Payment of wages Act, 1936

INTRODUCTION

In a country where even living wages are not paid to workers, the need to protect the wages earned by them can hardly be over-emphasized. Before the payment of Wages Act, 1936 was passed, evil of withholding wages, delay in paying wages and making unreasonable deduction out of wages were quit prevalent.

The Payment of Wages Act, 1936 was passed to regulate the payment of wages to certain classes of persons employed in industry.

DEFINITIONS

Employed Person

"Employed Person" includes the legal representative of a deceased employed person.

Ÿ EMPLOYER

"Employer" includes the legal representative of a deceased employer.

Ÿ FACTORY

Factory means a factory as defined in Section 2(m) of the Factories Act, 1948 and includes any place to which the provisions of that Act have been applied.

Ÿ INDUSTRIAL OR OTHER ESTABLISHMENT

It means any-

(a)  Tramway service or motor transport service engaged in carrying passenger or goods or both for hire or reward;

(b) Air transport service other than such service belonging to or exclusively employed in the military, naval or air force of the union or the Civil Aviation Department of the Government of India;

(c) Dock, wharf or jetty;

(d) Inland vessel mechanically propelled;

(e) Mine, quarry or oil-field;

(f) Plantation;

(g) Workshop or other establishment in which articles are produced, adapted or manufactured, with a view to their use, transport or sale;

(h) Establishment in which any work relating to the construction, development or maintenance of building, roads, bridges or canals or relating to operations connected with navigation, irrigation, or supply of water or relating to transmission or distribution of electricity or any other form of power is being carried on;

(i) Any other establishment or classes of establishment which the Central Government or State Government may, having regard to the nature thereof, the need for population of persons employed therein and other relevant circumstances specify, by notification in the Official Gazette.

Ÿ WAGES

"Wages" means all remuneration (whether in the form of salary, allowance or otherwise) expressed in the terms of money or capable of being so expressed which would, in the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect to his employment or work done in such employment and includes:-

(a) Any remuneration payable under any reward or settlement between the parties or order of the court;

(b) Any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period;

(c) Any additional remuneration payable under the term of employment (whether called a bonus or by any other name);

(d) Any sum which by reasons of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum, whether with or without dedications, but does not provide for the time within which the payment is to be made;

(e) Any sum for which the person employed is entitled under any scheme framed under any law for the time being in force;

But does not include-

(1) Any bonus which does not for part of remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a Court;

(2) The value of any house accommodation supply of electricity, water, medical attendance or any other amenity or of any service excluded by general or special order of the State Government;

(3) Any contribution paid by the employer to any pension or provident fund and the internet which may have accrued thereon;

(4) Any traveling allowance or the value of any travelling concession;

(5) Any sum paid to the employed person to defray the special expenses entailed on him by the nature of his employment;

(6) Any gratuity payable on the termination of employment.

RESPONSIBILITY FOR PAYMENT OF WAGES

Every employer responsible for the payment to the persons employed by him of all wages required to be paid under the Payment of Wages Act. But in case of persons employed in Factories, Industrial establishments or upon railways, the following persons shall also be responsible:-

(a) In factories person named as the manager;

(b) In industrial or other establishments, the person, if any, who is responsible to the employer for supervision or control of such establishment;

(c) Upon railways the person nominated by the railway administration in this behalf

FIXATION OF WAGE PERIODS

Act provides for fixation of wage periods by every person responsible for payment of wages, such wage period shall not exceed One Month.

TIME OF PAYMENT OF WAGES

The rules relating to time of payment of wages are as follows:-

(1) Wages of every person employed in any Railway, factory or industrial or other establishment in which less than 1000 persons are employed shall  paid before the expiry of 7^th day of the following wage period (10^th  if 1000 or more person or workers employed);

(2) Where the employment of any person is terminated by the employer, the wages earn by him shall be paid before the expiry of 2^nd  working day from the day on which his employment is terminated;

(3) The State government may exempt the person responsible for the payment of wages from the operation of the above provisions in certain cases;

(4) All payment of wages shall be made on a working day.

MEDIUM OF PAYMENT OF WAGE

All wages shall be paid in current coin or currency notes or both. However, the employer may after obtaining the written permission of the employed person pay him the wages either by cheque or by crediting the wages in his bank account.

DEDICATION FROM WAGES

Section 7 of the Act allows deductions from the wages of the employee on account of only the following:-

(1) Fines;

(2) Absence from duty;

(3) Damage to loss of goods expressly entrusted to the employee;

(4) Housing accommodation and amenities provided by the employer;

(5) Recovery of advance or adjustment of over payment of wages;

(6) Recovery of loans made from any fund constituted for the welfare of the labour and interest due on their on;

(7) Subscription to and for repayment of any advance from the provident fund;

(8) Income tax;

(9) Payment to co-operative societies approved by State government or to a scheme of insurance maintained by the Indian post office;

(10) Deduction made with the written authorization of the employee for the payment of any life insurance policy premium or purchase of securities.

MAINTENANCE OF REGISTERS AND RECORDS

Every employer and maintain registers and records in the prescribed form giving the following particulars of the persons employed by him:-

(a) The work performed by them;

(b) The wages paid to them;

(c) The deductions made from their wages;

(d) The receipt given by them;

The registers and records shall be preserved for a period of 3 years from the date of Last entry made therein.