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PAYMENT OF WAGES ACT,
1936[ACT NO. 4 OF YEAR 1936]
By Group # 6
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SEC. 1SHORT TITLE AND APPLICATION
It is applicable to the whole of India.
It applies in the first instance to the payment ofwages to persons employed in any factory, to
persons employed (otherwise than in a factory) uponany railway by a railway administration or, eitherdirectly or through a subcontractor, by a personfulfilling a contract with a railway administration, andto persons employed in an industrial or otherestablishment specified.
The state Government may apply the provisions ofthis act to the persons employed in any Industrial orother establishment by giving a 3 months notice.
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SHORT TITLE AND APPLICATION In case of Industrial establishment owned by
central government, with objectives not confined
to one state, such notification can be issued in
consultation with the Central Government.
In various shops, this Act has been extended to
shops and establishments also.
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DEFINITIONS In this Act, unless there is anything repugnant in
the subject or context,-
(i) "employed person" includes the legalrepresentative of a deceased employed person;
i(a) "employer" includes the legal representativeof a deceased employer;
i(b) "factory" means a factory as defined inclause (m) of section 2 of the Factories Act,1948 (63 of 1948) and includes any place towhich the provisions of that Act have beenapplied under sub-section (1) of section 85thereof
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NON APPLICABILITY
SEC. 1(6) OF THE PAYMENT OF WAGES ACT,
1936According to Sec. 1(6) of the Payment of
Wages Act, 1936 as this act is meant for the
benefit of Industrial employees not getting
high wages, therefore this Act does not applyto persons whose wages exceed Rs. 1600
per month.
This act does not make any distinctionbetween employees with reference to nature
of work carried on by them.
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WAGES
According to Sec. 2(vi) wages can be
defined as, Wagesmeans all
remuneration (whether by way of salary,
allowance or otherwise) expressed in
terms of money or capable of being doexpressed which would if the terms of
employment, express or implied were
fulfilled be payable to a person employedin respect of his employment or of work
done in such employment.
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FIXATION OF WAGE-PERIODS
(SEC. 4 & 5).
(1) Every person responsible for the payment
of wages under section 3 shall fix periods
(in this Act referred to as wage periods) in
respect of which such wages shall bepayable.
(2) No wage period shall exceed one month.
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MODE OF PAYMENT OF WAGES (SEC. 6)
All wages shall be paid in current coin or
currency notes or in both:
Provided that the employer may, after
obtaining the written authorization of the
employed person, pay him the wages either
by cheque or by crediting the wages in his
bank account
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FROM WAGES(SEC. 7)
Wages of an employed person shall be paid to him without
deductions of any kind except those authorized by or
under this Act.
Every payment made by the employed person to the
employer or his agent shall, for the purposes of this Act,
be deemed to be a deduction from wages.
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CONTINUED
Any loss of wages resulting from the imposition, for good and
sufficient cause, upon a person employed of any of the followingpenalties, namely:-
(i) the withholding of increment or promotion (including thestoppage of increment at an efficiency bar);
(ii) the reduction to a lower post or time scale or to a lower stagein a time scale; or
(iii) suspension: shall not be deemed to be a deduction from
wages in any case where the rules framed by the employer for theimposition of any such penalty are in conformity with therequirements, if any, which may be specified in this behalf of theState Government by notification in the Official Gazette.
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CONTINUED(2) Deductions from the wages of an employed person shall be
made only in accordance with the provisions of this Act, and
may be of the following kinds only, namely:-
(a) fines;
(b) deductions for absence from duty;
(c) deductions for damage to or loss of goods expressly
entrusted to the employed person or custody; or for loss of
money for which he is required to account, where such
damage or loss is directly attributable to his neglect or
default;
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CONTINUED(d) deductions for house-accommodation supplied by the
employer or by Government or any housing board set up
under any law for the time being in force (whether the
Government or the board is the employer or not) or any
other authority engaged in the business of subsidizinghouse-accommodation which may be specified in this behalf
by the State Government by notification in the Official
Gazette.
(e) deductions for such amenities and services supplied by
the employer as the State Government or any officer
specified by it in this behalf] may, by general or special
order, authorize;
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DEDUCTIONS FOR DAMAGE OR LOSS (1) A deduction under clause (c) or clause (o) of sub-section (2) of
section 7 shall not exceed the amount of the damage or loss causedto the employer by the neglect or default of the employed person.
