Payment Of Wages Act 1936 (2022)

Application of Payment of Wages Act 1936

The Act will apply to persons employed in any factory or 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 establishments.

Here “factory” means a factory as defined in section 2(m) of the Factories Act, 1948 (63 of 1948) and includes any place to which the provisions of that Act have been applied under section 85(1) thereof.

Table of Contents

(Video) Payment of Wages Act, 1936 | with Latest Amendments | UGCNET |

  • 1 Application of Payment of Wages Act 1936
  • 2 Meaning of wages
  • 3 Responsibility for Payment of wages
  • 4 Wage period for payment of wages
  • 5 Maintenance of registers and records
  • 6 Penalties
  • 7 Payment in case of death of the employed person whose wages are not disbursed

This Act applies to wages payable to an employed person in respect of a wage period if such wages for that wage period do not exceed Rs 6500/- per month or such other higher sum which, on the basis of figures of the Consumer Expenditure Survey published by the National Sample Survey Organisation, the Central Government may, after every five years, by notification in the Official Gazette, specify”.

Meaning of 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, and includes:

  • Any remuneration payable under any award or settlement between the parties or order of a court;
  • Any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period;
  • Any additional remuneration payable under the terms of employment (whether called a bonus or by any other name);
  • Any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum, whether with or without deductions, but does not provide for the time within which the payment is to be made;
  • Any sum to which the person employed is entitled under any scheme framed under any law for the time being in force, But does not include106.

Responsibility for Payment of wages

Every employer shall be responsible for the payment of all wages required to be paid under this Act to persons employed by him and in case of persons employed:

  • In factories, if a person has been named as the manager of the factory under clause (f) of subsection (1) of section 7 of the Factories Act, 1948 (63 of 1948);
  • In industrial or other establishments, if there is a person responsible to the employer for the supervision and control of the industrial or other establishments;
  • Upon railways (other than in factories), if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned;
  • In the case of contractor, a person designated by such contractor who is directly under his charge;

Wage period for payment of wages

The person responsible for payment of wages shall decide the wage period. But the period shall not exceed one month.

(Video) Payment of Wages Act 1936 | Full Lecture | Labour Laws compliance for HR Managers & Directors

The wages of every person employed upon or in any railway, factory or industrial or other establishment upon or in which less than 1000 persons are employed, shall be paid before the expiry of the 7th day after the last day of the wage-period in respect of which the wages are payable Any other railway, factory or industrial or other establishment that is where more than 1000 people are employed, shall be paid before the expiry of the 10th day, after the last day of the wage-period in respect of which the wages are payable.

In the case of persons employed on a dock, wharf or jetty or in a mine, the balance of wages found 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.

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.

But 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 recognized 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.

(Video) Payment of Wages Act, 1936||Object , Application, Person responsible for payment of wages( Class-1)

Maintenance of registers and records

It is the responsibility of the employer to maintain such registers and records giving particulars of persons employed by him, the work performed by them, the wages paid to them, the deductions made from their wages and such other particulars. Every record and register maintained shall be preserved for a period of 3 years after the date of last entry made therein.

Penalties

  1. Whoever being required under this Act to maintain any records or registers or to furnish any information or return
  • Fails to maintain such register or record; or
  • Willfully refuses or without lawful excuse neglects to furnish such information or return; or
  • Willfully furnishes or causes to be furnished any information or return which he knows to be false; or
  • refuses to answer or willfully gives a false answer to any question necessary for obtaining any information required to be furnished under this Act, shall, for each such offence, be punishable with fine which shall not be less than Rs 1500/- one but which may extend to Rs 7500/-.

2. Whoever-

  • Willfully obstructs an Inspector in the discharge of his duties under this Act; or
  • refuses or willfully neglects to afford an Inspector any reasonable facility for making any entry, inspection, examination, supervision, or inquiry authorized by or under this Act in relation to any railway, factory or industrial or other establishment; or
  • Willfully refuses to produce on the demand of an Inspector any register or other document kept in pursuance of this Act; or
  • prevents or attempts to prevent or does anything which he has any reason to believe is likely to prevent any person from appearing before or being examined by an Inspector acting in pursuance of his duties under this Act; shall be punishable with fine which shall not be less than Rs 1500/-one but which may extend to Rs. 7500/

3. If any person who has been convicted of any offence punishable under this Act is again guilty of an offence involving contravention of the same provision, he shall be punishable on a subsequent conviction with imprisonment for a term which shall not be less than one month but which may extend to six months and with fine which shall not be less than Rs 3750/- but which may extend to Rs 22500/-.

