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Unit 6: Payment of Wages Act, 1936

All the amounts realized in our organization are credited to a common fund maintained for the Notes
staff as a whole and are applied for common welfare of the employees as a whole increasing the
Quality work life of the employees.

Example: When the persons employed upon of in any railway, factory or industrial
establishment, are part only of a staff employed under the same management, all such realisations
may be credited to a common fund maintained for the staff as a whole, provided that the fund
shall be applied only to such purposes as are provided by the prescribed authority.
6.6.3 Deductions for Services Rendered

Deductions for house accommodation and for amenities and services rendered by the employer
are permitted, but only when an employed person has accepted the house accommodation,
amenity or service as a term of employment or otherwise, and shall not exceed an amount
equivalent to their value. Furthermore, the deductions in respect of amenities and services can be
made subject only to the following conditions:
l z The approval of the Chief Inspector of Factories shall be obtained in writing to compulsory or
general deductions from waves for any amenities or services provided by the employer.

l z The kind and standard of services and amenities provided shall be subject to the approval
of the Chief Inspector of Factories.

l z The maximum deduction shall not exceed half the wages at any period. Penalty for the
contravention of any provisions of this Section is up to ` 500.
The house accommodation, for which deductions are now allowed, may be supplied by the
employer or by Government or by any housing board set up under law, e.g., under the Subsidised
Industrial Housing Scheme (whether the Government or the board is the employer or not) or any
other authority engaged in the business of subsidising house-accommodation.

6.6.4 Deductions for Recovery of Advances (Sec. 12)

Deductions for recovery of advances or for adjustment of over-payments of wages can be made
only on the following conditions:
1. An advance of money made before employment must be recovered from the first payment
of wages, but advances given for travelling expenses can in no case be recovered.
2. Advances of wages not already earned are subject to rules made by State Governments,
which are as follows:

™ z an advance of wages not already earned shall not, without the previous permission
of an Inspector, exceed an amount equivalent to the wages earned by the employed
person during the preceding two (Bombay four) calendar months, or if he has not
been employed for that period, mice the wages he is likely to earn during he two
(Mumbai four) subsequent calendar months;

™ z the advance may be recovered in installments by deductions from wages spread over
not more than twelve (Bombay eighteen) months. No instalment shall exceed one-
third, or where the wage of any wage-period are not more than twenty rupees, one
fourth of the wages for the wage-period in respect of which the deduction is made;
™ z the amounts of all advances sanctioned and the payment thereof shall be entered in
a prescribed register;
™ z (Bombay only) the rate of interest charged for advances granted shall not exceed 6
per cent per annum.
Penalty for contravention is fine up to ` 500.

LOVELY PROFESSIONAL UNIVERSITY 103