(1A) A deduction shall not be made under clause (c) or clause (m) orclause (n) or clause (o) of sub-section (2) of section 7 until theemployed person has been given an opportunity of showing causeagainst the deduction or otherwise than in accordance with suchprocedure as may be prescribed for the making of such deduction.
(2) All such deduction and all realizations thereof shall be recorded ina register to be kept by the person responsible for the payment ofwages under section 3 in such form as may be prescribed.
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DEDUCTIONS FOR SERVICESRENDERED A deduction under clause (d) or clause (e) of
sub-section (2) of section 7 shall not be madefrom the wages of an employed person, unlessthe house-accommodation amenity or service
has been accepted by him, as a term ofemployment or otherwise, and such deductionshall not exceed an amount equivalent to thevalue of the house-accommodation amenity orservice supplied and, in the case of deduction
under the said clause (e), shall be subject tosuch conditions as the State Government mayimpose.
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DEDUCTIONS FOR RECOVERY OFADVANCES Deductions under clause (f) of sub-section (2) of section
7 shall be subject to the following conditions, namely:
(a) recovery of an advance of money given beforeemployment began shall be made from the first paymentof wages in respect of a complete wage-period, but norecovery shall be made of such advances given fortraveling-expenses;
(aa) recovery of an advance of money given afteremployment began shall be subject to such conditionsas the State Government may impose;
(b) recovery of advances of wages not already earnedshall be subject to any rules made by the StateGovernment regulating the extent to which suchadvances may be given and the installments by whichthey may be recovered.
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DEDUCTIONS FOR RECOVERY OFLOANSDeductions for recovery of loans granted
under clause of sub-section (2) of section7 shall be subject to any rules made bythe State Government regulating theextent to which such loans may be
granted and the rate of interest payablethereon.
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DEDUCTIONS FOR PAYMENTS TO CO-OPERATIVE SOCIETIES AND INSURANCESCHEMES Deductions under clause (j) and clause (k) of
sub-section (2) of section 7 shall be subject to
such conditions as the State Government may
impose.
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PENALTY FOR OFFENCES UNDERTHE ACT (1) Whoever being responsible for the payment of wages
to an employed person contravenes any of the
provisions of any of the following sections, namely,
section 5 except sub-section (4) thereof, section 7,
section 8 except sub-section (8) thereof, section 9,section 10 except sub-section (2) thereof, and section 11
to 13, both inclusive, shall be punishable with fine [which
shall not be less than two hundred rupees but which may
extend to one thousand rupees.
(2) Whoever contravenes the provisions of section 4,
[sub-section (4) of section 5, section 6, sub-section (8) of
section 8, sub-section (2) of section 10] or section 25
shall be punishable with fine which may extend to five
hundred rupees.
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PENALTY FOR OFFENCES UNDER THEACT (3) Whoever being required under this Act to maintain
any records or registers or to furnish any information orreturn-
(a) fails to maintain such register or record; or
(b) willfully refuses or without lawful excuse neglects to
furnish such information or return; or
(c) willfully furnishes or causes to be furnished any
information or return which he knows to be false; or
(d) refuses to answer or willfully gives a false answer to any
question necessary for obtaining any information
required to be furnished under this Act, shall, for each
such offence, be punishable with fine which shall not be
less than two hundred rupees but which may extend to
one thousand rupees.
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PENALTY FOR OFFENCES UNDER THE ACT (4) Whoever:
(a) willfully obstructs an Inspector in the discharge of his dutiesunder this Act; or
(b) refuses or willfully neglects to afford an Inspector any
reasonable facility for making any entry, inspection,
examination, supervision, or inquiry authorized by or under
this Act in relation to any railway, factory or
(c) willfully refuses to produce on the demand of an Inspector
any register or other document kept in pursuance of this Act;
or
(d) prevents or attempts to prevent or does anything which hehas any reason to believe is likely to prevent any person from
appearing before or being examined by an Inspector acting in
pursuance of his duties under this Act; shall be punishable
with fine which shall not be less than two hundred rupees but
which may extend to one thousand rupees.
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PENALTY FOR OFFENCES UNDER THE ACT (5) If any person who has been convicted of any offence punishable
under this Act is again guilty of an offence involving contravention of
the same provision, he shall be punishable on a subsequent
conviction with imprisonment for a term which shall not be less than
one month but which may extend to six months and with fine which
shall not be less than five hundred rupees but which may extend to
three thousand rupees:
PROVIDED that for the purpose of this sub-section no cognizance shall
be taken of any conviction made more than two years before the
date on which the commission of the offence which is being
punished came to the knowledge of the Inspector.
