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Payment Of Wages Act-1936

Object

The Payment of Wages Act regulates the payment of wages to certain classes of
persons employed in industry. The Act guarantees payment of wages in time and
without any deductions except those authorized under the Act. The Act provides
for the responsibility for payment of wages, fixation of wage period ,time and
mode of payment of wages, permissible deduction. It also casts upon the
employer a duty to seek the approval of the Government for the acts & omissions
for which fines may be imposed by him and also ceiling upto which the fines can
be imposed.

Applicability of the Act

The Act applies to every establishment within the meaning of industrial


establishment or other establishment as defined under the Act.The Act does not
apply to those employees whose average wages exceed Rs.1600/- per month .
(section-1(6))

Enforcement Machinery

Labour Officers-cum-Conciliation Officers have been appointed as Authority'


under the Act. within their respective jurisdiction in the State. An appeal against
an order or direction of the Authority may be preferred within 30 days of the date
on which theorder or direction was made before the District court by the
aggrieved party. All the Officers/Labour Inspectors of the Labour Department
have been declared as 'Inspector' to monitor the provisions of the Act. (section-
14&15).

What should a Factory Owner/Worker know about the Act

Every employer shall be responsible for the payment to persons employed by him
of all kind of wages required to be paid under the Act. (section-3)

Wages must be paid before the expiry of the 7th day after the last day of the wage
period, if less than 1000 workmen are employed and in other case on the 10th
day. (section-5)
Wages must be paid in current coin or currency notes and by cheque or by
crediting the wages in the employee's bank account after obtaining his written
authorization.(section-6)

Wages must be paid on a working day. (section-5)

To the person whose employment is terminated,

wages must be paid before the expiry of the second day. (section-5)

The paymaster shall display in a conspicuous place at or near the main entrance
of the factory a notice, in English and in the language of the majority of the
person employed therein showing the days on which wages are to be paid.(Rule-
8)

No wage period should exceed one-month. (section-4)

Deduction from Wages

No deductions shall be made from wage except those authorized under the Act.
(section-7)

MAINLY THE FOLLOWING DEDUCTIONS ARE PERMITTED. (section-7)

1.FINES

a) An employed person can be fined only for acts and omissions which are
specified in a list which is approved by the State Government or the prescribed
authority.(section-8)

b) Before the fine is imposed on an employed person , he must be given an


opportunity for explanation. (section-8)

c) Fines should not exceed 3% of the wages in a month. (section-8)

d) Fines shall not be recovered by installment or later than 60 days of the date of
imposition. (section-8)

e) The paymaster shall maintain a register of Wages, Fines, Damages, Deductions


and Advances in Form VI(PW) (Rule 3,4 &17 )

2. Deductions(section-9 to13)

i) Deductions for the absence from duty.


ii) Deductions for damages to or loss of goods expressly
entrusted to the employed person for custody ,or for loss
of money for which he is required to account, where such
damage or loss is directly attributed to his negligence or
default.

iii) Deductions for house accommodation.

iv) Deduction for amenities as authorized by the Govt.

v) Deduction for recovery of advances and interest, and for


adjustment of over payment of wages.

vi) Deductions for recovery of loans from any fund constituted for
the welfare of labour approved by state Govt.

vii) Deductions for recovery of loans for house building or for


purpose approved by Govt.

viii) Deduction for income-tax.

ix) Deduction on orders of a court or other authority.

x) Deductions for subscription and repayment of advance from


any provident fund.

xi) Deduction for payments to cooperative sectors.

xii) Deduction of premium for LIC policy or for post office saving
scheme on written authorization of the employed person.

xiii) Deduction for contribution to any fund constituted by the


employed or trade union for welfare of employed person
with the approval of state govt.

xiv) Deduction for payment of membership fee of trade union with


written authorization of employed person.

xv) Deduction for contribution to Prime Ministers' National Relief Fund or to such
other fund as notified by Central Govt. with the written authorization of the
employed person

Total amount of deductions should not exceed 75% of wages of the employed
person in any wage period if whole or part of the deduction are meant for
payment to cooperative societies.
In other cases it should not exceed 50%.

Law does not allow an employer to make any type of deduction out of the wages
of a worker except those authorized by this Act.

a)The advance may be recovered in installment by deductions from wages


spread over not more than twelve months. No installment shall exceed
one third or where the wages for any wage period are not more than 20
rupees ¼of the wages for the wage period in respect of which
deduction is made.

(b)Recovery of advances of wages or loans or payment to cooperative


societies and insurance scheme shall be subject to any rules/conditions
of the State Govt.

Every employer should maintain registers i.e. register of wages in prescribed


form.

The registers should be preserved for a period of 3 years after the date of last
entry made therein.

Claims
Claims arising out of deductions from wages or delay in payment of wages
&penalty for malicious claims will be heard and decided by the Labour officer
cum conciliation officer as the Authority declared by the state Govt. for their
specified area.
Employees of the same unpaid group may file joint application for realization of
the dues & compensation.
Application for claims out of deductions from wages or delay in payment of wages
and penalty for malicious or vexatious claims shall be made in duplicate in
FORM-A(PW) , FORM-B(PW) or FORM-C(PW) individual,
group or an Inspector respectively.
The authorization to act on behalf of an employed person shall be given to Form-
D .

Appeal(section-17)

An appeal against an order or a direction shall be preferred in duplicate in the


form of a memorandum. within 30 days to the District-Court.

An appeal/memorandum having concisely the grounds of objections shall be


accompanied by a certified copy of the order.

One copy of a memorandum shall bear the prescribed court-fee.


Every employer shall afford facilities to 'Inspectors' for entry , inspection,
supervision, examination, or inquiry under the Act.

The abstract of the Act and the Rules framed thereunder should be displayed in
English and in a language understood by the majority of workmen in FORM-V.

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