Payment of Wages Act

The Payment of Wages Act of 1936 (Act) is primarily intended to help industrial workers who do not earn a lot of money. It covers all employees who work in a factory, through a subcontractor, or directly with the railway administration, and also those who operate in the industrial sector, as defined in the Act. The limit was raised to INR 24,000 per month by the Indian government in 2017. Therefore, employees with wages up to the ceiling limit are covered by the Act. If you are a citizen of the country, you should definitely know about all the details of the payment of wages act, 1936.

The objective of the Payment of Wages Act, 1936

Wages and several other essential terms are defined in Section 2 of the Payment of Wages Act, 1936, as follows:

• Appropriate Administration
• Appropriate government, according to section 2(i) of the Act, means:
• Railways, air transportation, mines, and oilfields are all under the federal government’s control.
• In all other circumstances, the State Government is in charge.

The Act’s principal goal is to prohibit improper wage deductions and eliminate unnecessary wage delays. Everyone who works in a factory, on a railway, or as a subcontractor on a railway, and everyone who works in industrial or other facilities needs to follow the payment of wages Act. The State Government may extend the provisions to any class of employees in any establishment or class of establishments by issuing a notification. The Act provides for the regular and timely payment of wages (on or before the 7th day or the 10th day once the wage period has exceeded 1000 workers) and the prevention of improper deductions from wages and arbitrary fines.

Importance of Payment of Wages Act, 1936

The policy primarily targets individuals in the industry who earn less than INR 24000 per month. The Act further stipulates that a worker cannot contract out of any privilege or right conferred upon him by the Act. The major goal of the Act is to control the timely payment of a few types of employees who operate in the industry. If there is a problem or a grievance, prompt and effective action may be taken to resolve the claims and difficulties with the help of this act. There are provisions in the statute for a remedy for wages earned while working in the office. Still, it does not include any procedures for any form of investigation into the office if there is a dispute.

What does the legislation mean by wage period fixation? 

The Payment of Wages Act, 1936  is applicable to each individual who works in the industry. The act ensures the salary of the employees will be done within one month only. The salary term cannot exceed one month under any circumstances. As a result, it is obvious that payment of wages under the act can be chosen on a day-to-day, week-to-week, month-to-month, or fortnightly basis. It indicates that wages should be paid on time and without delay, and if they aren’t, the employer or their representatives will be held responsible.

What is the definition of deduction? What are the advantages to the employee?

A deduction is made for the employee’s loss, which would be applied to his salary. The government permits these deductions for acts performed by employees in various industries. Deductions are used to subtract a specified amount from an employee’s salary. As a result, when the employer pays his employee’s salary, he deducts only what is required by law, not what is convenient for him. The deductions are imperative based on the law and are beneficial to the employee. To get a better understanding of the notion, consider what cannot be referred to as a deduction under the Payment of Wages Act of 1936:

• If the company has halted the employee’s increment,
• If the employee has been placed on leave,
• If the person was demoted because of poor performance.
• Only when the organisation has reasonable grounds, can the grounds mentioned above be used.

What does it mean to be fined? What are the different types of deductions that are allowed under the act?

With the authorisation of the proper authority, fines can be imposed on both the employee and the employer. The employer may impose a fine on the employee following the act’s rules and regulations, and is done for the benefit of both the employer and the employee. 

Fines should not be imposed on the worker until he clarifies and explains the demonstration or omission he made. The total amount of the fine should not exceed 3% of his annual salary. This increases the importance of the Payment of Wages Act, 1936.

Conclusion

The act has established various rules and regulations for the betterment and effective operation of the industry. The legislation allows workers to work freely without fear of being hampered by pay or salary delays. The code has paved the road for employees to work with dignity, and the necessary mechanisms have been established. The act’s provisions aid in the development of trust between the employer and the employee, allowing for optimum production to be attained through employee motivation. The notion of wage payment and deductions under the code is critical to the industry’s operating and producing intended output and ensuring that the benefit is supplied to the employee.