PRESENTATION ON

PAYMENT OF WAGES
ACT,1936
PRESENTAD BY: VIMALJEET KAUR
MBA 3RD SEM
 INTRODUCTION
In the early days of industrial revolution, workers were
exploited with exorbitant delays in payments of wages,
arbitrary deductions and other unfair practices on the part
of employers. Delay in the payments of wages, deductions
of two day's wages for one day ‘s absence, heavy fines for
small omissions and commissions, were quite common so
to protect the worker’s wages this act was passed in 1936,
and it come force on 28th march 1937.
 OBJECT OF THE ACT
 The act is a protective piece of legislation. It
seeks to regulate the payment of wages of
certain class of workers employed in industry.
The main object of act is to ensure to workers,
payment of their earned wages on due date
without unauthorized deduction. In order to
ensure timely payment of wages, the act
regulates the manner of payment of wages at
regular intervals.
 SCOPE AND COVERAGE
 The act applies to the payment of wages to
persons employed in any factory and to
persons employed (other than in a factory) upon
any railway by a railway administration. It the
latter case, it also applies to persons employed
either directly or through a contractor. The act
does not apply to persons whose wages exceed
Rs.1600 per month. This limit was raised from
Rs.1000 by amending the act in 1982.
 DEFINATIONS(SEC.2)
 "industrial or other establishment" means-
1. tramway service, or motor transport service
engaged in carrying passengers or goods or both by
road for hire or reward
2. air transport service other than such service
belonging to, or exclusively employed in the
military, naval or air forces of the Union or the Civil
Aviation Department of the Government of India.
3. dock, wharf or jetty.
4. inland vessel, mechanically propelled
 "wages" means all remuneration (whether by
way of salary, allowances or otherwise)
expressed in terms of money or capable of
being so expressed which would, if the terms
of employment, express or implied, were
fulfilled, be payable to a person employed in
respect of his employment or of work done in
such employment,
 Responsibility for payment of wages
 (a) in factories, if a person has been named as
the manager of the factory under [clause (f) of
sub-section (1) of section 7 of the Factories
Act, 1948 ],

 (b) in industrial or other establishments, if

there is a person responsible to the employer
for the supervision and control of the industrial
or other establishments;]
 Fixation of wage-periods
 (1) Every person responsible for the payment
of wages under section 3 shall fix periods (in
this Act referred to as wage-periods) in respect
of which such wages shall be payable.
 (2) No wage-period shall exceed one month.
 Time of payment of wages
 The wages of every person employed upon or
in—

 (a) any railway, factory or [industrial or other

establishment] upon or in which less than 1000
persons are employed, shall be paid before the
expiry of the seventh day.
 (3) Where the employment of any person is terminated by or
on behalf of the employer, the wages earned by him shall be
paid before the expiry of the second working day from the day
on which his employment is terminated:
 [Provided that where the employment of any person in an
establishment is terminated due to the closure of the
establishment for any reason other than a weekly or other
recognized holiday, the wages earned by him shall be paid
before the expiry of the second day from the day on which his
employment is so terminated.]
 Medium of payment of wages

 All wages shall be paid in current coin or

currency notes or both. The employer may,
after obtaining the written permission of the
employed person, pay him wages either by
cheque or by crediting the wages in the bank
account.
Deductions which may be made from wages
 Fines. Sec 8
 (1) No fine shall be imposed on any employed
person save in respect of such acts and
omissions on his part as the employer, with the
previous approval of the State Government or
of the prescribed authority, may have specified
by notice under sub-section (2).
 given an opportunity of showing cause against
the fine, or otherwise than in accordance with
such procedure as may be prescribed for the
imposition of fines.
 (2) The total amount of fine which may be
imposed in any one wage-period on any
employed person shall not exceed an amount
equal to[three per cent.] of the wages payable
to him in respect of that wage-period.
 (3) No fine shall be imposed on any employed
person who is under the age of fifteen years.
 (4) Every fine shall be deemed to have been
imposed on the day of the act or omission in
respect of which it was imposed.
 (5) All fines and all realizations thereof shall be
recorded in a register to be kept by the person
responsible for the payment of wages under
section 3 in such form as may be prescribed; and
all such realizations shall be applied only to such
purposes beneficial to the persons employed in
the factory or establishment as are approved by
 the prescribed authority.
 Deductions for absence from duty (sec.9)
 Deductions may be made under clause (b) of sub-section (2) of section 7
only on account of the absence of an employed person from the place or
places where, by the terms of his employment, he is required to work,
such absence being for the whole or any part of the period during which
he is so required to work.

