PAYMENT OF WAGES ACT 1936
BY
SMART LEARNING WAY
Definition of Wages
(a) 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, express or implied, were fulfilled, be payable to a person employed
in respect of his employment or of work done in such employment. Simply stated ‘wages’ means all remuneration
due to any worker or employee if the terms of contract of employment are fulfilled.
[Sec. 2(6) of the payment
of wages Act
1936 ]
(b)Wage-Period
Every
person responsible for the payment of wages shall fix periods, known as
wage-periods, in respect of which such wages shall be payable. A wage-period
shall not exceed one month. (Sec 4.
of the payment
of wages act
1936)
(a) Time
of payment of
wages.
Time of
payment of wages
is very important
rule for payment
of wages. Every employees
would like to
obtain their wages
time to time. So.
Payment of wages
act give some
rules for payment
of wages in
some fixed time
are given below:
(i)
Wages to be paid before 7th or 10th day :-
The
wages of every person employed upon or in any railway, factory or industrial or
other establishment upon or in which less than 1,000 persons are employed,
shall be paid before the expiry of 7th day of the following
wage-period. In case the number of workers exceeds 1,000, the wages shall be
paid before the expiry of the 10th of the following wage-period. In
the case of persons employed on a dock, wharf or jetty or in a mine, the
balance of wages due on completion of the final tonnage account of the ship or
wagons, loaded or unloaded, as the case may be, shall be paid before the expiry
of the 7th day from the day of such completion.
(ii)
Wages in case of termination of employment :-
Where the employment of any person
is terminated by or on behalf of the employer, the wages earned by him shall be
paid before the expiry of the 2nd working day from the day on which
his employment is terminated. Where the employment of any person in an
establishment is terminated due to the closure of the establishment for any
reason other than a weekly or other recognised holiday, the wages earned by him shall be paid before the expiry of the 2nd
day from the day on which his employment is so terminated.
(iii)
Exemption :-
The State Government may, by general
or special order, exempt the person responsible for the payment of wages from
the operation of the above provisions in certain cases.
(iv)
Wages to be paid on a working day :-
All payment of wages shall be made
on a working day.
(b)
Evolution of concept
of wages in
India.
— In
the earlier days,
the imposition of
fine was a
fairly general practice
in perennial factories
and railways. There
used to be
other deductions from
the wages paid
to the workers,
such as for
medical treatment, education,
interest on advances
of the workers’
own wages, charities,
and religious purposes
selected by the
employer. An important
feature which added
to the embarrassment of
the workers at
various places was
comparatively the longer
period in respect
of which wages
were paid. There
was no uniformity
in the payment
of wages. Long
intervals between wage
payments invariability added
to the in
convenience of the
workers.
—
The
Royal Commission on
Labour in its
report (1931) recommended,
among other things,
that legislation on
deduction from wages
and fines was
necessary and desirable.
The commission examined
the delays in
the payment of
wages and the
practice of deductions
from the wages
of an employed
person. In the
light of its
recommendations, the Government
of India introduced
a Bill seeking
to regular the
delays and deduction
in the payment
of wages to
industrial and plantation
labour. The Bill
was passed in
1936 and the
Act came into
force from 28th March,
1937. In exercise
of the powers
conferred under the
Act, the Maharashtra
Government framed rules
known as the
Maharashtra Payment of Wages
Rules,1936.
—
The
Act is in
three parts. Part
I deals with
the regular and
payment of wages
by the employer.
Part 2 specifies
the heads under
which deduction can
be made from
wages. Part 3
provides a machinery
for enforcing specific
claim arising out
of delayed payments,
deduction from wages,
appeals, etc. It
is a self – contained Act
and provides its
own machinery for
the disposal of the claims.
The Act contains
26 sections.
(a) What are
the rules for payment of Wages ?
