PAYMENT OF WAGES ACT, 1936

In 1926, the Government of India addressed local Governments with a view to ascertain the position with regard to the delays which occurred in the payment of wages to persons employed in industry, and the practice of imposing fines on them. The investigations revealed the existence of abuses in both directions and the material collected was placed before the Royal Commission on Labour which was appointed in 1929. The Commission collected further evidence on the subject and the results of their examination with their recommendations will be found on pages 216-221 and 236-241 of their report.

The Government of India re- examined the subject in the light of the Commission's Report and in February, 1933 a Bill embodying the conclusions then reached was introduced and circulated for the purpose of eliciting opinion. A motion for the reference of the Bill to a Select Committee was tabled during the Delhi session of 1933-34, but was not reached, and the Bill lapsed. The present Bill is based upon the same principles as the original but has been revised throughout in the light of the criticisms received when the original Bill was circulated.

Applicability

1. It applies in the first instance to the payment of wages to persons employed in any factory, to persons employed (otherwise than in a factory) upon any railway by a railway administration or either directly or through a sub-contractor, by a person fulfilling a contract with a railway administration and to persons employed in an industrial or other establishment.

2. It applies to wages payable to an employed person in respect of a wage period if such wages for that wage period do not exceed Rupees Twenty Four Thousand per month or such other higher sum which, on the basis of figures of the Consumer Expenditure Survey published by the National Sample Survey Organization, the Central Government may, after every five years, by notification in the Official Gazette, specify.

Benefits Under The Act

The Act provides for regular and timely payment of wages on or before the expiry of 7th day of every month in cases of establishments employing less than 1,000 employees and on or before the expiry of 10th day of every month in cases of establishments with greater than 1000 employees. It also provides for prevention of unauthorised deductions being made from wages and charges of arbitrary fines.

Other Important Issues

1. Wages are required to be paid in current coin or currency notes or in both but not in kind. The written authorisation of an employee is necessary for payment by Cheque/credit to Bank A/c.

2. The total deductions cannot exceed 75% of wages for payment to Co-op. societies and 50% in other cases.

3. Every employer is required to maintain registers/records in Form No. I, II, III, IV to be kept for 3 years from last entry.

4. Every employer is required to file Annual Return in Form V regarding persons drawing gross wages below Rs. 24,000/- p.m.

5. The nomination facility has been extended to all the eligible employees by filing a declaration in Form-I to receive the wages standing to his credit at the time of his death.