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Unit 12: Payment of Wages Act, 1936

3. Any contribution paid by the employer to any pension or provident fund, and the interest Notes
accrued thereon;
4. Any travelling allowance or the value of any travelling concession;

5. Any sum paid to the employed person to defray special expenses entailed on him by the
nature of his employment;
6. Any gratuity payable on the termination of employment;

7. Whether house rent are wages depends on the terms of the contract. It is so, if its payment
is compulsory, otherwise it is not;
8. The term “wages” means wages earned and not potential wages;

9. No other meaning can be assigned to the term “wages” than is mentioned in the definition.
12.1.3 Responsibility for Payment of Wages

Every employer shall be responsible to pay wages to persons employed by him. But in the case
of persons employed (otherwise than by a contractor) in factories, industrial establishments and
railways, the following persons shall be responsible for payment of wages:
a) in factories, the person named as manager;
b) in industrial establishments, the person who is responsible to the employer for the
supervision and control of the industrial establishment;
c) upon railways (otherwise than in factories) the person nominated by the railway
administration in this behalf for the local area concerned. (Section 3)

Rules for Payment of Wages
Under the Payment of Wages Act, 1936, rules regarding the payment of wages are as follows:

Fixation of Wage-period: Every person responsible for the payment of wages under Sec. 3 shall
fix periods, known as Wages Periods in respect of which such wages shall be payable. A wage
period shall not exceed one month. (Section 4)

Time of Payment of Wages

The following rules have been laid down regarding the time of payment of wages:
1. If the number of persons employed in a factory, an industrial establishment, or railways,
including daily rated workers, is less than 1000, wages must be paid before the expiry of
the seventh day after the last day of the wage period.
2. In other cases, wages must be paid before the expiry of the tenth day after the expiry of the
wage period.
3. In the case of persons employed on dock, mine, wharf or jetty, the balance of wages found
due on completion of the final tonnage account of the ship or wagons loaded or unloaded,
shall be paid before the expiry of the seventh day after such completion.
4. 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 employment is terminated.

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