1. PAYMENT OF WAGES ACT, 1936
MARCH 15, 2016
Project by: - Ankush Chattopadhyay (13LLB011)

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TABLE OF CONTENTS
1. Acknowledgement……………………………………………………………………..2
2. Introduction……………………………………………………………………………3
3. History…………………………………………………………………………………4
4. Object & Benefits……………………………………………………………………...5
5. Authorities……………………………………………………………………………..7
6. Conclusion……………………………………………………………………………..9
7. Bibliography………………………………………………………………………….10

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ACKNOWLEDGEMENT
This research was supported by the esteemed teachers of our institution as well as all the
students who are a part of the team. We are thankful to our colleagues who provided expertise
that greatly assisted the research, although they may not agree with all of the interpretations
provided in this paper.
We are also grateful to Prof. (Dr.) Dilip Maruti Dhiwal for his immeasurable assistance in
teaching the subjects and in clarifying all the doubts and questions we posed.
We have to express our appreciation to the Law Faculty of The North Cap University for
sharing their pearls of wisdom with us and for making and forging us not only into better human
beings but also into knowledgeable professionals.
We are also immensely grateful to all our peers and friends for their comments and their
continuous support without which it would have been a lot harder and nigh impossible to finish
this manuscript.
Although there were numerous people and entities helping and assisting us through our
journey, any errors that have been committed are our own and should not tarnish the reputations
of these esteemed professionals.

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INTRODUCTION
Prior to 1936, there was no law regarding the regulation of payment to workmen. It was as
early as 1925 that a Private Bill called the "Weekly Payment Bill" was for the first time
introduced in the Legislative Assembly. The Bill was, however withdrawn on an assurance
from the Government that the matter was under active consideration of the Government of that
time. This was an attempt to remedy some of the evils like delay in payment of wages, non-
payment of wages, deductions made from wages on account of fines imposed by the employer
etc.
During that period the Royal Commission on Labour in India draw attention to the abuses in
the system of wage payment, and made valuable recommendation as under:
 Children should be exempted from fines imposed by the employer.
 The minimum amount which could be deducted by way of fine should not exceed, in
any month, half an anna in the rupee of the worker's earnings.
 The sum realized as fine should be utilized for some purpose beneficial to the
employees as a class and should be approved by some recognized authority.
 A notice specifying the acts and omissions in respect of which fines may be imposed
should be posted and any other fine should deemed to be illegal.
 Any deduction made for goods having been damaged should not exceed the wholesale
price of the goods damaged.
 Deductions may be made on account of provision for housing accommodation and of
tools and raw materials.
 Imposition of any fine and deduction made which is not permitted by law should be
made penal.
Based on these recommendations of Royal Commission on labor in India, a Bill of Payment
of Wages Act was introduced in the Legislative Assembly in 1933. It was passed in 1936 and
came into force on 21st March 1936. The Payment of Wages Act was amended in the year
1937, 1957, 1964 and in 1976 according to the needs of the situation prevailing at that time.
The Payment of Wages (Amendment) Act, 1976 extends the Act to the whole of India.

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HISTORY
The Payment of Wages Act, 1936 has undergone numerous amendments and adaptations since
its introduction to the Indian Legal System. A list of those amendments and adaptations are as
follows:-
1. The Government of India (Adaptation of Indian Laws) Order, 1937.
2. The Repealing and Amending Act, 1937 (20 of 1937).
3. The Payment of Wages (Amendment) Act, 1937 (22 of 1937).
4. The Payment of Wages (Amendment) Ordinance, 1940 (3 of 1940).
5. The Indian Independence (Adaptation of Central Acts and Ordinances) Order, 1948.
6. The Adaptation of Laws Order, 1950.
7. The Part B States (Laws) Act, 1951 (3 of 1951).
8. The Payment of Wages (Amendment) Act, 1957 (68 of 1957).
9. The Payment of Wages (Amendment) Act, 1964 (53 of 1964).
10. The Central Labour Laws (Extension to Jammu and Kashmir) Act, 1970 (51 of 1970).
11. The Repealing and Amending Act, 1974 (56 of 1974).
12. The Payment of Wages (Amendment) Act, 1976 (29 of 1976).
13. The Payment of Wages (Amendment) Act, 1977 (19 of 1977).
14. The Payment of Wages (Amendment) Act, 1982 (38 of 1982).

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OBJECT AND BENEFITS OF THE ACT
The objectives of the Payment of Wages Act, 1936, is to regulate the payment of wages and
to ensure that wages are disbursed within the allotted timeframe. It is also the objective of the
act to make sure that there are no deductions except those made by authorized by law.
The Payment of Wages Act, 1936 is applicable to factories, railways, air services, mines,
plantations, dock, tramway services, quarry, oil fields and establishments as notified by
appropriate government.
The Payment of Wages Act, 1936 provides with the following measures of protection: -
• covers employees drawing wages upto rs. 6,500/- per month.
(Section 01)
• payment of wages by 07th day where there are less one thousand persons employed and
where one thousand or more are employed by 10th day of the month succeeding to
wage-period in respect of which the wages are payable.
(Section 5)
• authorized deductions from wages allowed include:
• fines,
• for absence from duty.
• for damage, loss of goods.
• house accommodation provided by the employer.
• for amenities and services supplied by the employer.
• for advances, loans, income-tax, on orders of court.
• provident fund, membership of the co-operative societies.
• membership of trade union, insurance premiums.
• pm’s national relief fund or similar funds as govt. authorizes.
(Section 7)