 Rules made in this behalf by the State Government, if ten or more

employed persons acting in concert absent themselves without due notice
(that is to say without giving the notice which is required under the terms
of their contracts of employment) and without reasonable cause, such
deduction from any such person may include such amount not exceeding
his wages for eight days as may be any such terms be due to the employer
in lieu of due notice.
 Deductions for damage or loss (sec.10)
 A deduction shall not exceed the amount of the damage or
loss caused to the employer by the neglect or default of the
employed person.
 A deduction shall not be made under until the employed
person has been given an opportunity of showing cause
against the deduction, or otherwise than in accordance with
such procedure as may be prescribed for the making of such
deductions.
 All such deductions and all realizations thereof shall be
recorded in a register to be kept by the person responsible
for the payment of wages under section 3 in such form as
may be prescribed.
 Deductions for services rendered (sec.11)
 A deduction shall not be made from the wages
of an employed person, unless the house-
accommodation amenity or service has been
accepted by him, as a term of employment or
otherwise, and such deduction shall not exceed
an amount equivalent to the value of the house-
accommodation amenity or service supplied.
 Deductions for recovery of loans (sec 12A)
 Deduction for recovery of loans made from
any fund constituted for the welfare of labour
and the interest due in respect thereof can be
made, provided the fund is constituted in
accordance with the rules approved by the state
government.
 Other deductions
 Deduction of income tax payable by the
employed person.
 Deduction required to be made by order of a
court.
 Deduction for contribution to any insurance
scheme framed by the central government for
the benefit of its employees.
Limit on the amount of deductions (sec.7(3))
 The total amount of deduction, which may be made
under section 7 in a wage period from the wages of
any employed person shall not exceed 75 % of the
such wages in cases where such deduction are wholly
or partly made for payments to co-operative societies.
In any other cases, the deduction shall not exceed
50% of such wages .
 Maintenance of registers and records
 Every employer shall maintain such registers
and records giving such particulars of persons
employed by him,
 The work performed by them,
 The wages paid to them,
 The deductions made from their wages,
 The receipts given by them and such other
particulars and in such form as may be
prescribed.
 Inspectors
 An Inspector of Factories appointed under[sub-section (1)
of section 8 of the 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.

 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.
 In the case of delayed wages if the authority is
satisfied
that the delay was due to-
 (a) a bona fide error or bona fide dispute as to the amount payable to
the employed person.
 (b) the occurrence of an emergency, or the existence of exceptional
circumstances, such that the person responsible for the payment of the
wages was unable, though exercising reasonable diligence, to make
prompt payment.
 (c) the failure of the employed person to apply for or accept payment.
 If the authority hearing an application under this section is satisfied--
 (a) that the application was either malicious or vexatious, the authority
may direct that a penalty not exceeding fifty rupees be paid to the
employer or other person responsible for the payment of wages by the
person presenting the application;
 Where there is any dispute as to the person or persons being the legal
representative or representatives of the employer or of the employed
person, the decision of the authority on such dispute shall be final.

 Any inquiry under this section shall be deemed to be a judicial

proceeding within the meaning of sections 193, 219 and 228 of the Indian
Penal Code (45 of 1860).

 (5) Any amount directed to be paid under this section may be recovered—
( recovery of amount)

 (a) if the authority is a Magistrate, by the authority as if it were a fine

imposed by him as Magistrate, and

 (b) if the authority is not a Magistrate, by any Magistrate to whom the

authority makes application in this behalf, as if it were a fine imposed by
such Magistrate.
 Appeals
 An appeals may be preferred against the following;
 An appeal against an order dismissing either wholly
or in part an application made on the ground that
deduction are made contrary to the act or payment of
wages has been delayed.
 A direction to Refund the amount deducted from
wages to the employed person.
 A direction by the authority to pay penalty to the
employer from making malicious or vexatious
application.
Penalty for offences under the Act
 Whoever being required under this Act to maintain any records
or registers or to furnish any information or return—
 (a) fails to maintain such register or record; or

 (b) wilfully furnishes or causes to be furnished any information

or return which he knows to be false; or

 (c) refuses to answer or wilfully gives a false answer to any

question necessary for obtaining any information required to be
furnished under this Act; shall, for each such offence, be
punishable with fine which shall not be less than two hundred
rupees but which may extend to one thousand rupees.
 Whoever—

 (a) wilfully obstructs an Inspector in the discharge of his

duties under this Act; or

 (b) refuses or wilfully neglects to afford an Inspector any

reasonable facility for making any entry, inspection,
examination, supervision, or inquiry authorized by or
under this Act in relation to any railway, factory
or[industrial or other establishment]; or

 (c) wilfully refuses to produce on the demand of an

Inspector any register or other document kept in
pursuance of this Act; or
 Obligation of employers
 Under this act ,every employer is required;
 To see that all his workmen are paid their wages regularly and in
time, as required, under the act(sec.3&5)
 To fix wage periods which shall not exceed one month(sec.4)
 To pay wages in current coin or currency notes or both(sec.6)
 Not to make unauthorized deduction(sec7).
 To impose fines only for permissible acts and omission and after
giving adequate opportunity to show cause against the fines and
deduction.(sec.8)
 To maintain registers and records giving particulars of person
employed, the work performed by them, the wages paid to them and
the deduction made from their wages, fines imposed and realization
made (sec10,13A)
 Rights of employers;
 To deduct from the wages of worker an amount
not exceeding his wages for 8 days as may, by
any terms be due to the employer in lieu of
clue notice, if the worker together with 10 or
more workers absents himself from duty
without notice or without any reasonable
cause, or goes on strike.
 Right of empoyees;
 To receive his wages in the prescribed wage period in
cash or by cheque or by credit to his bank a/c(sec.3).
 To refuse to agree to any deduction & fines, other than
those authorized under the act (sec.7,8).
 Approach within 6 months, the prescribed authority to
claim unpaid or delayed wages, unauthorized deduction
& fines , other along with compensation(sec.15,16).
 To appeal against the direction made by the authority, if
the amount of wages claimed exceeds rupees 100.
(sec17).
THANKS