Page 298 - DMGT516_LABOUR_LEGISLATIONS

Unit 12: Payment of Wages Act, 1936

i) deductions for recovery of losses sustained by a railway administration on account Notes
of any rebates of refunds incorrectly granted by the employed person where such
loss is directly attributable to his neglect or default;
j) deductions made with the written authorisation of the employed person for
contribution to the Prime Minister’s National Relief Fund or to such other funds as
the Central Government may by notification in the official Gazette specify;
k) deductions for contribution to any insurance scheme framed by the Central
Government for the benefit of its employees.
The list of deductions in Sec. 7 (2) is exhaustive. Further, if any deduction is claimed by an
employer, the burden specifically and clearly lies upon him to prove that the deduction is of a
nature which is capable of falling within the several clauses of Sec. 7 (2).
There is no provision in the Act limiting the period within which the employer should make the
deduction for adjustment of overpayment of wages.
Every payment by the employed person to the employer or his agent shall be deemed to be a
deduction. Any loss of wage resulting from the imposition, for good and sufficient cause, upon
a person employed, of any of the following penalties, shall not be deemed to be a deduction
from any wages. These penalties are suspension, withholding of increment or promotion
(including stopping of increment at the efficiency bar).

12.2 Illegal Deductions

Any deductions other than those authorised under Section 7 of the Act would constitute illegal
deductions.

Limit on the Amount of Deductions (Sec. 7(3))

The total amount of deductions, which may be made under Section 7 in a wage period from the
wages of any employed person shall not exceed 75 per cent of such wages in cases where such
deductions are wholly or partly made for payments to co-operative societies. In any other case,
the deductions shall not exceed 50 per cent of such wages. Any agreement or contract by which
an employee agrees to any deductions other than those authorised under the act would be null
and void under Section 23 of the Act. There is, however, no provision in the Act limiting the
period within which the employer should make the deduction for adjustment of overpayment
of wages.

Maintenance of Registers and Records (Sec. 13-A)

Every employer must maintain registers and records, giving the following particulars of every
person employed by him:
a) the work performed by the person employed;
b) the wages paid to him;

c) the deductions made from his wages;
d) the receipts given by him.
The registers and records shall be in such form as may be prescribed; they shall be preserved for
a period of three years after the date of the last entry made therein.

LOVELY PROFESSIONAL UNIVERSITY 293