PAYMENT OF WAGES ACT 1936



PAYMENT OF WAGES ACT  1936

BY

SMART LEARNING WAY


Definition of Wages

(a) Wages :-

‘Wages’ means all remuneration (whether by way of salary, allowances  or otherwise)  expressed in terms of money or capable of being  so expressed which would, if the terms of employment, express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment. Simply  stated ‘wages’ means all remuneration due to any worker or employee if the terms of contract of employment are fulfilled. [Sec. 2(6)  of  the payment  of  wages  Act  1936 ]

(b)Wage-Period

Every person responsible for the payment of wages shall fix periods, known as wage-periods, in respect of which such wages shall be payable. A wage-period shall not exceed one month. (Sec 4.  of  the  payment  of  wages  act  1936)

(a)  Time  of  payment  of  wages.

Time  of  payment  of  wages  is  very  important  rule  for  payment  of  wages. Every  employees  would  like  to  obtain  their  wages  time  to  time. So.  Payment  of  wages  act  give  some  rules  for  payment  of  wages  in  some  fixed  time  are  given  below:

(i) Wages to be paid before 7th or 10th day :-

The wages of every person employed upon or in any railway, factory or industrial or other establishment upon or in which less than 1,000 persons are employed, shall be paid before the expiry of 7th day of the following wage-period. In case the number of workers exceeds 1,000, the wages shall be paid before the expiry of the 10th of the following wage-period. In the case of persons employed on a dock, wharf or jetty or in a mine, the balance of wages due on completion of the final tonnage account of the ship or wagons, loaded or unloaded, as the case may be, shall be paid before the expiry of the 7th day from the day of such completion.

(ii) Wages in case of termination of employment :-

           Where the employment of any person is terminated by or on behalf of the employer, the wages earned by him shall be paid before the expiry of the 2nd working day from the day on which his employment is terminated. Where the employment of any person in an establishment is terminated due to the closure of the establishment for any reason other than a weekly or other recognised holiday, the wages  earned by him shall  be paid before the expiry of the 2ndday from the day on which his employment is so terminated.

(iii) Exemption :-

          The State Government may, by general or special order, exempt the person responsible for the payment of wages from the operation of the above provisions in certain cases. 

(iv) Wages to be paid on a working day :-

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

(b)   Evolution  of  concept  of  wages  in  India.  

       In  the  earlier  days,  the  imposition   of  fine  was  a  fairly  general  practice  in  perennial  factories  and  railways.  There  used  to  be  other  deductions  from  the  wages  paid  to  the  workers,  such  as  for  medical  treatment,  education,  interest  on  advances  of  the  workers’  own  wages,  charities,  and  religious  purposes  selected  by  the  employer.  An  important  feature  which  added  to  the  embarrassment  of  the  workers  at  various  places   was  comparatively  the  longer  period  in  respect  of  which  wages  were  paid.  There  was  no  uniformity  in  the  payment  of  wages.  Long  intervals  between  wage  payments  invariability  added  to  the  in  convenience  of  the  workers.
   
     The  Royal  Commission  on  Labour  in  its  report  (1931)  recommended,  among  other  things,  that  legislation  on  deduction  from  wages  and  fines  was  necessary  and  desirable.  The  commission  examined  the  delays  in  the  payment  of  wages  and  the  practice  of  deductions  from  the  wages  of  an  employed  person.  In  the  light  of  its  recommendations,  the  Government  of  India  introduced  a  Bill  seeking  to  regular  the  delays  and  deduction  in  the  payment  of  wages  to  industrial  and  plantation  labour.  The  Bill  was  passed  in  1936  and  the  Act  came  into  force  from  28th  March,  1937.  In  exercise  of  the  powers  conferred  under  the  Act,  the  Maharashtra  Government  framed  rules  known  as  the  Maharashtra Payment  of  Wages  Rules,1936.
   
      The  Act  is  in  three  parts.  Part  I  deals  with  the  regular  and  payment  of  wages  by  the  employer.  Part  2  specifies   the  heads  under  which  deduction  can  be  made  from  wages.  Part  3  provides  a  machinery  for  enforcing  specific  claim  arising  out  of  delayed  payments,  deduction  from  wages,  appeals,  etc.  It  is  a  self – contained  Act  and  provides  its  own  machinery  for  the  disposal  of  the  claims.  The  Act  contains  26  sections.

(a) What  are  the  rules for payment of  Wages ?

