1. The Payment
of Wages Act,
1936

2. Hello!
I am Dr ANRao
I am here because I like to give
presentations.
You can find me at
prof.anrao@gmail.com
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3. Introduction
▰ The payment of Wages Act, 1936 regulates the payment
of wages to certain classes of persons employed in
industry. It was formed to ensure that the wages payable
to employees covered by the Act are disbursed by the
employer within the I 5. prescribed time limit and that no
deductions other than those authorized by law are made
by the employer. As of 1 January 1996, the law was last |
amended through the Payment of Wages (Amendment)
Act, 1982, which came into effect on 15 October 1982
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4. Main provisions of the act
1. Coverage:
▰ The Act applies to persons employed in any factory and
persons employed in the railways, either directly or
through a sub-contractor. Further, the state governments
are employed to extend the provisions of the Act to cover
persons' employed in any industrial | establishment or
any class or group of industrial establishments as defend
in the Act. The wage limit for the applicability of the Act is
Rs. 6,500.00 per month.
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5. Main provisions of the act
2. Definition of factory and industrial establishment
▰ The term ‘factory’ refers to factory as defined in Clause (m) of
section 2 of the Factories Act, 1948, and includes situations to
which I the provisions have been applied under Section 85 ( I )
of the Act Industrial establishment’ refers to a tramway service,
dock, mine, quarry oil field , plantation, workshop for
production, adaptation , manufacture of articles for use,
transport, sale; construction industry covering buildings, roads,
bridges, canals; operation connected with navigation, irrigation,
supply of water, and the generation , transmission, and
distribution of electricity or any other form of power.
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6. Main provisions of the act
3. Responsibility for payment of wages
▰ Employers, Managers of factories, and/or the persons
responsible for the supervision and control of the industrial or
other establishments are responsible for the payment of
wages.
4. Fixation of wage periods
▰ Those responsible for payment of wages shall fix the wage
periods in respect of which wages are payable and such periods
should not exceed one month
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7. Main provisions of the act
5. Time of wage payment
▰ Time for the payment of wages is fixed under the law. In a
factory in which less than one thousand persons are employed ,
wages should be paid before the expiry of the seventh day from
the last wage period. On - written request, payment may be
made either by cheque or by crediting the wages to the bank
account of the concerned employee
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8. Main provisions of the act
6. Deductions
▰ Deductions form the wages of an employed person may be
made for reasons such as fines, absence from duty, deductions
for damage or loss, house accommodation, amenities and
services, recovery of advances or loans, income tax, court
order, co-operative societies, LIC premium, Fidelity Guarantee
Bonds, Prime Minister’s National Relief Fund, trade union
subscription, etc. The total amount of deductions in any wage
period should not exceed 75% of wages if the deductions are
made for payments to cooperative societies, otherwise, these
should riot exceed 50% of wages
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9. Main provisions of the act
7. Claims
▰ Where, contrary to the provisions of this Act, any deductions
have been made from the wages of an employee, or any
payment of wages has been delayed; such persons may apply
for direction. Application must be made within 12 months from
the date of deduction or from the date on which the payment
was due. The authority may, after hearing both the persons,
direct the payment. Compensation may be ten times the
amount deducted or Rs. 25 in case of delayed wages.
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10. Main provisions of the act
8. Penalties
▰ Penalties have been provided for contravention of various
provisions of the Act, varying from a fine of Rs. 500 to Rs. 1000.
For failing to maintain prescribed registers or records, refusing
to give information, or furnishing false information, punishment
may be in the form of a fine which may extend to Rs. 500. For
obstructing an Inspector, refraining to produce any document
for the inspector, or preventing anybody from appearing before
or being examined by an Inspector, punishment may be a
minimum fine of Rs. 200 and may extend up to Rs. 1000.
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11. Main provisions of the act
9. Contracting
▰ Out Any contract or agreement, whether made before or after
the commencement of this Act, whereby an employed person
relinquishes any right conferred by this Act shall be null and
void in so far as it purports to deprive him/her in such rights.
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12. Main provisions of the act
10. Payment of undisbursed wages
▰ If the wages due to an employee cannot be paid on account of
his/her death before payment or on account of his/her
whereabouts being unknown, the same are payable to the
person nominated by him/her or, where no such nomination
has been made, the amount due is to be deposited with the
prescribed authority who shall deal with the amounts so
deposited in such manner as may be prescribed.
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13. Types of
Deductions
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14. 1. Types of Deductions

15. “
”
Employee’s wages are deducted
only by those types deductions
which are specified under the
payment of wages Act
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16. The different types of deductions
Fines (Section-8) The various provisions with respect to fines are
i. A notice will be displayed which contains information pertaining to acts
and negligence which are subject to fines. The notice is displayed
within the premises or the place wherein employment is undertaken.
undertaken.
ii. The total amount of fine imposed on an employee in one wage period
should not be more than 3% of the wages payable to worker in one
wage period.
iii. Fines are not to be collected in installment basis. Fines cannot be
collected if 60 days are crossed from the date on which fine was
imposed.