‘wages’ means all
remuneration due to any worker or employee if the terms of contract of
employment are fulfilled. [Sec. 2(6)
of the payment of
wages Act, 1936 ]
The
payment of wages
Act, 1936 give
some Rules for
payment of wages
are given below :
1)
Responsibility for Payment of Wages (Sec.3) :-
Every employer shall be responsible
for the payment to persons employed by him of all wages required to be paid
under the Payment of Wages Act. But in the case of persons employed (otherwise
than by a contractor) in factories, industrial establishment or upon railway,
the following persons shall also be responsible for the payment of wages:
(a) In factories, the person
named as the manager;
(b)
In industrial or other establishment, the person, if any, who is responsible to
the employer for the supervision and control of the industrial or other
establishment;
(c)
Upon railways (otherwise than in factories), the person nominated by the
railway administration in this behalf for the local area concerned (Sec. 3)
2)
Fixation of Wage-Periods (Sec.4) :-
Every person responsible for the
payment of wages shall fix periods, known as wage-periods, in respect of which
such wages shall be payable. A wage-period shall not exceed one month.
3)
Time of Wage-Periods (Sec. 5) :-
(i) Wages to be paid before 7th or
10th day :-
The wages of every person employed
upon or in any railway, factory or industrial or other establishment upon or in
which less than 1,000 persons are employed, shall be paid before the expiry of
7th day of the following wage-period. In case the number of workers
exceeds 1,000, the wages shall be paid before the expiry of the 10th
of the following wage-period. In the case of persons employed on a dock, wharf
or jetty or in a mine, the balance of wages due on completion of the final
tonnage account of the ship or wagons, loaded or unloaded, as the case may be,
shall be paid before the expiry of the 7th day from the day of such
completion.
(ii) Wages in case of termination of
employment :-
Where the employment of any person
is terminated by or on behalf of the employer, the wages earned by him shall be
paid before the expiry of the 2nd working day from the day on which
his employment is terminated. Where the employment of any person in an establishment
is terminated due to the closure of the establishment for any reason other than
a weekly or other recognised holiday, the wages
earned by him shall be paid
before the expiry of the 2nd day from the day on which his
employment is so terminated.
(iii)
Exemption :-
The State Government may, by general
or special order, exempt the person responsible for the payment of wages from
the operation of the above provisions in certain cases.
(iv)
Wages to be paid on a working day :-
All payment of wages shall be made
on a working day.
4)
Medium of payment of wages (Sec. 6) :-
All wages shall be paid in current coins or
currency notes or both. Payment of wages in kind is not permitted. The process
of payment of wages in cash is very cumbersome where the number of workers is
very large. It is also risky where the sum involved is large and the factory or
industrial establishment is situated at a remote place. In order to obviate
these difficulties and save the worker from carrying cash on the pay day and
mis-spending it, the employer may after
obtaining the written authorisation of the employed person, pay him the wages
either by cheque or by crediting the wages in his bank account.
(b) What
are the deductions
that can be
made from wages
of employed persons
as states in
the payment of
wages act 1936?
Deduction which may be
made from wages (Sec. 7) :-
The wages of an employed person shall be paid to him without
deductions of any kind except those authorized by or under the Payment of Wages
Act, 1936. the deductions from wages of
an employed person may be of the following kinds only, namely;
- Deductions for fines
- Deductions for absence from duty.
- Deductions for damage or loss.
- Deductions for house accommodation
- Deductions for amenities and services.
- Deductions for recovery of advances or for adjustment of over payment of wages.
- Deduction for recovery of loans made for the welfare of labour.
- Deductions for recovery of loans granted for house building.
- Deductions for payment of co-operative societies & insurance schemes.
- Deductions of income tax.
- Deductions made under orders of court.
- Deduction for contributions to provident fund.
- Deduction for constitutions of a welfare fund for the employed persons & their family members.
- Deduction in respect of fees payable for the membership of trade union.
- Deductions for payment of insurance premia on fidelity guarantee bonds.
- Deductions for recovery of losses sustained by railway administration.
- Deduction for contributions to the prime minister’s national relief fund.
