The Payment of Wages Act regulates the payment of wages to certain classes of persons employed in industry. The Act guarantees payment of wages in time and without any deductions except those authorized under the Act. The Act provides for the responsibility for payment of wages, fixation of wage period ,time and mode of payment of wages, permissible deduction. It also casts upon the employer a duty to seek the approval of the Government for the acts & omissions for which fines may be imposed by him and also ceiling upto which the fines can be imposed.
Applicability of the Act
The Act applies to every establishment within the meaning of industrial establishment or other establishment as defined under the Act.The Act does not apply to those employees whose average wages exceed Rs.1600/- per month . (section-1(6))
Labour Officers-cum-Conciliation Officers have been appointed as Authority' under the Act. within their respective jurisdiction in the State. An appeal against an order or direction of the Authority may be preferred within 30 days of the date on which theorder or direction was made before the District court by the aggrieved party. All the Officers/Labour Inspectors of the Labour Department have been declared as 'Inspector' to monitor the provisions of the Act. (section-14&15).
What should a Factory Owner/Worker know about the Act
Every employer shall be responsible for the payment to persons employed by him of all kind of wages required to be paid under the Act. (section-3)
Wages must be paid before the expiry of the 7th day after the last day of the wage period, if less than 1000 workmen are employed and in other case on the 10th day. (section-5)
Wages must be paid in current coin or currency notes and by cheque or by crediting the wages in the employee's bank account after obtaining his written authorization.(section-6)
Wages must be paid on a working day. (section-5)
To the person whose employment is terminated, wages must be paid before the expiry of the second day. (section-5)
The paymaster shall display in a conspicuous place at or near the main entrance of the factory a notice, in English and in the language of the majority of the person employed therein showing the days on which wages are to be paid.(Rule-8)
No wage period should exceed one-month. (section-4)
Deduction from Wages
No deductions shall be made from wage except those authorized under the Act.(section-7)
MAINLY THE FOLLOWING DEDUCTIONS ARE PERMITTED. (section-7)
a) An employed person can be fined only for acts and omissions which are specified in a list which is approved by the State Government or the prescribed authority.(section-8)
b) Before the fine is imposed on an employed person , he must be given an opportunity for explanation. (section-8)
c) Fines should not exceed 3% of the wages in a month. (section-8)
d) Fines shall not be recovered by installment or later than 60 days of the date of imposition. (section-8)
e) The paymaster shall maintain a register of Wages, Fines, Damages, Deductions and Advances in Form VI(PW) (Rule 3,4 &17 )
2. Deductions(section-9 to13)
i) Deductions for the absence from duty.
ii) Deductions for damages to or loss of goods expressly entrusted to the employed person for custody ,or for loss of money for which he is required to account, where such damage or loss is directly attributed to his negligence or default.
iii) Deductions for house accommodation.
iv) Deduction for amenities as authorized by the Govt.
v) Deduction for recovery of advances and interest, and for adjustment of over payment of wages.
vi) Deductions for recovery of loans from any fund constituted for the welfare of labour approved by state Govt.
vii) Deductions for recovery of loans for house building or for purpose approved by Govt.
viii) Deduction for income-tax.
ix) Deduction on orders of a court or other authority.
x) Deductions for subscription and repayment of advance from any provident fund.
xi) Deduction for payments to cooperative sectors.
xii) Deduction of premium for LIC policy or for post office saving scheme on written authorization of the employed person.
xiii) Deduction for contribution to any fund constituted by the employed or trade union for welfare of employed person with the approval of state govt.
xiv) Deduction for payment of membership fee of trade union with written authorization of employed person.
xv) Deduction for contribution to Prime Ministers' National Relief Fund or to such other fund as notified by Central Govt. with the written authorization of the employed person
Total amount of deductions should not exceed 75% of wages of the employed person in any wage period if whole or part of the deduction are meant for payment to cooperative societies.
In other cases it should not exceed 50%.
Law does not allow an employer to make any type of deduction out of the wages of a worker except those authorized by this Act.
a)The advance may be recovered in installment by deductions from wages spread over not more than twelve months. No installment shall exceed one third or where the wages for any wage period are not more than 20 rupees ¼of the wages for the wage period in respect of which deduction is made.
(b)Recovery of advances of wages or loans or payment to cooperative societies and insurance scheme shall be subject to any rules/conditions of the State Govt.
Every employer should maintain registers i.e. register of wages in prescribed form.
The registers should be preserved for a period of 3 years after the date of last entry made therein.
Claims arising out of deductions from wages or delay in payment of wages &penalty for malicious claims will be heard and decided by the Labour officer cum conciliation officer as the Authority declared by the state Govt. for their specified area.
Employees of the same unpaid group may file joint application for realization of the dues & compensation.
Application for claims out of deductions from wages or delay in payment of wages and penalty for malicious or vexatious claims shall be made in duplicate in FORM-A(PW), FORM-B(PW) or FORM-C(PW) individual, group or an Inspector respectively.
The authorization to act on behalf of an employed person shall be given to Form-D.
An appeal against an order or a direction shall be preferred in duplicate in the form of a memorandum. within 30 days to the District-Court.
An appeal/memorandum having concisely the grounds of objections shall be accompanied by a certified copy of the order.
One copy of a memorandum shall bear the prescribed court-fee.
Every employer shall afford facilities to 'Inspectors' for entry , inspection, supervision, examination, or inquiry under the Act.
The abstract of the Act and the Rules framed thereunder should be displayed in English and in a language understood by the majority of workmen in FORM-V.