Payment of Wages Act.Doc

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The Payment of Wages Act (Act IV of 1936) was passed to regulate the payment of wages to certain classes of persons employed in factories and industrial establishments. The Act ensures regular and prompt payment of wages and prevents the exploitation of wage-earners by prohibiting arbitrary fines and deductions from wages. The Act applies to the whole of India, including the state of Jammu and Kashmir. The Act applies to the payment of wages to persons employed in any factory and to persons employed (otherwise than in a factory) upon any railway by a railway administration either directly or through a subcontractor, by a person fulfilling a contract with a railway administration. The State Government may after giving three months’ notice by notification in the Gazette, extend the provisions of the Act or any of them to the payment of wages of any class of persons employed in any industrial establishment or class group of industrial establishments. In many States, the Act has been extended to various industries, e.g., shops and establishments, omnibus service (in Assam, Maharashtra, and West Bengal), tramways etc. SCOPE OF PAYMENT

The Payment of Wages Act of 1936, was initially made applicable to people drawing less than Rs. 200 a month. In 1967, the limit was raised to Rs. 400 a month. On 12th November 1975, the President of India issued an Ordinance amending the Act to cover workers getting up ro Rs. 1000 a month. In 1976, the Ordinance was replaced by an Act, which was passed on 11th February. The effect of the Act was that nothing in this Act applied to wages payment in respect of a wages period, over such wage period, average Rs. 1000 a month or more. Thes limit was raised from Rs. 1000 to Rs. 1600 by the Payment of Wages (Amendment) Act, 1982. The Act of 1976 provided for the payment of wages in cash, by cheque or by crediting the wages to the bank account of a worker after obtaining his written authorization. It also permitted authorized deductions from wages for contribution to the Prime Minister’s National Relief Fund or such other funds as the Central Government may specify by notification in the official gazette.

The present law
The Payment of Wages Act of 1936 was amended in August 1982. It was passed by both the houses of the Parliament and has received the assent of the President. The amendment to the Payment of Wages Act covers all industrial establishments. The limit of emoluments of the worker is increased from Rs. 1000 to 1600. The amendment also authorized deduction from workers’ wages for a welfare fund set up by the employer or a registered trade union. The worker can authorize the management to deduct wages to a trade union according to his choice. The amendment has increased the penalty for nonpayment of wages to a minimum of Rs. 200 and maximum Rs. 1000. If an employer contravenes the provision of the amendment for the second time, the punishment would be imprisonment from one to six months and/or a fine between Rs. 500 to 3000 or both. DEFINITIONS UNDER THE PAYMENT OF WAGES ACT

Factory means a factory as defined in section 2(m) of the Factories Act, 1948. Industrial establishment
The term industrial establishment means any—(a) tramway or motor omnibus service; (b) dock, wharf or jetty; (c) inland vessel, mechanically propelled; (d) mine, quarry or oil field; (e) plantation; (f) workshop or other establishment in which articles are produced, adapted or manufactured, with a view to their use, transport or sale; (g) establishment in which any work related to the construction, development or maintenance of buildings, roads, canals or relating to operation connected with navigation, irrigation or the supply of water, or relating to the generation, transmission and distribution of electricity or any other form of power is being carried on.—Sec. 2(ii). Railway administration

Railway administration has the meaning assigned to it in section...
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