     ‘wages’ means all remuneration due to any worker or employee if the terms of contract of employment are fulfilled. [Sec. 2(6)  of  the payment  of  wages  Act,  1936 ]
      The  payment  of  wages  Act,  1936  give  some  Rules  for  payment  of  wages  are  given  below :

1) Responsibility for Payment of Wages (Sec.3) :-

           Every employer shall be responsible for the payment to persons employed by him of all wages required to be paid under the Payment of Wages Act. But in the case of persons employed (otherwise than by a contractor) in factories, industrial establishment or upon railway, the following persons shall also be responsible for the payment of wages: 

 (a) In factories, the person named as the manager;
(b) In industrial or other establishment, the person, if any, who is responsible to the employer for the supervision and control of the industrial or other establishment;
(c) Upon railways (otherwise than in factories), the person nominated by the railway administration in this behalf for the local area concerned (Sec. 3)

2) Fixation of Wage-Periods (Sec.4) :-
            Every person responsible for the payment of wages shall fix periods, known as wage-periods, in respect of which such wages shall be payable. A wage-period shall not exceed one month.

3) Time of Wage-Periods (Sec. 5) :-

 (i) Wages to be paid before 7th or 10th day :-

           The wages of every person employed upon or in any railway, factory or industrial or other establishment upon or in which less than 1,000 persons are employed, shall be paid before the expiry of 7th day of the following wage-period. In case the number of workers exceeds 1,000, the wages shall be paid before the expiry of the 10thof the following wage-period. In the case of persons employed on a dock, wharf or jetty or in a mine, the balance of wages due on completion of the final tonnage account of the ship or wagons, loaded or unloaded, as the case may be, shall be paid before the expiry of the 7th day from the day of such completion.

  (ii) Wages in case of termination of employment :-

           Where the employment of any person is terminated by or on behalf of the employer, the wages earned by him shall be paid before the expiry of the 2nd working day from the day on which his employment is terminated. Where the employment of any person in an establishment is terminated due to the closure of the establishment for any reason other than a weekly or other recognised holiday, the wages  earned by him shall  be paid before the expiry of the 2nd day from the day on which his employment is so terminated.

(iii) Exemption :-

          The State Government may, by general or special order, exempt the person responsible for the payment of wages from the operation of the above provisions in certain cases. 

(iv) Wages to be paid on a working day :-

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

4) Medium of payment of wages (Sec. 6) :-

  All wages shall be paid in current coins or currency notes or both. Payment of wages in kind is not permitted. The process of payment of wages in cash is very cumbersome where the number of workers is very large. It is also risky where the sum involved is large and the factory or industrial establishment is situated at a remote place. In order to obviate these difficulties and save the worker from carrying cash on the pay day and mis-spending  it, the employer may after obtaining the written authorisation of the employed person, pay him the wages either by cheque or by crediting the wages in his bank account.

(b)  What  are  the  deductions  that  can  be  made  from  wages  of  employed  persons  as  states  in  the  payment  of  wages  act  1936?

 Deduction which may be made from wages (Sec. 7)  :-  

The wages of an employed person shall be paid to him without deductions of any kind except those authorized by or under the Payment of Wages Act, 1936.  the deductions from wages of an employed person may be of the following kinds only, namely;

  • Deductions for fines
  • Deductions for absence from duty.
  • Deductions for damage or loss.
  • Deductions for house accommodation
  • Deductions for amenities and services.
  • Deductions for recovery of advances or for adjustment of over payment of wages.
  • Deduction for recovery of loans made for the welfare of labour.
  • Deductions for recovery  of loans granted for house building.
  • Deductions for  payment of co-operative societies & insurance schemes.
  •   Deductions of income tax.
  •   Deductions made under  orders of court.
  •   Deduction for contributions to provident fund.
  •  Deduction for  constitutions  of a welfare fund for the employed persons & their family members.
  •   Deduction in respect of fees payable  for the membership of trade union.
  •   Deductions for  payment of insurance premia on fidelity guarantee bonds.
  •  Deductions for recovery of losses sustained by railway administration.
  •  Deduction  for  contributions  to  the  prime  minister’s national  relief  fund.
  •  Deduction for  contributions to any insurance schemes.

 1) Deductions for fines:-

(a) No fine shall be imposed on any employed person save in respect of such acts or omission on his part as the employer, with the Previous  approval of the State Government or of the prescribed authority, may have specified by a notice.
 
(b) The notice specifying the acts and omissions for which fines may be imposed shall be exhibited in the prescribed manner on the premises (and in case of persons employed upon a railway, at the prescribed place or places) in which the employment is carried on.

(c) No fine shall be imposed on an employed person until he has been given an opportunity of showing cause against the fine and has completed the age of 15 years.

