12/29/2016 Govt eyes mandatory cashless payments of wages in some sectors - Livemint

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Govt eyes mandatory cashless payments of wages in some

sectors
The Payment of Wages (Amendment) Bill 2016 comes in the wake of measures taken by the government post
demonetisation to move toward a cashless economy

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Kritika Singh

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12/29/2016 Govt eyes mandatory cashless payments of wages in some sectors - Livemint

The Bill was introduced by union labour minister Bandaru Dattatreya amid din over demonetisation issue. Photo: Mint

New Delhi: A bill empowering the government to make it mandatory for employers of certain business and
industrial establishments to pay salaries through cheques or by transfers to employees bank accounts was tabled
in the Lok Sabha on Thursday.

The Payment of Wages (Amendment) Bill 2016 comes in the wake of measures taken by the government post
demonetisation to move toward a cashless economy.

However, with the winter session of Parliament ending on Friday, the bill can only be discussed and voted upon in
the 2017 budget session at the earliest.

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12/29/2016 Govt eyes mandatory cashless payments of wages in some sectors - Livemint

The bill was introduced by labour minister Bandaru Dattatreya and seeks to amend certain sections of the Payment
of Wages Act, 1936 which allowed the option of wages to be paid in coins, currency notes, cheques or by electronic
mode.

However, once passed by Parliament, the law will give the central and state governments the power to make it
mandatory for employers to pay wages only through cheques or by crediting bank accounts.

Although the bill does not mention any specic sectors, C.K. Sajinarayanan, president of trade union Bharatiya
Mazdoor Sangh, said these included construction, textiles and some state-run companies.

Last month, the labour ministry in collaboration with the ministry of nance launched a campaign to open bank
accounts for workers in both organized and unorganized sectors, who did not have a bank account. Having
organized more than 75,000 campaigns nationwide, the labour ministry had opened over 2.4 million bank accounts
for workers till 14 December, the ministry said.

The move sets up the infrastructure needed to allow payment of wages to employees bank accounts.

The governments demonetisation move has had a signicant impact on cash-based industries or businesses. The
inability of employers to pay timely salary had hit daily wage labourers and contract workers in particular. Often
these workers had to forego their daily wages because they had to stand in long queues at banks and ATMs to
transfer money to their families. As a result, many workers engaged in cash-based industries have migrated back to
their home towns and cities in search of work.

The payment of wages through cheque or crediting it in the bank account of employed persons will reduce the
complaints regarding non-payment or less payment of minimum wages, besides serving the objectives of digital
and less cash economy, the bill states.

The governments of Andhra Pradesh, Uttarakhand, Punjab, Kerala and Haryana have already legislated such
provisions by making amendments to their laws.

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12/29/2016 Govt eyes mandatory cashless payments of wages in some sectors - Livemint

The digitalization of payments will formalize the payment of minimum wages, which will increase the standard of
living of the workers, said Sajinarayanan. He added that cashless payment of wages will also resolve the problem
of intermediaries for contract workers, removing the scope for corruption.

Sajinarayanan said linking bank accounts to Aadhaar numbers will make it easier to verify whether or not
employees are being paid minimum wages. Some employers are maintaining payment records on statutory wage
registers but do not actually make the payments. Sajinarayanan said that such practices happen for both
permanent and daily wage labourers. The proposed bill will remove this drawback.

Kritika Singh

TOPICS: CASHLESS PAYMENT SALARIES PAYMENT OF WAGES BILL DEMONETISATION LOK SABHA

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