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Labour Laws
Notes The Gross rate of pay should include allowances that an employee is entitled to under his/her
contract of service, but it excludes the following:
(a) Additional payments by way of:
z overtime payments;
z bonus payments; or
z annual Wage Supplements;
(b) Any sum paid to the employee for reimbursement of special expenses incurred by him/her
in the course of employment;
(c) Productivity incentive payments; and
(d) Travelling, food or housing allowances.
Self Assessment
Fill in the blanks:
5. The Payment of Wages Act, 1936 came into operation of ..................... .
6. For the purpose of calculating salary, a ..................... refers to any one of the months in the
calendar year.
7. If the number of working hours in any working day is ..................... hours or less, it shall be
regarded as a half-day.
8. Daily basis of wages can be further categorized into ..................... and ..................... .
6.5 Rules in Payment of Wages Act
Following are the rules applicable for in Payment of Wages Act area as follows:
6.5.1 Wage-periods (Sec. 4)
Every person responsible for the payment of wages must fix wage-periods in respect of which
wages shall be payable, and see that no wage-period exceeds one month in any case. The penalty
for contravention of this provision is fine extending to ` 200.
6.5.2 Time of Payment of Wages (Secs. 5, 6)
In regard to the time of payment of wages the following rules must be observed:
Section 5 of the Act lays down that the wages of every person employed upon or in:
(a) Any railway, factory or other establishment upon or in which less than one thousand
persons are employed, shall be paid before the expiry of the seventh day.
(b) Any other railway, factory or industrial or other establishment, shall be paid before the
expiry of the tenth day after the last day of the wage-period in respect of which the wages
are payable.
(c) In the case of persons employed on a dock, wharf or jetty or in a mine, the balance of wages
found due on the completion of a final tonnage amount of the ship or wagons loaded or
unloaded, as the case may be, shall be paid before the expiry of the seventh day from the
day of such completion.
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