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THE PAYMENT OF WAGES ACT

1936

OBJECTS
1. Before the wages act was passed delays in
paying wages & making
unreasonable deduction out of wages were
quite prevalent
2. The Payment of Wages Act, 1936 was
passed to regulate the payment of wages to
certain classes of persons employed in
industry

Cont
3. It benefits industrial employees & safeguard
their interest
4. It ensures regular payment of wages without
unauthorized deductions

RULES FOR PAYMENT OF WAGES


(SEC 3 TO SEC 6)
Sec 3 - Responsibility for Payment of
Wages
Every employer responsible for the
payment to persons employed by him of
all wages required to be paid under the
Payment of Wages Act

Cont.
Sec 4 Fixation of Wage Periods
Employer shall fix periods known as wage
period. The wage period may be daily,
weekly, monthly.
A wage period shall no exceed one month

Cont.

Sec 5 Time of Payments of Wages


The rules relating to time of payment of
wages are as follows: 1. Wages to be paid before 7th or 10th day
- less than 1000 employees bef 7th day
- more than 1000 employees bef 10th day

Cont.
2. Wages incase of termination of
employment
- Bef expiry of 2nd day of termination

If the due date of payment of wages


falls on a holiday, wages should be
paid on the earlier day

Cont
Sec 6 Medium of payment of wages
-

Wages shall be paid in cash

Wages can be paid either in cheque or


credited to bank a/c

DEDUCTIONS FROM WAGES


SEC 7 TO SEC 13
Sec 7 & Sec 8 Deductions for Fines
- No fine shall be imposed without the
previous approval of App Govt
- The notice specifying the acts for fines
shall be in the prescribed manner
- No fine shall be imposed until employee
has been given an opportunity of showing
cause against the fine

Cont
- The total amount of fine shall not exceed
3% of wages
- Fine shall not be recovered in installments
or after expiry of 90 days
- Register shall be maintained for collection
of fines

Cont
Sec 9 Deductions for absence from
duty
- If without the prior notice or without
reasonable cause, if employee remains
absent his deductions should not exceed
his wages for 8 days

Cont
Sec 10 Deduction for damage or loss
- Deduction for loss of goods or money for which
the employed person is entrusted or given
custody should not exceed amount caused to
the employer
- Employee should be given an opportunity of
showing cause against the deduction

Cont
Sec 11 Deduction for Services
- Services provided to the employee shall
not be deducted from wages unless such
services are accepted by him.
{App Govt shall impose conditions for
deductions}

Cont
Sec 12 Deductions for recovery of
advances or loans [12 A]
- Recovery of advances including advances
for TA, interest on advances &
adjustments for over payment of wages
- Recovery of loans given from authorized
welfare fund

Cont

- Recovery of loans given for building house


for any purpose approved by State Govt &
interest on loans

Cont
Sec 13 Deductions for payments to cooperative societies & Insurance
Schemes
- Deductions should be made with the
written authorization of the person
employed
- Deductions shall not exceed 75% of the
wages

MAINTAINENANCE OF REGISTERS
& RECORDS
For the following particulars of the persons
employed by him
1. Work performed by the employer
2. Wages paid to them
3. Deductions made from their wages
Records & Registers shall be preserved
for period of 3 yrs

ENFORCEMENT OF ACT
INSPECTORS- SEC 14
To check & control the provisions of the
act, an inspector is appointed
Functions & Duties
1. To see whether the rules & provisions
are followed by the employer for which
he can make inquires & examinations as
he think

Cont
2. With the assistant of any he can
enter, inspect & search any premises
3. He can supervise the payment of
wages
4. He can inspect register or records

PENALTY FOR OFFENCES


SEC 20

1. Penalty for delaying payment


within prescribed period (or)
making unauthorized deductions
- Fine from Rs. 1500/- to Rs. 7500/2. Penalty for not paying wages on a
working day (or) in cash (or) for
not displaying notice
- Fine upto Rs. 3750/- for each
offence

Cont

3. Penalty for failure to maintain &


furnish records & registers
- For each offence punishable with fine
which shall not be less than
Rs. 200/- upto Rs. 1000/4. Penalty for not co-operating with
Inspector
- Fine not less than Rs. 1500/- upto
Rs. 7500/-

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