THE PAYMENT OF WAGES ACT, 1936.
[23rd April 1936]
Reasons for enactment
ΓÇó It was enacted to ensure that wages actually disbursed to workers covered by the Act are disbursed within the prescribed time limit.
ΓÇó Employees get their full wages without any deductions not authorized by law.
ΓÇó To provide for the fixation of an outer limit for deductions from wages.
An Act to regulate the payment of wages to certain classes of employed persons.
Employed Person ΓÇô includes the legal representative of a deceased person.
Employer - includes the legal representative of a deceased employer.
Wages ΓÇô includes salary, allowances, award or settlement, any sum for termination, overtime, leave wage.
Does not include ΓÇô bonus (which is not the part of salary payable), traveling allowance, PF Er.contribution, gratuity, value for house accommodation, or for supply of light, water & medical attendance of any service excluded in computation of wages.
Maximum time limit for POW.
ΓÇó 1000 or less ΓÇô on or before 7th day
ΓÇó More than 1000 ΓÇô on or before of 10th day.
ΓÇó In any case 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.(Sec. 5 Clause.2)
Mode of Payment
All wages shall be paid in current coin or currency notes or in both. (Provided that the employer may, after obtaining the written authorization of the employed person, pay him the wages either by cheque or by crediting the wages in his bank account) (Sec. 6)
Deductions permitted under the Act.
(i) shall not exceed 3 paise / rupee
(ii) shall not be recovered in installments or after 60 days of such imposition.
(iii) Not for persons who are under the age of 15years.
ΓÇó Absence from duty.
ΓÇó Damage to or loss of goods, Loss of money (when he is accountable), which is directly attributed to his, neglect or default.
ΓÇó House accommodation
ΓÇó Recovery of advances paid for traveling, conveyance or interest in case of overpayment of wages.
ΓÇó Recovery of loans made from any fund constituted for the welfare of labour under the interest prescribed by the government.
ΓÇó Housing loans & their interests thereon.
ΓÇó Income tax
ΓÇó Contributions for any insurance scheme
ΓÇó If ten or more persons, acting in concert, absent themselves without reasonable cause and without due notice, the deduction for absence can include wages for eight days in lieu of notice
Deductions for breach of contract (Sec. 26(3) (g)
(1) No deduction for breach of contract shall be made from the wages, who is under the age of 15yrs.
(2) No deduction for breach of contract shall be made from the wages of any employed person unless
(a)There is provision in writing forming part of the terms of the contract of employment requiring the employer to give notice of the termination of such employment and the period of notice does not exceed either.
(i) 15days or the wage period, whichever is less: or
(ii) the period of notice which the paymaster is required to give of the termination of that employment
(3) No deduction for breach of contract shall exceed the wages of the person employed for the period
And at any case the deductions made shall not exceed.
[*]75 % (deductions made by co-operative societies)
ΓÇó in any other case 50% of wages.
ΓÇó Cannot be imposed until he has been given an opportunity of showing cause against the fine.
ΓÇó The total amount of fine imposed in a wage period shall not exceed an amount equal to 3% of wages payable to him.
ΓÇó No fines for persons under the age of 15 years.
ΓÇó Should not be recovered by instalments or after the expiry of 60 days from the date of imposed.
ΓÇó All fines and deductions should be recorded in a separate register.
The abstracts of the Act and of the rules made thereunder required to be displayed by section 25 be in Form V. [/*][/list]