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Unit 8: Payment of Wages Act, 1936

and without reasonable cause, such deduction from any such person may include such amount Notes
not exceeding his wages for eight days as may by any such terms be due to the employer in lieu
of due notice.

Notes Deductions for absence from duty. Deductions from wages on account of absence of
an employed person should be proportionate to the period of absence from work. If a man
is absent for one day out of 8, he can only lose 1/8 of his wages and the employer cannot
make a greater deduction because of the inconvenience occasioned to him by such absence
(Arvind Mills Ltd. vs. K. R. Gadgil, AIR 1941, Bom. 26). Also as per sub-section (2) of this
section, if the duration of his wage period is one month, the total number of working days
being 25, and the employed person is absent from duty for four days, the maximum
deduction allowed is 4/25th of the wages for the month. This is so because the amount of
deduction is to be proportionate to the period for which a person is required to work
which is 25 days in the present case. This section lays down the maximum amount of
deduction. It may be less if the employer so wills.

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Caution As an exception to what is said in the above paragraph, the employer is entitled to
make deduction upto 8 days of wages where ten or more employed persons acting under
concert absent themselves without due notice and without reasonable cause. It may be
noted that the legislature has not used the word ‘strike’ though this proviso relates to
strike so called. The reason seems to be that the word ‘strike’ is used in different senses and
has no accepted connotation.
8.6.6 Deductions for Damage of Loss (Sec. 10)

A deduction for damage to or loss or goods expressly entrusted to the employed person for
custody, or for loss of money which he is required to account can be made where such loss is
directly attributable to his neglect or default. A deduction for damage or loss shall not exceed
the amount of damage or loss caused to the employer by his neglect or default. A deduction for
damage or loss shall not be made until the employed person has been given an opportunity of
showing cause against the deduction. All deductions and realisations in respect of damage or
loss shall be recorded in a register to be kept by the person responsible for the payment of
wages.

Self Assessment

State whether the following statements are true or false:

11. 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.
12. A deduction for damage or loss shall not be made until the employed person has been
given an opportunity of showing cause against the deduction.

8.7 Penalty for Offences under the Act

The penalties for non-compliance of the Act is prescribed in section 20 of the Payment of Wages
Act, 1936.

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