University School of

Business
Bachelor of Business
Administration

Industrial Relations and

Labor Laws
20BAT-375
Payment of DISCOVER . LEARN .
Wages Act, 1936 EMPOWER
 Payment
of Wages Act,
1936
Course Outcome
CO Title Level
Number

CO1 Understanding of the concept of Rememb

industrial relations, functioning of trade er Will be covered in this
unions and legal Machinery for handling   lecture
industrial disputes.

CO2 Knowledge of protective and social Understa

security laws of India and their nd
application.   https://
www.rightsofemployees.co
CO3 Understanding of the role of ILO in Apply
m/payment-of-wages-act-
regulating industrial relations, importance
of collective bargaining and workers’ 1936/
participation.

2
 Introduction
• Prior to 1936, there was no law regarding the regulation of payment to
workmen. It was as early as 1925 that a Private Bill called the “Weekly
Payment Bill” was for the first time introduced in the Legislative
Assembly.

• The Bill was an attempt to remedy some of the evils like delay in
payment of wages, non-payment of wages, deductions made from wages
on account of fines imposed by the employer etc.
 Application of the Act
The Payment of Wages Act, 1936 extends to the whole of India. It came
into operation of 28th March, 1937. It applies in the first instance to the
payment of wages to:

• persons employed in any factory;

• persons employed (otherwise than in factory) upon any railway by a
railway administration,
• either directly or, through a subcontractor, by a person fulfilling a
contract with railways administration; and
• persons employed in an industrial or other establishment specified in sub-
clauses (a) to (g) of clause (ii) of section 2.
 Basic Provisions and
Responsibility of this Act
1. The person responsible for payment of wages shall fix the wage period
upto which wage payment is to be made. No wage-period shall exceed one
month.

2. All wages shall be paid in current legal tender, that is, in current coin or
currency notes or both. However, the employer may, after obtaining written
authorisation of workers, pay wages either by cheque or by crediting the
wages in their bank accounts
 Basic Provisions and
Responsibility of this Act
3. All payment of wages shall be made on a working day. In railways,
factories or industrial establishments employing less than 1000 persons,
wages must be paid before the expiry of the seventh day after the last date
of the wage period.

In all other cases, wages must be paid before the expiry of the tenth day
after the last day of the wage period. However, the wages of a worker
whose services have been terminated shall be paid on the next day after
such termination.
 Basic Provisions and
Responsibility of this Act
Although the wages of an employed person shall be paid to him without
deductions of any kind, the Act allows deductions from the wages of an
employee on the account of the following:-
(i) fines;
(ii) absence from duty;
(iii) damage to or loss of goods expressly entrusted to the employee;
(iv) housing accommodation and amenities provided by the employer;
 Basic Provisions and
Responsibility of this Act
(v) recovery of advances or adjustment of over-payments of wages;

(vi) recovery of loans made from any fund constituted for the welfare of
labour in accordance with the rules approved by the State Government, and
the interest due in respect thereof;

(vii) subscriptions to and for repayment of advances from any provident

fund;

(viii) income-tax;
 Basic Provisions and
Responsibility of this Act
(ix) payments to co-operative societies approved by the State Government
or to a scheme of insurance maintained by the Indian Post Office;

(x) deductions made with the written authorisation of the employee for
payment of any premium on his life insurance policy or purchase of
securities.
 Summary
• The Payment of Wages Act, 1936 is a central legislation which has
been enacted to regulate the payment of wages to workers employed
in certain specified industries and to ensure a speedy and effective
remedy to them against illegal deductions and/or unjustified delay
caused in paying wages to them.
Assessment Pattern

11
 Applications

• •HRCompensation
Budgeting

• •Manpower
Employeeallocation
rights protection

• Performance management

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 REFERENCES

• Reference Books- S.C. Srivastava, Industrial Relation & Labour

Laws,Vikas Publishing; Seventh edition (1 January 2020)

• Reference Journal for advance study- Indian Journal of Industrial

Relations,JSTOR

• Reference Website-
 https://labour.gov.in/sites/default/files/
ThePaymentofWagesAct1936_0.pdf

 https://www.ilo.org/dyn/natlex/docs/ELECTRONIC/
102100/123307/F-796748822/PAK102100.pdf

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THANK YOU

For queries
Email: amrit.usb@cumail.in

Jaspreet.mba@cumail.in