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• for effecting any deduction without giving due opportunity to the employee concerned
this is in consonance with the principles of natural justice.
• registers and records have to be maintained for all the payments and ductions/fines made
or imposed.
• employer is required to display notice of date of payment of wages at the entrance of the
establishment.
• “if ten or more employed persons acting in concert absent themselves without due notice
and without reasonable cause, such deduction from any such person may include such
amount not exceeding his wages for eight days.
• an employed person shall be deemed to be absent from the place where he is required to
work, if although present in such place, he refuses, in pursuance of a stay-in-strike or for
any other cause which is not reasonable in the circumstance to carry out his work.
(Proviso to sub-section 2 of section 9).
• in the event of un-due delayed payments, ‘authority’ under the act may direct without
prejudice to any other penalty to such employer, direct the refund to the employed person
of the amount deducted or delayed payment, together with such compensation as may be
deemed appropriate, impose fine up to 10 times the amount deducted.
(Section 15 (3))
• attachment of property of employer responsible for payment: prescribed authority
after giving the employer an opportunity may direct the attachment of so much of the
property of the employer or other person responsible for payment of wages.
(Section 17-a)

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AUTHORITIES
There are primarily two Authorities under this act:-
• Inspectors
o (1) An Inspector of Factories appointed under Factories Act, 1948 shall be an
Inspector for the purposes of this Act in respect of all factories within the
local limits assigned to him.
o (2) The [State Government] may appoint Inspectors for the purposes of this
Act in respect of all persons employed upon a railway (otherwise than in a
factory) to whom this Act applies.
o (3) The State Government may, by notification in the Official Gazette
appoint such other persons as it thinks fit to be Inspectors for the purposes of
this Act, and ‘may define the local limits within which and the class of
factories and industrial or other establishments in respect of which they shall
exercise their functions.
o (4) An Inspector may,-
 (a) make such examination and inquiry as he thinks fit in order to
ascertain whether the provisions of this Act or rules made there under
are being observed;
 (b) with such assistance, if any, as he thinks fit, enter, inspect and
search any premises of any railway, factory or [industrial or other
establishment] at any reasonable time for the purpose of carrying out
the objects of this Act;
 € supervise the payment of wages to persons employed upon any
railway or in any factory or industrial or other establishment;
 (d) require by a written order the production at, such place, as may be
prescribed, of any register or record maintained in pursuance of this
Act and take on the spot or other wise statements of any persons
which he may, consider necessary for carrying out the put-poses of

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this Act;
 € seize or take copies of such registers or documents or portions
thereof as he may consider relevant in respect of an offence under this
Act which lie has reason to believe has been committed by an
employer;
 (f) exercise such other powers as may be prescribed:
o No person shall be compelled under this section to answer any question or
make any statement tending to incriminate himself.
• Authority to Hear Claims
o Any commissioner for Workmen’s Compensation; or
o Any Regional Labour Commissioner.
o Any Assistant Labour Commissioner.
o Presiding Officer of any Labour Court or Industrial Tribunal.

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CONCLUSION
The provisions of the Act regarding the imposition of fines on the employed person are as
follows such as, The employer must exhibit on his premises a list of acts or omissions for
which fines can be imposed, Before imposing a fine on an employed person he must be given
an opportunity of showing cause against the fine, The amount of fine must not exceed 3
percent of the wages, A fine cannot be imposed on an employed person who is under the age
of 15 years, A fine cannot be recovered by instalments or after 90 days from the day of the
act or omission for which it is imposed, The moneys realized from fines must be applied to
purposes beneficial to employed persons.
Subsection 8(3), 10(1-A) & Rule 15} deals with Any person desiring to impose a fine on an
employed person or to make a deduction for damage or loss shall explain personally or in
writing to the said person the act or omission, or damage or loss in respect of which the fine
or deduction is proposed to be imposed, and the amount of fine or deduction, which it is
proposed to impose, and shall hear his explanation in the presence of at least one other person,
or obtain it in writing.
The Payment wages act is a regulation drawn up to protect the employee’s rights from being
infringed by the employer. The employee should be paid on time and should not be harassed
against anything during the employment. It has however given a lot of protections to
employees and will continue to do so in the future as well.

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BIBLIOGRAPHY
Many books and websites were referred in order to make and complete this project. They
are as follows:-
Books
• Payment of Wages Act, 1936
• Labour and Industrials Laws, V. G. Goswami
Websites
• http://on-lyne.info/legal10.htm
• http://www.slideshare.net/SomaGiri/payment-of-wages-act-1936-9629886
• http://kkhsou.in/main/EVidya2/management/payment_wages.html
• http://www.delhi.gov.in/wps/wcm/connect/doit_labour/Labour/Home/Acts+
Implemented/Details+of+the+Acts+Implemented/The+Minimum+Wages+
Act,+1948/
• http://www.netlawman.co.in/ia/payment-wages-act-1936
• http://www.citehr.com/199973-payment-wages-act-1936-doc-
download.html