(d) The total amount of fine which may be imposed in one wage period on any employed person shall not exceed 3 per cent of the wages payable to him in respect of that wage-period. Such a fine shall not be recovered from the employed person by installments or after the expiry of 60 days from the day on which it was imposed [ Sec. 8(6) ]


2) Deductions for absence from duty:-

         Deduction may be made on account of the absence of an employed person from duty from the place or places where, by the terms of his employment, he is required to work.  But the ratio between the amount of such deductions  
and the wages payable shall not exceed the ratio between the period of absence and total period within such wage-period. It has however been held in K.S.R.T. Employees’ Assn. Vs General Manager, K.S.R.T., (1985) that in a strike by workers in a public utility service like transport service, if employees absent for a part of the day without notice, deduction of full day’s wages would not be unjustified or illegal.

3) Deductions for Damage or Loss:-

          A deduction for damage to or loss of goods expressly entrusted to the employed person for custody or for loss of money for which he is required to accounts shall not   exceed the
  amount of the damage or loss caused to the employer by the neglect or default of the employed person. Same is the case as regards losses sustained by a railway administration on account of any rebates or refunds incorrectly granted by the employed person.

4) Deductions for services:-

         A deduction for house accommodation and such amenities and services supplied by the employer as have been authorised by the State Government shall not be made from the wages of an employed person, unless such services have  been accepted by him as a term of
  employment or otherwise. Deductions in respect of these services shall not exceed the value thereof. In case of deductions as regards services and amenities, the State Government may impose conditions.

5) Deductions for recovery of advances:-

         A deduction for recovery of an advance given to an employed person is subject to the following conditions viz., (i) recovery of an advance of money given before employment began shall be made from  the first payment of wages in respect of complete wage-period, but no recovery can be made of such advance given for travelling expenses:
 (ii) recovery of an advance of money given after employment began shall be subject to such conditions as the State Government may impose: (iii) recovery of advances of wages not already earned shall be subject to any rules may by the State Government in this regard. The State Government may regulate the extent to which such advances may be given and the installments by which they may be recovered.

6) Deductions for recovery of loans:-

          Deductions for loans granted for house-building  or other purposes and the interest due in respect thereof approved by the State Government shall be subject to any rules made by the State Government regulating the extent to which such loans may be granted and the rate of interest payable thereon.    

7) Deductions for payments to co-operative societies and insurance Schemes:-

        These deductions shall include (a) deductions for payments to co-operative societies approved by the State Government or to a scheme of insurance maintained by the Indian Post Office; and (b) deductions made with the written authrisation of the person employed for the payment of any premium of his life insurance policy to the Life Insurance Corporation (LIC) of India or for the purchase of securities of the Government of India or of  any State Government or for being deposited in any Post Office Saving Bank in furtherance of any saving scheme of any such Government.

8) Other Deductions:-

        The following deductions shall also be permitted under the Act: (a) deductions of income-tax payable by the employed person. (b) deductions required to be made by order of a Court or other authority competent to make such order [Sec. 7 (2) (h)]  (c) deductions for contributions to any insurance scheme framed by the Central Government for the benefit of its employees.
           
 Bibliography

 1.  Legal system in business  (Business Law , Company Law,  Industrial   Law )
       By :- P. saravanavel    S. sumathi
       Himalaya Publishing House

2.Industrial Jurisprudence and Labour    Legislation
            By :- A.M. Sarma
             Himalaya Publishing House
                       

online marketing, marketing jobs, business marketing, plan marketing, marketing management, what is marketing, marketing strategy, marketing manager, marketing digital, marketing social, online marketing products, online marketing efamous, b2b online marketing, b2b socialmediagroup, poster myprinting, druckerpatronen markt24, internet marketing, jobs online marketing, online marketing business, online marketing manager, jobs in marketing, sales marketing jobs, sales and marketing, online marketing jobs, online marketing, marketing jobs london, sports marketing, sports marketing jobs, digital marketing jobs, digital marketing, small business marketing, business and marketing, business marketing management, business marketing plan, business marketing jobs, business marketing online, business marketing ideas, marketing ideas, marketing degree, business marketing degree online marketing, marketing jobs, business marketing, plan marketing, marketing management, what is marketing, marketing strategy, marketing manager, marketing digital, marketing social, online marketing products, online marketing efamous, b2b online marketing, b2b socialmediagroup, poster myprinting, druckerpatronen markt24, internet marketing, jobs online marketing, online marketing business, online marketing manager, jobs in marketing, sales marketing jobs, sales and marketing, online marketing jobs, online marketing, marketing jobs london, sports marketing, sports marketing jobs, digital marketing jobs, digital marketing, small business marketing, business and marketing, business marketing management, business marketing plan, business marketing jobs, business marketing online, business marketing ideas, marketing ideas, marketing degree, business marketing degree