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By Group 14 : Akshita Mangal Ashwary Rastogi Deepali Gupta Srikant Raman Tanvi Sharma


The Payment of Wages Act, 1936 was enacted with a view to regulate the payment of wages to certain classes of persons employed in industry

OBJECTIVE: to ensure regular and prompt payment of wages to prevent exploitation of wage-earners by prohibiting arbitrary fines and deduction from wages


Payment of Wages Act, 1936 is a central legislation & extends to whole of India It applies to all persons employed, whether directly or through contractors, in a factory or certain specified industrial or other establishments Applicable on employees drawing wages upto 10,000/- per month


In case of factories, person named as manager under the provisions of Factories Act, 1948 In case of industrial or other establishments, person responsible for supervision and control of the industrial or other establishments In case of contractor, person designated by contractor

Positives of the Act

The regular and timely payment of wages (on or before 7th day or 10th day after last day of the wage period in respect of which the wages are payable) Preventing unauthorized deductions being made from wages and arbitrary fines. Penalty Provision - Penalties are from Rs.200-1000. Repeat offenses attract 1 to 6 months imprisonment and fine from Rs.500-3000. Delay wage payments attract penalty of Rs.100 per day of delay. Regulating the time frame of payment of wages i.e. daily, weekly, fortnightly and monthly but not more than that. Difference between fines and deductions is specifially noted in the act.


Indian economy is characterized by Dualism i.e. existence of both organized and unorganized sector. 94% of the total workforce belongs to unorganized sector and they contribute to 60% to Indias GDP growth. A number of such employees are not covered under the Payment of Wages Act. Agriculture not covered. Small establishments and very small establishments are exempted from submitting returns and maintaining registers under the this act. Over the years, it has been noticed that certain provisions of the Act have been differently interpreted thus leading to administrative difficulties in implementing the same. In order to remove ambiguities, appropriate changes are being proposed in sections 3, 7, 8 and 15 of the Act which respectively deal with responsibility for payment of wages, deductions from wages fines and claims in certain cases.

In 2012, based on the figures of the Consumer Expenditure Survey the wage ceiling for this act was raised to Rs.18,000 Earlier non payment of wages was a major reason for Strikes and Lockouts which resulted in loss of productivity Under the Payment of Wages Act Section 33 (c) (2), the power that has been given to the Labor Court is extremely limited

Issues in the Policy

Ambiguities in deductions



Current Situation.

Payment in kind reducing. (only kind may be very rare) combination of cash and kind. Organized sector moving into Commercial Bank linked transactions. (ATMs/Cheque). Non-payment of wages still a cause for industrial dispute in organized sector. Non-payment of wages dealt as police complaint (criminal offence) in unorganized sector. The limit for appeal to the appellate authority is thirty days and no further provision for condonation of delay in filing the appeal. The Cause effect relationship between payment of wages act and industrial dispute act make the situation more diverse and deviate the actual cause .Also it leaves many opportunities to manipuate the law according to the situation.

Every 3-5 years there should be a review of the wage ceiling taking inflation into consideration Payment of wages through cheque should be mandated National Commission on Rural Labour should be constituted and thereafter labour laws should be made applicable on agriculture workers Practice what you preach.Implementation is the key.