Paymentof_WagesAct

8/13/2019 Paymentof_WagesAct

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The Payment of Wages Act, 1936

Purpose: To regulate payment of wages, disbursement of wages within the prescribed

time limit and without any deduction except those authorized by law. Came into effect

from 23-- !"3#.

Scope and coverage - $ayment of wages to persons:

a% employed in any factory,

b% employed upon any railway by a railway administration or, either directly or

through a subcontractor,

c% employed in an industrial or other specified establishments.

d% Tramway ser&ice or motor transport ser&ice engaged in carrying passengers or

goods by road.

e% 'ir transport ser&ices other than exclusi&ely employed in the military, na&al or airforce.

f% (oc), *ine, +uarry, or oil field, plantation

g% stablishment in which any wor) relating to the construction, de&elopment or

maintenance of buildings, roads, bridges or canals, irrigation, water supply etc.

h% 'ny other establishment which the central go&ernment or state go&ernment

need to protect the interest of employed persons.

*aharashtra: stablishments co&ered by the ombay hops / stablishments 'ct.

Obect!ves - 0a% To ensure regular and prompt payment of wages to certa!n c"ass of

persons1

b% (isbursement of wages within the prescribed time limit1 and

c% To pre&ent the exploitation of a wage earner by prohibiting arbitrary

fines and deductions from his wages.

Thus the obect is 0i% to a&oid unnecessary delay in payment of wages1 and

0ii% to pre&ent unauthorized deductions.

ec. !0#%: The 'ct shall apply only when average month"y #ages are "ess than $s%

1&,'''(-%


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WA)*S+ec. 204%: all remuneration5 expressed in terms of money or capable of

being expressed in terms of money payable to an employed person.

Wages !nc"ude:

a% 'ny remuneration payable under any award or settlement or order of a court.

b% 6emuneration for o&ertime wor) or holidays or any lea&e period.

c% 'ny additional remuneration 0incenti&es etc.%

d% 'ny sum payable under a contract or otherwise upon termination of employment 0but

not a retirement benefit%.

e% 'ny sum payable under any scheme in force.

Wages do not !nc"ude:

!% 'ny bonus, not forming part of remuneration payable under the terms of

employment, any award, or settlement or order of a court.2% alue of any house accommodation, light, water etc.

3% Contribution by employer to any pension or pro&ident fund and the interest thereon.

% 'ny tra&eling allowance or concession

7% 'ny sum paid towards expenses necessitated by employment

#% 'ny gratuity payable on termination of employment.

Prov!s!ons for Payment of Wages: 0ec. 3 to #%:

8ho is responsible for payment: . 3: mployer, his representati&e, manager of the

factory 5person who employs.

Wage Per!od: . : $eriod in respect of which wages shall be payable. 9o wage period

shall exceed one month in any case.

T!me of Payment: . 7: 0!% 0a% where less than ! persons employed ; before the

expiry of the


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aharashtra ot!f!cat!on dated 1&th.ecember, /'1'+

'll wages payable to the employed persons 0in continuous ser&ice as per 4ndustrial

(isputes 'ct% and are drawing wages of 6s. 3=- per month or more, except

agricultural and sugarcane cutting labourers, shall be paid either by an account payee

che+ue drawn in fa&our of the employed persons or by crediting the wages in his=her

ban) account.

>urther, the limit of 6s. 3,=- is not applicable to the employed persons in the area of

Thane district.

.educt!on from Wages: 0ec. < to !3%: 'n employed person entitled to recei&e wages

without deduction except authorized under the 'ct. 8ithholding of increment or

promotion, stoppage of increment, reduction to a lower post and suspension, if as per

the rules, shall not amount to deduction. >ollowing )inds of deductions are permitted:

a% fines1

b% deductions for absence from duty1

c% deductions for damage to or loss of goods or money of the employer, if such

damage or loss is due to his neglect or default.

d% deductions for house accommodation made a&ailable by the employer, go&ernment

or any housing board.e% deductions for amenities and ser&ices supplied by the employer

f% deductions for reco&ery of ad&ances and interest due thereon or adustments of o&er

payment of wages

g% deductions for reco&ery of loans from any fund constituted for the welfare of labour

and interest due thereon

h% deductions for reco&ery of loans granted for house building etc.

i% deductions for income tax payable by the employed person

% deductions, under the order of the court or other authority

)% deductions for payment to cooperati&e societies etc.

l% deductions, with the written authorization of the employed person: 0a% for life

insurance premium, 0b% for purchase of ?o&t. securities, 0c% deposits in post office

sa&ings a=c, 0d% contribution to a Trade @nion.


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There are also certain deductions peculiar to railways... deductions for reco&ery of

losses sustained on account of certain omissions and commissions, due to the neglect

or default of the employee.

Tota" amount of deduct!ons !n any #age per!od ... shall not exceed ine not to be reco&ered by installments and shall be reco&ered within " days.

#% Total amount of fine in one wage period shall not exceed 3A of the wages for that

period.


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*mp"oyer2s "!ab!"!ty upon death of an emp"oyed person+ 4n case of death of an

employed person or in case his=her whereabouts are un)nown, all amount payable to

him as wages shall either be paid to the nominee or shall be deposited with the

prescribed authority u=s. 27, whereupon employer shall be discharged of his liability to

pay the wages.

nspectors+4nspectors under the >actories 'ct5 tate ?o&t. is authorizes to appoint

other inspectors under the 'ct. 'n 4nspector is entrusted with the authority to ascertain

whether the pro&isions of the 'ct and the 6ules are properly implemented or not. They

ha&e wide powers... employer to afford all reasonable facilities...

@nder ec. !7, the tate ?o&t. may appoint a competent person to be the 'uthority to

hear and decide all claims arising out of the deductions from wages or delay in payment

of wages etc. The aggrie&ed person may submit an application within !2 months.

'ppeal against the order lies to the Court of mall Causes or the (istrict Court.

ec. 2: $enalty for offences ranges from 6s. 2=- to 6s. 3=-.

ec. 23: any agreement whereby an employed person relin+uishes his rights under the

'ct, such an agreement shall be &oid.

Ob"!gat!ons of *mp"oyer under the Act

o To pay wages to the persons employed by him.

o To fix wage periods and this shall not exceed one month.

o

To pay wages before the expiry of

Documents

Paymentof_WagesAct