Employers are obliged to pay the right amount of wages at the right time. Know more according to the Wages Act.

In order to meet the Obligations of Employer under the Wages Act, The Payment of Wages Act of 1936 was enacted. The statute is intended to provide redress for unlawful deductions made by the employer and unjustifiable salary delays. The Payment of Wages Act governs the payment of wages to employees of any manufacturing industry or railway administration, or by a person executing a specific contract with a railway administration or an industrial facility. According to this statute, an employer is required by law to pay wages within the specified time frame. 

Payment of Wages

According to Section 3 of the Payment of Wages Act, every employer is accountable for the payment of wages to all employees under him/her. You can use the information below to determine who is liable as an employer in various establishments.

• Factories- Manager of the factory
• Industries or any other Establishments: Supervisor
• Contractor: Person designated by such contract
• Railway: Person nominated by the railway administration

What wage period should be fixed by the employer?

Section 4(2) of the Payment of Wages Act, of 1939 states that no wage period, or the period during which a worker receives his or her wage, should exceed one month. Example: A is an employee at ABC factory, and his salary period is 40 days, which means he receives his pay every 40 days. According to the legislation, X’s employer is responsible for establishing a wage period that exceeds one month.

The obligation of Payment within Stipulated Time

• If fewer than 1,000 people are engaged in a railway, factory, industry, or other facility, wages must be paid before the seventh day of the pay period.
• If more than a thousand people are engaged in a railway, factory, industry, or other facility, wages must be paid before the ninth day of the pay period.
• In the case of a person employed on a port, wharf, or jetty, or in a mine, the balance of wages discovered due to the completion of the final tonnage amount of the wagons (loaded/unloaded), such amount should be paid before the seventh day from the date of completion.
• If an employee’s employment is terminated by the employer, his or her pay must be reimbursed before the second workday  following the termination date.
• Wages for railway employees or daily rated personnel in the Public Works Department (PWD) of the Central Government or the State Government shall be paid after consultation with the Central Government.
• All wage payments for the aforementioned instances should be made on a business day.

Obligation to pay wage in current coin or currency note

All payments to employees must be paid in current coins or current notes, according to the Payment and Wages Act. After getting the employee’s written authorization, the employer pays him/her by check or by crediting the amount to the employee’s bank account.

Deductions under the Payments of Wages Act

Under the Payment and Wages Act, any payment made by an employee to his employer shall be deemed a deduction.

No Permitted Deduction

Any damage caused by the imposition of the penalties listed below will not be deductible under the Underpayment and Wage Act:

• Suspension
• refusal to offer a promotion or increase
• The move to a lower post or a lower stage on the scale

Authorised Deductions

The deduction authorised under Section 7 of the Payment of Wages Act is outlined in full below:

• Imposing fines on the employees
• Deduction of wages for absence from duty
• Deduction wages for damage or loss
• Deduction wages for payments to cooperative societies and insurance schemes
• Deduction of wages for recovery of loans
• Deduction of wages for house accommodation and services rendered
• Deduction for recovery of advances

Unlawful Deductions

Deductions other than those authorised by Section 7 of the Payment of Wages Act are illegal. Any deduction from an employee’s wages done for reasons other than those listed in section 7 is considered an unlawful deduction.

Deductions from wages are not permissible under the Payment of Wages Act of 1936, as stated in the grounds and methods.

Rules for Imposing Fines

Any employer may levy a fine on an employee as a legal deduction. The following are the requirements of employers before imposing any fines on employees:

• The employer can impose fines based on a list of their acts and omissions, which must specify acts and omissions from a list already endorsed by the state government or the relevant authorised body for the entire industry.
• A notice displaying the employer’s list of actions and omissions for which fines can be levied on employees should be posted in a prominent location on the work premises.
• According to this act, no fines should be levied on an employee unless he or she has been given the opportunity to show cause for the fine.
• The entire number of fines levied shall not exceed 3% of the employee’s salary.
• Any employee under the age of 15 should not face a fine.
• Any fine levied on an employee will not be recovered in installments.
• The fine will not be recovered from the employee beyond ninety days from the date it was imposed.
• All fines must be documented in the register kept by the personnel in charge of wage fixing.
• Fines shall be credited to the general fund and used for the purposes specified.

Rules for Deductions of wages for Absence

Any employer may withhold wages for absence from work, as this is a legal deduction. The following are the obligations of the employer when deducting salaries from employees:

• The employer may deduct some earnings for the employee’s absence in proportion to the overall time he or she was required to accomplish the work.
• If ten or more workers, in concert, absent themselves without providing notice to the employer or for any acceptable reason, the employer cannot make deductions in excess of earnings for eight days.
• If the employee’s absence occurs between the employee’s dismissal and reinstatement, the employer cannot deduct such absence.

Deduction of wages for damages or losses

Under the Payment of Wages Act, any employer may deduct wages for damage or loss.

• The employer must not deduct wages in excess of the amount of loss or damage to items caused by the employee’s carelessness or default.
• It should be made sure that the employee has control of the damaged products.
• Before deducting any wages for damage, the employer must provide the employee an opportunity to prove cause.

Obligation to maintain Registers and Records

Every employer is required by the Payment and Wages Act to keep a register and records. The following information should be included in the registry.

• Employee information
• The work performed by the worker
• Employee wage that is being paid
• The amount deducted from their wages
• The receipts provided by them
• Other employment information

Every registration and record kept under this legislation will be kept for three years after the last entry is made.

Note: The owner is responsible for keeping a wage register in accordance with rules 5, 4, and 9 of the Payment Wages (Mines) Rules, 1956. The management cannot be penalized for breaking these rules.

Conclusion

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