4. If any person fails or willfully neglects to pay the wages of any employed person by the date fixed by the authority in this behalf, he shall, without prejudice to any other action that may be taken against him, be punishable with an additional fine which may extend to Rs 750/- for each day for which such failure or neglect continues.

(Video) Introduction to Payment of Wages Act 1936 (Video-1) || for CS, CMA & LL.B

Payment in case of death of the employed person whose wages are not disbursed

Where the amount payable to an employed person as wages could not be paid on account of his death before payment or on account of his whereabouts not being known;

Be paid to the person nominated by him in this behalf. 2. Where no such nomination has been made or where for any reasons such amount cannot be aid to the person nominated, be deposited with the prescribed authority.

FAQs

What is the major objective of the Payment of Wages Act 1936 What is its scope define wages as per this act? ›

The Payment of Wages Act, 1936 (Act) is essentially meant to benefit industrial employees who do not have very high salaries. It applies to all employees working in a factory or working through a sub-contractor or directly with the railway administration or those employed in the industrial sector as the Act specifies.

What are the valid deduction under the Payment of Wages Act 1936? ›

Any deduction under the order of the court or any other competent authority. Provident fund – subscription and also the repayment of advances. Payments that the employee makes to cooperative societies. Payment of premium of the life insurance policy to the Life Insurance Corporation of India, of the employed person.

What is the maximum wage period for the payment of wages Mcq? ›

Fixation of wage-periods- (1) Every person responsible for the payment of wages under section 3 shall fix periods (in this Act referred to as wage-periods) in respect of which such wages shall be payable. (2) No wage-period shall exceed one month.

What is the object of payment of Wages Act 1936? ›

The main objective for the introduction of the Payment of Wages Act, 1936, is to avoid unnecessary delay in the payment of wages and to prevent unauthorized deductions from the wages.

What are the main provisions of payment of Wages Act 1936? ›

Payment of Wages Act, 1936 regulates the payment of wages to certain classes of people employed in industry and its importance cannot be under-estimated. The Act guarantees payment of wages on time and without any deductions except those authorized under the Act.

What are the rules for payment of wages? ›

The employer or the person responsible for making the payment of wages must pay in currency coins or currency notes or in both. Further, he cannot pay in kind. Also, the employer can pay the wages via a cheque or a direct deposit to the bank account of the employee after taking a written authorization from him.

Can an employer deduct wages without notice? ›

Taking money from wages without consent or contractual provision can result in a claim for unlawful deduction of wages, even if the individual has been employed for less than two years.

What are the principles of payment of wages? ›

In sum and substance, a sound compensation system should encompass factors like adequacy of wages, social balance, supply and demand, fair comparison, equal pay for equal work and work measurement.

Who is responsible for the payment of wages under the Act? ›

As per the provision of Section 3 of the Payment of Wages Act, every employer shall be responsible for the payments of wages to all persons employed under him/her.

Who is covered under payment of Wages Act? ›

This Act is applicable to all persons employed, whether directly or through contractors, in a factory or certain specified industrial or other establishments. The Central Government is responsible for enforcement of the Act in Railways, Mines, Oilfields and air transport services.

How many sections are there in payment of Wages Act? ›

Deductions which may be made from wages. Section 8. Fines. Section 9.
...
Language.
Act ID:193604
Short Title:The Payment of Wages Act, 1936
Long Title:An Act to regulate the payment of wages of certain classes of employed persons.
Ministry:Ministry of Labour and Employment
Enforcement Date:28-03-1937
3 more rows

Is payment of Wages Act 1936 repealed? ›

The following Act of Parliament received the assent of the President on the 15th February, 2017, and is hereby published for general information:— Page 2 3. (1) The Payment of Wages (Amendment) Ordinance, 2016 is hereby repealed.

When was the payment of Wages Act 1936 amended last? ›

The Payment of Wages (Amendment) Bill, 2017 was introduced in Lok Sabha on February 3, 2017 by the Minister of Labour and Employment, Mr. Bandaru Dattatreya. The Bill amends the Payment of Wages Act, 1936.

