8/6/2019 45503583-wages-act

1/14

INTRODUCTIONINTRODUCTION

y In early days of industrial revolution, workers

were exploited with exorbitant delays in

payment of wages , arbitrary deductions and

other unfair practices on the part ofemployers. Delay in the payment of wages,

heavy fines for small omission and

commission. Were quite common.

Irregularities committed by employers were

brought into the notice of ROYAL

COMMISSION OF LABOUR IN INDIA.

8/6/2019 45503583-wages-act

2/14

OBJECT OF THE ACTOBJECT OF THE ACT

y The main object of the Act is to ensure toworkers, payment of their earned wages ondue date without unauthorised deduction.

y

In order to ensure timely payment of wages,the Act regulations the manner of paymentof wages at regular intervals.

y It lays down permissible deductions to

protect the employed persons againstarbitrary or unauthorised deductions beingmade from their wages.

8/6/2019 45503583-wages-act

3/14

Scope and coverageScope and coverage

y The act applies to the whole of India. The

act applies to the payment of wages to

person employed in any factory and to

prsons employed upon any railway by arailway administration.

y The act doesnt apply to person whose

wages exceed rs 1600 per month. Thislimit was raised from rs 1000 by

amending

8/6/2019 45503583-wages-act

4/14

DEFINITIONSDEFINITIONS

y Employed person: employed person

includes the legal representative of a

deceased employed peson.

y Employer: Employer includes the legal

representative of deceased employer.

y Industrial establishment: tram-way service

or motor transport engaged in carryingpassengers and goods or both by road for

hire or reward.

8/6/2019 45503583-wages-act

5/14

y Inland vessel mechanically propelled.

y Mine, quarry or a jetty

y

Plantationy Establishment in which any work relating

to the constructions, development or

maintenance of building, roads, bridges or

canals or relating to transmission, ordistribution of electricity, or any other

form of power is being carried on.

8/6/2019 45503583-wages-act

6/14

y Wages: wages means all remunerations

expressed in terms of money or capital of

being expressed which would, if the terms

of employment, expressed or implied arefulfilled, be payable to persons employed

in his employment or of work done in

such employment.

8/6/2019 45503583-wages-act

7/14

The expression wages does notThe expression wages does not

include.include.

y The bonus declared voluntarily on the basisof profits, and bonus which does not frompart of remuneration payable under the

terms of employment or which is notpayable under any award or settlementbetween the parties or order of a court.

y The value of any house accommodation, of

the supply of water, light, medical attendance,or other amenity or any service excludedfrom the computation of wages by a generalor specific order of the state government.

8/6/2019 45503583-wages-act

8/14

y Any contribution paid by the employer to

any pension or provided fund, and the

interest accrued thereon;

y Any travelling allowance or the value of

any travelling concession;

y Any sum paid to the employed person to

defray special expenses entailed on himby the nature of his employment.

8/6/2019 45503583-wages-act

9/14

y Any gratuity payable on the termination ofemployment.

y Whether house rent are wages depends on

the terms of the contract. It is so, if itspayment is compulsory, otherwise it is not.

y The term wages means wages earned andnot potential wages.

y No other meaning can be assigned to theterm wages than is mentioned in thedefinitions.

8/6/2019 45503583-wages-act

10/14

Responsibility for payment of wagesResponsibility for payment of wages

y Every employer shall be responsible towages to persons employed by him. But inthe case of persons employed in factories,industrial establishment and railways, the

following persons shall be responsible forpayment of wages.

y 1 In factories, the persons named asmanager.

y 2 In industrial establishment, the person whois responsible to the employer for thesupervision and control of the industrialestablishment.

8/6/2019 45503583-wages-act

11/14

Rules for payment of wagesRules for payment of wages

y Fixation of wage-period: every person

responsible for the payment of wages

under sec 3 shall fix periods, known as

wages period in respect in respect ofwhich such wages shal be payable. A wage

period shall not exceed one month.

8/6/2019 45503583-wages-act

12/14

Time of payment of wagesTime of payment of wages

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 beforethe expiry of the seventh day after the

last day of the wage period.

In other cases, wages must be paid beforethe expiry of the expiry of the tenth day

after the expiry of the wage period.

8/6/2019 45503583-wages-act

13/14

y Where the employment of any person isterminated by or on behalf of the employer,the wages earned by him shall be paid before

the expiry of the second working day fromthe day on which employment is termineted.

y If the employment is terminated due to theclosure of establishment for any reason

other than a weekly or other recognisedholiday, wages will be paid before the expiryof second working day from the day onwhich employment is being terminated.

8/6/2019 45503583-wages-act

14/14

y The state government may, by a general

or special order, exempt the person

responsible for the payment of wages

from the operations of the aboveprovisions in certain cases.

y All payment of wages shall be made on a

working day.