Page 308 - DMGT516_LABOUR_LEGISLATIONS

Unit 12: Payment of Wages Act, 1936

12.6 Summary Notes

The Act is a protective piece of legislation. It seeks to regulate the payment of wages of
certain class of workers employed in industry. The main object of the Act is to ensure to
workers, payment of their earned wages on due date without unauthorised deduction. In
order to ensure timely payment of wages, the Act regulates the manner of payment of
wages at regular intervals. It lays down permissible deductions to protect the employed
persons against arbitrary or unauthorised deductions being made from their wages.
Any gratuity payable on the termination of employment;

Whether house rent are wages depends on the terms of the contract. It is so, if its payment
is compulsory, otherwise it is not;
The term “wages” means wages earned and not potential wages;
No other meaning can be assigned to the term “wages” than is mentioned in the definition.

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.
In other cases, wages must be paid before the expiry of the tenth day after the expiry of the
wage period.
Every fine shall be deemed to have been imposed on the day of the act or omission.

All fines and realisations thereof shall be recorded in a register to be kept by the person
responsible for the payment of wages in such form as may be prescribed. All realisation of
fines shall be applied only to such purposes as are beneficial to the persons employed in
the factory.
Deduction for recovery of loans made from any fund constituted for the welfare of labour
and the interest due in respect thereof can be made, provided the fund is constituted in
accordance with the rules approved by the State Government.
Deductions can be made for recovery of loans granted for house building or other purposes
approved by the State Government and the interest due in respect thereof.
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.
When any application for claims under this Act is entertained, the Authority shall bear the
applicant and the employer or other person responsible for payment of wages or give
them an opportunity of being heard.
If the authority hearing an application is satisfied that the application was malicious or
vexatious, it may direct a penalty not exceeding fifty rupees to be paid to the employer or
other person responsible for payment of wages, by the person presenting the application.
The authority may further direct that a penalty not exceeding fifty rupees be paid to the
State Government by the employer or other person responsible for the payment of wages
in case where the application ought not to have been compelled to seek redress under the
Act (Sec. 15 (4)).

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