default ii.
. Advance given prior to employment should be deducted from the first payment.
if improper deduction or Rs.• •
Deductions for tools and raw materials supplied to him Deductions for insurance premium without written authorization
Limits on the amount • Exceed 75% of wage towards payment to cooperatives and 50% in other cases Registers and Records • The work performed by the person • The wages paid • The deductions made from the receipts given by him • These shall be preserved at least for a period of 3 years Authority . seize or take copies of registers or documents etc. fails to pay wage on a working
. but more deductions. search. make verdict • If refund. makes unauthorized 200/-. Applicant for claim • The person employed himself • Legal practitioner • Official of a registered trade union • Inspector under the act • Any other person acting with the permission of the authority of the act • Application needs to be made within 12 months and if sufficient reason it can be beyond 12 months also Procedure • Application for claim • Opportunity to hear both parties • Do inquiry if necessary • Without prejudice.25 in case of delayed wages • However no compensation if delay is due to: o A bonafide error or dispute o Occurrence of an emergency o Failure of the employed person to apply for the payment Offences and penalties Penalties Offences Not less than Rs. not exceed 10 times. examine the records. inquiry.Inspectors of factories act • Powers of inspectors: Examination. Fails to pay wage on time. examine the payment of wages. supervise the payment of wages. inspect. fix wage period than 1000/exceeding one month. impose illegal fines.
1 to 3 months of imprisonment or 500 to 3000 fine or both if convicted again within a span of 2 years for same offence. willfully refuse to produce any register or document on demand ctc
. refuses to furnish information Willfully obstruct inspector in the discharge of his duties. 100 fine for each day for confinement of delay in payment of wage on fixed day
day. Rs. fails to maintain necessary records. preventing any person from appearing before inspector.