WHAT IS THE PAYMENT OF WAGE ACT 1936 ?

PAYMENT OF WAGE ACT 1936

This is one of the earlier Labour Laws passed during British Rule and came into force on 28th March 1937. 

Objective: To regulate payment of wages to persons employed directly or indirectly in Industry. Specifically, it applies to employees drawing a wage of upto Rs. 1600/- on an average per month and employed in (1) Factories, (2) Transport Service of all kinds, (3) Mines, (4) Plantations and
(5) Construction industry. The central and state Governments are empowered to bring any other industry or establishment under coverage after giving 3 months notice of their intention to do so. 

Authority: The State Government, except in the case of central Government. undertakings spread in more than one State. However, Rule making powers are vested in the State Government. Each State Government will have its
own Rules. 

Wages: ' wages ' cover all payments made to an employee including all allowances or those in kind capable of being expressed in terms of money but does not include, (a) Bonus, (b) House Rent, (c) contribution to Provident Fund or Pension Fund of the employee, (d) Travelling allowance, (e) Gratuity and (f) Special expenses. Wages can be paid by cheques or credited to the bank accounts of the employees with the consent of the employees. Employer is hefd responsible for the payment of wages to persons employed. 

Wage Period: Any period fixed by the employer not exceeding one month. 

Time of Payment of Wages: Wages are to be paid to the employees after the expiry of the wage period.

(a) before the expiry of seventh day in establishments employing less than 1000 persons and

(b) before the expiry of tenth day in establishments employing 1000 & more persons.

In the case of employees whose services are terminated by the employer, wages must be paid before the expiry of the second working day from the day on which the employment is terminated. 

Permissible Deductions from the wages :
(a) fines, (b) deduction for absence of duty, (c) reimbursement of loss caused by the employee for damage etc., (d) house accommodation, (e) cost of amenities provided, (f) advances and interest thereon, (g) loans granted from any welfare fund, house building or other purposes approved by the State Government, (h) income tax, (i) deductions as per court orders or decrees, (j) payment to co-operative societies, (k) Life Insurance Corpn. policy premium, (I) purchase of Government securities, (m) fidelity guarantee bonds insurance premium. (n) Contribution to Prime Minister's National Relief Fund or other Funds specified, notified by Central Government. (0) contribution to union fund.

Total amount Of deductions not to exceed Seventy Five per cent of wages where deductions are made for payments to co-operative societies and not to exceed Fifty per cent in other cases. 

Deduction for loss: The deduction shall not exceed actual amount of loss or damage. However, it can be made only after the employed person has been given an opportunity of showing cause against deduction

.

Deduction for service rendered: In the case of house accommodation or other amenities, the accommodation or amenities must have been accepted by the employee. 

Co-operative Societies and Insurance Schemes: Deductions will be subject to the Rules made by the State Government. 

Procedure: Claims arising out of wrongful deductions or delay in payments are to be made to the appropriate Labour Court or Tribunal authorised by the State Government. Normally, there is a special court designated as the Authority Under Payment of Wages Act'. The claim must be made in appropriate form and according to the procedure laid down in the Rules framed by the State Governments. 

Appeal: Appeal against the order of the Authority can be filed before the Court of Small Causes or a District Court. 

Display: Abstracts of the Act and the rules must be displayed by the employer in English or a language understood by majority of the employees in the factory or establishment premises.

FOR MORE DETAIL INFORMATION FOR PAYMENT OF WAGE(POW)
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