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17. The different types of deductions
Fines (Section-8) The various provisions with respect to fines are
iv. The fines imposed on and fines collected from workers are
recorded in a register in a specified format, recording is done
by the person who is responsible to pay wages to workers.
v. Except for acts and negligence specified by state government,
employer or prescribed authority, no fine will be imposed on
other acts and omissions.
vi. Before imposing fine of a worker, workers should be given
opportunity to reveal his acts and omission which resulted in
payment of fine
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18. The different types of deductions
Fines (Section-8) The various provisions with respect to fines are
vii. An individual who has not crossed 15 years of age is not
liable to pay fine. In other words, employees will not
impose fine on an individual who has not crossed 15
years of age
viii. Fine is imposed on the day on which the act or omission
taken place.
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19. Deductions from Wages in Case of Absent (Section-9)
i. In spite of coming to the duty, if an employee refuses to
do any work due strike or any other causes to the in this
situation that employee is considered as absent from
duty.
ii. If an employee gets absent to the duty without any prior
pension and with unreasonable reason this situation the
amount deducted from wage payment of that employee
should not be more than days wages of the employee.
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20. Deductions from Wages in Case of Absent (Section-9)
iii. Deductions might be made from an employee's wages
when he gets absent to the duty from the place or from
place where employee is supposed to work.
iv. The ratio of deduction for absent from duty and the
wages to be paid should be lesser than or udal to radio
of absence period and total wage period
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21. Deductions in Case of Damage or Loss (Section-10)
i. A deduction from employee wages for damage or loss
should not be more than the damage or loss suffered by
employer due to negligence of employee.
ii. The information pertaining to deductions made for
damages or loss are maintained in a record form
individual who is liable to pay wages to its
workers/employees.
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22. Deductions in Case of Damage or Loss (Section-10)
iii. If an employee is give some goods or money to keep in
his custody and some damage or loss occurrence to
those goods or money due to employee negligence or
default than that person wages are deducted for such
damages or loss.
iv. A person wages are deducted for damage or loss only
after giving chance to him to reveal the behind such
damage or loss.
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23. Deductions from Wages for Accommodation and Service
(Section-11)
Employer can make deductions from wages for
accommodation and services provided of the employee but
under below mentioned conditions.
i. i) Supply of raw materials and tools for carrying out
work does not come under service no deductions are
made for such things.
ii. ii) The amenities and services for which deductions can
be made should be declared as authentic by state
government through general or special order
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24. Deductions from Wages for Accommodation and Service
(Section-11)
iii. Employer cannot be made deductions for services till
the employee accepts that such services are on among
the terms and conditions of his employment.
iv. State governments are given power to set rules to
regulate deduction for amenities and services.
v. The deduction amount should not be more than the
value of accommodation, amenities and services
provided to employee by employer
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25. Deductions from Wages for Recovery of
Advance (Section-12)
Deductions can be made from wages for recovery of
advances but under below mentioned conditions.
i. Deductions for recovery of advances are subject to
conditions specified by the state government.
ii. The advantage given before employment will be
recovered from first payment of wages. The advance
given for travelling charges cannot be recovered.
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26. Deductions from Wages for Recovery of
Advance (Section-12)
Deductions can be made from wages for recovery of
advances but under below mentioned conditions.
iii. Recovery of wages paid as advances not already earned
will have to follow the rules laid down by the state
government. The state government decides to what
extent such kind of advances can be given, how they
can be recovered in installment and rate of interest on
such kind of advance.
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27. Deductions from Wages for Recovery of
Loans (Section 12 A)
i. Deductions can 'be made from the wages of the
employed parson for recovering the loan provided to
that parson for constructing a house or other
requirement approved by the state government.
Interest due on load can also be recovered by deducting
from wages.
ii. Loans granted to a person from labour welfare fund and
interest on such loans can be recovered but on the
condition that the fund is constructed ns per the rules
accepted by the state government.
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28. Deductions from Wages for Making Payment
to Cooperative Societies and Insurance
Schemes (Section 13)
i. Deductions made with the written formal approval of
employee for premium payment on his purchase of
securities of government of Indian or any state
government or life insurance, policy to the Life
Insurance Corporation (LIC) of India or for savings in
any post office savings bank.
ii. Deductions from wages of employed person for making
payment to cooperative societies approved by the state
government or for making payment to insurance
schemes set by the Indian post office
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29. Other Deductions
The other types of deductions, permitted under the payment
of wages act are listed down below
i. Deductions which need to made from the wages of
employed person by court order.
ii. Deductions to be made to pay insurance premium of
fidelity guarantee bonds:
iii. iii) Deductions made with a written approval from an
employee for payment of membership fees of trade
union registered under the trade union Act 1926
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30. Thanks!
Any questions?
You can find me at:
▰ prof.anrao@gmail.com
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