- Deduction for contributions to any insurance schemes.
1) Deductions for fines:-
(b)
The notice specifying the acts and omissions for which fines may be imposed
shall be exhibited in the prescribed manner on the premises (and in case of
persons employed upon a railway, at the prescribed place or places) in which
the employment is carried on.
(c)
No fine shall be imposed on an employed person until he has been given an opportunity
of showing cause against the fine and has completed the age of 15 years.
(d)
The total amount of fine which may be imposed in one wage period on any
employed person shall not exceed 3 per cent of the wages payable to him in
respect of that wage-period. Such a fine shall not be recovered from the
employed person by installments or after the expiry of 60 days from the day on
which it was imposed [ Sec. 8(6) ]
2)
Deductions for absence from duty:-
Deduction may be made on account of the
absence of an employed person from duty from the place or places where, by the
terms of his employment, he is required to work. But the ratio between the amount of such
deductions
and the wages payable shall not exceed the
ratio between the period of absence and total period within such wage-period.
It has however been held in K.S.R.T. Employees’ Assn. Vs General Manager,
K.S.R.T., (1985) that in a strike by workers in a public utility service like
transport service, if employees absent for a part of the day without notice,
deduction of full day’s wages would not be unjustified or illegal.
3)
Deductions for Damage or Loss:-
A deduction for damage to or loss of
goods expressly entrusted to the employed person for custody or for loss of
money for which he is required to accounts shall not exceed
the
amount of the damage or loss caused to the
employer by the neglect or default of the employed person. Same is the case as
regards losses sustained by a railway administration on account of any rebates
or refunds incorrectly granted by the employed person.
4)
Deductions for services:-
A deduction for house accommodation
and such amenities and services supplied by the employer as have been
authorised by the State Government shall not be made from the wages of an
employed person, unless such services have
been accepted by him as a term of
employment or otherwise. Deductions in
respect of these services shall not exceed the value thereof. In case of
deductions as regards services and amenities, the State Government may impose
conditions.
5)
Deductions for recovery of advances:-
A deduction for recovery of an advance
given to an employed person is subject to the following conditions viz., (i)
recovery of an advance of money given before employment began shall be made
from the first payment of wages in
respect of complete wage-period, but no recovery can be made of such advance
given for travelling expenses:
(ii) recovery of an advance of money given after employment began shall
be subject to such conditions as the State Government may impose: (iii) recovery
of advances of wages not already earned shall be subject to any rules may by
the State Government in this regard. The State Government may regulate the
extent to which such advances may be given and the installments by which they
may be recovered.
6)
Deductions for recovery of loans:-
Deductions for loans granted for
house-building or other purposes and the
interest due in respect thereof approved by the State Government shall be
subject to any rules made by the State Government regulating the extent to
which such loans may be granted and the rate of interest payable thereon.
7)
Deductions for payments to co-operative societies and insurance Schemes:-
These deductions shall include (a) deductions
for payments to co-operative societies approved by the State Government or to a
scheme of insurance maintained by the Indian Post Office; and (b) deductions
made with the written authrisation of the person employed for the payment of
any premium of his life insurance policy to the Life Insurance Corporation
(LIC) of India or for the purchase of securities of the Government of India or
of any State Government or for being
deposited in any Post Office Saving Bank in furtherance of any saving scheme of
any such Government.
8)
Other Deductions:-
The following deductions shall also be
permitted under the Act: (a) deductions of income-tax payable by the
employed person. (b) deductions required to be made by order of a Court
or other authority competent to make such order [Sec. 7 (2) (h)] (c) deductions for contributions to any
insurance scheme framed by the Central Government for the benefit of its
employees.
Bibliography
1. Legal system in business (Business Law , Company Law, Industrial
Law )
By :- P. saravanavel
S. sumathi
Himalaya
Publishing House
2.Industrial
Jurisprudence and Labour Legislation
By :- A.M. Sarma
Himalaya Publishing House
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