Which one is the method of wage payment Mcq? ›

Solution: Time rate system method of wage payment is most suitable where the speed of production is beyond the control of worker. The time rate system is that system of wage payment in which the workers are paid on the basis of time spent by them in the factory.

How minimum wages are calculated? ›

In order to calculate the daily wage, monthly gross salary is divided by 30, as the weekly offs are taken as the pay leaves. (The salary is to be divided by 30, irrespective of the actual number of days in a month).

Which is not included in wages under payment of Wages Act? ›

(s) “wages” means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employments and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages and ...

Can wages be paid monthly? ›

The wages can be paid by the employer on (i) daily, (ii) weekly, (iii) fortnightly, or (iv) monthly basis. The industrial or commercial establishments may be required by notification to pay wages through cheque or by crediting the wages directly in the worker's bank account.

What is the minimum wage act? ›

The Minimum Wages Act 1948 is an Act of Parliament concerning Indian labour law that sets the minimum wages that must be paid to skilled and unskilled labours. An Act to provide for fixing minimum rates of wages in certain employments.

When was the payment of Wages Act enacted? ›

ACT 4 OF 1936 The Payment of Wages Bill, 1935 having been passed by the Legislative Assembly received its assent on 23rd April, 1936. It came on the Statute Book as THE PAYMENT OF WAGES ACT, 1936 (4 of 1936).

Can an employer charge employee for mistakes? ›

Generally, unless you have a contractual right to make the deduction for the mistake, or the employee agrees in writing before making the deduction, the deduction will be unlawful.

What happens if a company pays you by mistake? ›

Can employers take back wages from overpaid employees? Both federal legislation like the Fair Labor Standards Act (FLSA) and state labor and employment laws give employers the right to recover an overpayment in full.

What is Unauthorised deduction of wages? ›

Deducting money out of an employee's wages before they are paid in full and without their consent is an unauthorised deduction. This may give rise to a situation of debt bondage, a form of modern slavery.

What are the two basic methods of wage payment? ›

Payment of Wages: Systems, Methods and Formula for paying Wages to Employees and Workers
  • There are mainly two system of paying wages to employees viz., Time wage system and Piece wage system which are explained below:
  • Merits or Advantages:
  • Demerits or Disadvantage:
  • Time wage system suffers from the following demerits:

What are the types of wages? ›

Types of Wages:
  • Piece Wages: Piece wages are the wages paid according to the work done by the worker. ...
  • Time Wages: If the labourer is paid for his services according to time, it is called as time wages. ...
  • Cash Wages: ADVERTISEMENTS: ...
  • Wages in Kind: ...
  • Contract Wages:

What are the factors affecting wages? ›

Top 8 Factors Influencing the Determination of Wage Rates
  • Ability to Pay:
  • Demand and Supply:
  • Prevailing Market Rates:
  • Cost of Living:
  • Bargaining of Trade Unions:
  • Productivity:
  • Government Regulations:
  • Cost of Training:

What is the scope of the Payment of Gratuity Act 1972? ›

An employee is entitled for the payment of gratuity if he/she has rendered five years of continuous service on his superannuation, retirement, resignation, death, disablement. However, the five years of continuous service is not mandatory in the case where the termination is due to death or disablement.

What are the main objectives of the Payment of Bonus Act 1965? ›

The main object of the Payment of Bonus Act, 1965 is to maintain peace and harmony between labour and capital by allowing the employees to share the prosperity of the establishment, prescribing the minimum and maximum rates of Bonus together with the scheme of 'Set on' and 'Set off'.

What are the objectives of Minimum Wages Act 1948? ›

Objectives of Minimum Wages Act

To secure an adequate living wage for all the labourers in the interest of the public. To fix the daily working hours of the employees. To prevent exploitation of the workers by the employers. To ensure that the labourers can maintain a decent standard of living.

What is payment of Wages Act 1936 PPT? ›

The payment of wages Act was passed to regulate the payment of wages to certain class of persons employed in industry. It applicable to factory, railway, industrial and other establishment etc. Every employer is responsible for payment of wages and payment must be paid to employed person not exceed than one month .

