PAYMENT OF WAGES ACT, 1936

The Payment of Wages Act, 1936 is one of the old enactments dealing with employer-employee relationship. The limited purpose of the Act is to ensure prompt and full payment of wages to persons employed in industry. 

APPLICABILITY

(a) Every person employed in any factory, upon a railway or through sub-contractor in a railway and any person employed in an industrial or other establishment.

(b) The Appropriate Government may by notification extend the provision to any class of person employed in any establishment or class of establishments.

ELIGIBILITY OF EMPLOYEES

Every person who is employed in any of the above mentioned establishments and who is drawing less than Rs. 10,000/- per month is eligible under the benefits of Payment of Wages Act, 1936.

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

a.    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.

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

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

d.    Every employer is required to file Annual Return in Form V (In Maharashtra) regarding persons drawing gross wages below Rs. 1,000/- p.m.

e.    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.

PENALTIES FOR NON-COMPLIANCE

Penalties prescribed are from Rs. 1,500-7,500. Repeat offences attract 1 to 6 months imprisonment and fine from Rs. 3,750-22,500. Delayed wage payments attract penalty of Rs. 750 per day of delay.

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