Ms.

KHUSHBOO BIDAWATKA
M.Com, Company Secretary

Chap 7. Payment of Wages Act, 1936

1. Introduction
1. With the increase number of industries in India, problems relating to payment of wages to employees
working with industries were also increasing.
2. The Industrial units were not at regular intervals.
3. Wages making payment of wages to their were not uniform and employers were making unauthorized
deductions from wages.
4. The industrial workers were forced to raise their heads against their exploitation.

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2. OBJECT
1. The main objective of the Act is to avoid unnecessary delay in the payment of wages and to prevent
unauthorized deductions from the wages.

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2. Every person employed in any factory upon any railway or through sub-contractor in railway and a
person employed in an industrial or other establishment.
3. The State Government may by notification extend the to any class of persons employed in any

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establishment or class of establishment.
4. The benefit of the Act prescribes for the regular and timely payment of wages (on or before 7th day or
10th day after the wage period is of establishment. greater than 1000 workers) and Preventing
unauthorized deductions being made from wages and arbitrary fines
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3. APPLICABILITY OF THE ACT
1. This law is called the Payment of Wages Act, 1936.
2. It applies to all of India.
3. It starts when the Central Government says so in the Official Gazette.
4. At first, it covers paying workers in factories, on railways, or in other industries.
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5. State Governments can add more workplaces under this law after giving three months' notice in the Official
Gazette.
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6. Some states also include shops and other businesses under this law.
7. This law covers wages up to ten thousand rupees per month for workers.
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4. RESPONSIBILITY OF PAYMENT OF WAGES

Every employer shall be responsible for the payment to persons employed by him of all wages required to be
paid under the Payment of Wages Act but if persons employed otherwise than by a contractor in factories
industrial establishments or upon railways, the following persons shall also be responsible for the payment of
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wages:
(a) In factories, the person is named as the manager.
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(b) In industrial or other establishment ,the person if any who is responsible to the employer for the supervision
and control of the Industrial or other establishment
(c) Upon railway way's other than in factories the person nominated by the railway administration in this behalf
for the local area concerned.
(d) In case of contractor, a person designated by such contractor.
(e) In any other case, a person designated as responsible for complying with the provisions of the act.

5. FIXATION OF WAGE PERIODS

Every person responsible for payment of wages shall fix a period known as wage-periods, in respect of which
such wages shall be payable. A wage period should not exceed one month.
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 Ms.KHUSHBOO BIDAWATKA
M.Com, Company Secretary

6. TIME OF PAYMENT OF WAGES

1. If you work in a place with fewer than 1000 employees, like a railway, factory, or small business, your
wages must be paid within 7 days after the end of the pay period.
2. If there are more than 1000 employees, you should get paid within 10 days after the end of the pay
period.
3. If you work at a dock, wharf, or mine, you should be paid within 7 days after the final tonnage account
of ships or wagons is completed.
4. If you leave your job, your employer has to pay you within 2 working days from the day you leave.

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5. Sometimes, the government can allow employers to have different payment rules in special cases.
6. Wages should always be paid on a working day, not on holidays or weekends.

7. MODE OF PAYMENT OF WAGES

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1. All wages must be paid in cash (coins or notes), not in goods or services.
2. However, in certain situations where there are many employees, a large amount of money involved, or if the
workplace is far away, the employer can pay wages by check or directly deposit them into the employee's bank

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account, but only with the employee's written permission.
3. The law lists authorized deductions from wages in Section 7.
4. These deductions are further explained in different sections of the act.

8. DEDUCTIONS FOR FINES

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1. Employers can't just fine their employees for anything. They can only fine them for specific things that
they've already told them about and got approval for from the State Government or the right authority.
2. They have to put up a notice explaining these specific things where the employees can see it.
3. Employees should have a chance to explain themselves before any fines are given, following the proper
procedure.
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4. The total amount of fines in one pay period can't be more than three percent of the employee's wages for that
period.
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5. Kids under fifteen can't be fined.

6. Employees can't be forced to pay fines in installments, and the employer can't wait more than sixty days to
ask for the fine.
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7. Fines are counted from the day the employee did something wrong, not when the fine is given.

9. Deductions from absence from duty

1. Deductions from an employee's wages can only be made if the employee is absent from work without a valid
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reason, according to the terms of their employment contract.

2. The deducted amount can't be more than the proportion of wages for the period of absence compared to the
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total wages for the entire pay period.

3. However, if ten or more employees skip work together without proper notice and without a good reason, the
deduction can include an additional amount as specified in their contracts for the days they were absent without
notice.

10. PENALTY FOR OFFENSE UNDER THE ACT

1. If someone responsible for paying wages to an employee delays payment or makes unauthorized deductions,
they can be fined between 200 and 1,000 rupees.
2. Not paying wages on a working day, not paying in cash, not recording fines, or not displaying the rules of the
Act can lead to a fine of up to 500 rupees for each offense.
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 Ms.KHUSHBOO BIDAWATKA
M.Com, Company Secretary

3. If someone fails to maintain records, refuses to provide information, furnishes false information, or obstructs
an inspector, they can be fined between 200 and 1,000 rupees for each offense.
4. If someone commits the same offense again, they can be fined up to 1,000 rupees or imprisoned for up to 3
months, or both. But if the previous conviction was more than two years ago, it won't be considered.

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