What is the new rule of gratuity 2022? ›

New Rule in 2022

Organizations will have to pay a minimum of 50% of the salary of the employees as basic pay. In such situations where the basic pay of the employee is below 50%, the employers may need to restructure the employee's salary structure to abide by the new rules under the four labour codes.

Is payment of gratuity mandatory? ›

As per the government laws, it is mandatory for employers to pay the amount of gratuity within 30 days. However, if there is a delay in the payment of the gratuity, then the employer has to pay simple interest on this amount from the due date till the date of payment.

Who is liable to pay gratuity? ›

Organisations with a workforce of 10 employees on a single day in the preceding 12 months are liable to pay gratuity. If the number of employees of the same organisation reduces to under 10, it will still have to pay the gratuity, as per regulations of the Act.

What are the salient features of the payment of bonus Act 1936? ›

Every year, every employer shall be bound to pay bonus to every employee. a minimum bonus which shall be 8.33% cent of the salary or wage earned by the employee during the accounting year or 100/- rupees, whichever is higher. Bonus shall be payable in case of profits or losses in the accounting year.

Who is liable for payment of bonus under the payment of bonus Act 1965? ›

Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.

Who is eligible for payment of bonus under the payment of bonus Act 1965? ›

The Payment of Bonus Act, 1965 provides for the payment of bonus to persons employed in certain establishments, employing 20 or more persons, on the basis of profits or on the basis of production or productivity and matters connected there with.

What are the 3 types of wages? ›

There are three kinds of wages minimum wage, fair wage & living wage.

Who is covered under payment of Wages Act? ›

This Act is applicable to all persons employed, whether directly or through contractors, in a factory or certain specified industrial or other establishments. The Central Government is responsible for enforcement of the Act in Railways, Mines, Oilfields and air transport services.

Who can claim minimum wages? ›

(1) The appropriate government may by notification in the Official Gazette appoint any Commissioner for Workmen's Compensation or any officer of the Central Government exercising functions as a Labor Commissioner for any region or any officer of the State Government not below the rank of Labor Commissioner or any other ...

What are the rules for payment of wages? ›

The employer or the person responsible for making the payment of wages must pay in currency coins or currency notes or in both. Further, he cannot pay in kind. Also, the employer can pay the wages via a cheque or a direct deposit to the bank account of the employee after taking a written authorization from him.

What are the objectives of payment of wages? ›

Purpose of the Act

The main objective of the Act is to avoid unnecessary delay in the payment of wages and to prevent unauthorized deductions from the wages. Every person employed in any factory, upon any railway or through sub-contractor in a railway and a person employed in an industrial or other establishment.

What is the minimum wage act? ›

The Minimum Wages Act 1948 is an Act of Parliament concerning Indian labour law that sets the minimum wages that must be paid to skilled and unskilled labours. An Act to provide for fixing minimum rates of wages in certain employments.

Videos

1. PAYMENT OF WAGES ACT 1936, IN ENGLISH FOR CS, CMA, LLB, BCOM
(Eduattack)
2. Payment of wages act
(CA AKHILA NARAYANAN)
3. Payment of Wages Act 1936 in Hindi | Full Lecture | All Sections Covered | By CS Shalini Agarwal
(S.A. Classes)
4. Payment of Wages Act 1936 | Deductions of Wages | Duties of employer | Appeal and Claims | Section 6
(LEGAL PEDIA)
5. PAYMENT OF WAGES ACT 1936 in HINDI Part 1 for CS, CMA, LLB, BCOM
(Eduattack)
6. Payment of Wages Act 1936 = Part 1 (Full)
(CS Shantanu Pethe (CA CS CMA Coach))

Top Articles

You might also like

Latest Posts

Article information

Author: Rob Wisoky

Last Updated: 09/17/2022

Views: 5885

Rating: 4.8 / 5 (48 voted)

Reviews: 87% of readers found this page helpful

Author information

Name: Rob Wisoky

Birthday: 1994-09-30

Address: 5789 Michel Vista, West Domenic, OR 80464-9452

Phone: +97313824072371

Job: Education Orchestrator

Hobby: Lockpicking, Crocheting, Baton twirling, Video gaming, Jogging, Whittling, Model building

Introduction: My name is Rob Wisoky, I am a smiling, helpful, encouraging, zealous, energetic, faithful, fantastic person who loves writing and wants to share my knowledge and understanding with you.