Payment of Wages Act
The Act is to regulate payment of wages to certain class of employed persons. The Act applies to payment of wages to persons employed in factory or railways. It also applies to any 'industrial or other establishment' specified in section 2(ii). [section 1(4)]. 'Factory' means factory as defined in section 2(m) of Factories Act. - - Industrial or other establishment specified in section 2(ii) are - * Tramway or motor transport services * Air transport services * Dock wharf or jetty * Inland vessels * Mines, quarry or oil-field * Plantation * Workshop in which articles are produces, adopted or manufactured. - - The Act can be extended to other establishment by State/Central Government.
ELIGIBILITY - The Act is applicable to the employees receiving wages below Rs. 10,000/- per month. Persons employed in a railway establishment, either directly or through a contractor, are also covered under the Act.
Every employer is responsible for payment to persons employed by him on wages. [section 3].
MEANING OF WAGES - Wages means all remuneration expressed in terms of money and include remuneration payable under any award or settlement, overtime wages, wages for holiday and any sum payable on termination of employment. However, it does not include bonus which does not form part of remuneration payable, value of house accommodation, contribution to PF, traveling allowance or gratuity. [section 2(vi)]
HOW WAGES SHOULD BE PAID - Wages can be paid on daily, weekly, fortnightly or monthly basis, but wage period cannot be more than a month. [section 4]. Wages should paid on a working day. Wages are payable on or before 7th day after the 'wage period'. In case of factories employing more than 1,000 workers, wages can be paid on or before 10th day after 'wage period' is over. [section 5(1)]. [Normally, 'wage period' is a 'month'. Thus, normally, wages should be paid by 7th of following month and by 10th if number of employees are 1,000 or more]. - - Wages should be paid in coins and currency notes. However, with authorization from employee, it can be paid by cheque or by crediting in his bank account. [section 6].
DEDUCTIONS PERMISSIBLE - Deduction on account of absence of duty, fines, house accommodation if provided, recovery of advance, loans given, income tax, provident fund, ESI contribution, LIC premium, amenities provided, deduction by order of Court etc. is permitted. Maximum deduction can be 50%. However, maximum deduction up to 75% is permissible if deduction is partly made for payment to cooperative society. [section 7].
FINES – Specific notice specifying acts and omissions for which fine can be imposed should be exhibited on notice board etc. Such notice can be issued only after obtaining specific approval from State Government. Fine can be imposed only after giving employee a personal hearing. Fine can be maximum 3% of wages in a month. Fine cannot be recovered in installments. [section 8].