(6) If any person fails or willfully neglects to pay the wages of any
employed person by the date fixed by the authority in this behalf, he
shall, without prejudice to any other action that may be taken against
him, be punishable with an additional fine which may extend to one
hundred rupees for each day for which such failure or neglect
continues.
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MAINTENANCE OF REGISTERS AND
RECORDS
(1) Every employer shall maintain such registers andrecords giving such particulars of personsemployed. by him, the work performed by them, thewages paid to them, the deductions made from theirwages, the receipts given by them and such otherparticulars and in such form as may be prescribed.
(2) Every register and record required to bemaintained under this section shall, for the purposesof this Act, be preserved for a period of three yearsafter the date of the last entry made therein.
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CLAIMS ARISING OUT OF DEDUCTIONS FROM WAGES
OR DELAY IN PAYMENT OF WAGES AND PENALTY FOR
MALICIOUS OR VEXATIOUS CLAIMS
The State Government may, by notification in the OfficialGazette, appoint a presiding officer of any Labour Courtor Industrial Tribunal, constituted under the IndustrialDisputes Act, 1947 or under any corresponding law
relating to the investigation and settlement of industrialdisputes in force in the State
Any Commissioner for Workmen's Compensation orother officer with experience as a judge of a Civil Courtor as a stipendiary Magistrate to be the authority to hearand decide for any specified area all claims arising out ofdeductions from the wages, or delay in payment of thewages, of persons employed or paid in that area,including all matters incidental to such claims:
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CONTINUED Provided that where the State Government considers it necessary
so to do, it ,may appoint more than one authority for any specifiedarea and may, by general or special order, provide for thedistribution or allocation of work to be performed by them under thisAct.
When any application is entertained, the authority shall hear theapplicant and the employer or other person responsible for thepayment of wages, or give them an opportunity of being heard, and,
after such further inquiry (if any) as may be necessary, may, withoutprejudice to any other penalty to which such employer or otherperson is liable under this Act, direct the refund to the employedperson of the amount deducted, or the payment of the delayedwages, together with the payment of such compensation as theauthority may think fit, not exceeding ten times the amount deductedin the former case and not exceeding twenty-five rupees in the latter,and even if the amount deducted or the delayed wages are paidbefore the disposal of the application, direct the payment of suchcompensation, as the authority may think fit, not exceeding twenty-five rupees:
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CONTINUED
No direction for the payment of compensation shall bemade in the case of delayed wages if the authority issatisfied that the delay was due to:
(a) a bona fide error or bona fide dispute as to the amount
payable to the employed person, or(b) the occurrence of an emergency, or the existence of
exceptional circumstances, such that the personresponsible for the payment of the wages was unable,though exercising reasonable diligence, to makeprompt payment, or
(c) the failure of the employed person to apply for or acceptpayment.
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CONTINUED
(4) If the authority hearing an application under this section
is satisfied
(a) that the application was either malicious or vexatious,the authority may direct that a penalty not exceeding fifty
rupees be paid to the employer or other personresponsible for the payment of wages by the personpresenting the application; or
(b) that in any case in which compensation is directed to be
paid, the applicant ought not to have been compelled toseek redress under this section, the authority may directthat a penalty not exceeding fifty rupees be paid to theState Government by the employer or other personresponsible for the payment of wages.
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CONTINUED
(5) Any amount directed to be paid under thissection may be recovered:
(a) if the authority is a Magistrate, by the authority
as if it were a fine imposed by him asMagistrate, and
(b) if the authority is not a Magistrate, by anyMagistrate to whom the authority makesapplication in this behalf, as if it were a fineimposed by such Magistrate.
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DISPLAY BY NOTICE OFABSTRACTS OF THE ACT The person responsible for the payment of
wages to persons; employed in a factory oran industrial or other establishment shall
cause to be displayed in such factory orindustrial or other establishment a noticecontaining such abstracts of this Act and ofthe rules made there under in English and in
the language of the majority of the personsemployed in the factory, or industrial or otherestablishment, as may be prescribed.
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REGISTERS SHOULD BE MAINTAINEDREGARDING
Work performed by employee.
Wages paid to them.
Deductions from their wages.
Receipts given by them. (According toSec. 13-A).
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PAYMENT OF WAGES (AMENDMENT)ACT 2005