Laws of Wages Lyst7869

Laws of Wages
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Table of Contents
Acts under Code on Wages 2019 ........................................................................................ 1
payment of wages act 1936 ......................................................................................................................... 1
Minimum wages act 1948 ............................................................................................................................ 3
Acts under Code on Wages 2019
payment of wages act 1936
The main object of the act is to eliminate all malpractices in payment of wages by
laying down the time and mode of payment of wages as well as securing that the
workers are paid their wages at regular intervals without any unauthorised
deductions.
the act extends to the whole of India.
Wages include the following-

• Any remuneration payable under any award or order of a court
• any remuneration for overtime work or holidays or any leave period
• Any additional remuneration under the terms of employment, including a
bonus
wages do not include-
• Any bonus which is not under the terms of employment
• value of any house accommodation, supply of light water medical attendance
• contribution paid by employer to Provident fund or pension and the interest
• travelling allowance or value of travelling concession
• Gratuity payable on termination of employment
Fixation of wage period-

• A person responsible for payment of wages is required to fix wage period. No
wage period shall exceed one month.
Time of payment of wages-
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• Wages of every person employed in an establishment with less than 1000

persons shall be paid before the expiry of 7th day.
• Wages of every person employed in any establishment shall be paid before
the expiry of 10th day after the last day of wage period.
• When employment is terminated- the wages of the employee shall be paid
before the expiry of second working day from the date of termination.
• When employment is terminated due to closure of establishment- the wages
of the employee shall be paid before the expiry of second working day from
the date of termination.
• All payments of wages shall be made on a working day
• wages to be paid in current coin or currency notes
• with permission of the employed person, wages can be paid either by cheque
or by crediting in the bank account.
Deductions that can be made from wages of an employee-

• fines
• absence from duty
• damage or loss of goods entrusted to the employee
• housing accommodation or any other amenity provided by the employer
• recovery of advances or overpayment of wages
• Recovery of loans
• subscriptions made to Provident fund
• income tax
• payment of any premium for life insurance policy or purchase of securities.
Fines that can be imposed on an employee-

• the total amount of fine shall not exceed 3% of wages payable for the wage
period.
• No fine can be imposed on a person under the age of 15 years
• no fine can be recovered in installments or after the expiry of 90 days
Miscellaneous provisions-
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• if any deductions have been made from the wages of an employed person, an
application can be made within 12 months from the date of deduction or when
the wages were due.
• the claim should be disposed off within 3 months from the date of registration
of claim by the authority
• if the application is malicious, a penalty up to Rs 375 To be paid to the
employer
Minimum wages act 1948
The concept of minimum wages was first introduced in 1928 by ILO for workers
where wages were substantially low and for labour which was vulnerable to
exploitation.
the minimum wages act came into force on 15th March 1948 in India.
the national minimum wage may differ from state to state, region to region, industry
to industry due to different geographical, topographical and agro climatic factors.
The main objective of minimum wages act is to provide for fixing minimum rates of
wages in certain employments.
Wages-
• All remunerations payable, including HRA.
• Does not include-
o Any house accommodation, supply of light, water, medical Etc
o Contribution by the employer to any pension fund or social insurance
o any travelling allowance, special expenses
o gratuity payable on discharge
Minimum rate of wages-

• Basic rate of wages and a special allowance i.e. variable dearness allowance
• Cash value of concession for supplies of essential commodities
• cost of living allowance
Fixing of minimum rate of wages-

• The appropriate government may not fix minimum rate of wages for any
scheduled employment in which less than 1000 employees in the whole state
are engaged. when it comes to its knowledge after a finding that this number
has increased to 1000 or more in such employment, it shall fix minimum wage
rate.
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• The government may fix minimum rate of wages either by the hour, by the
day, or by the month
• the minimum wage rate may be fixed at time rate, piece rate, guaranteed time
rate and overtime rate
• Different minimum wage rate may be fixed for
o different scheduled employments,
o different work in the same scheduled employment,
o different localities,
o adults, adolescents, children, apprentice.
Norms for fixing minimum wage-

• 3 consumption units per earner
• minimum food requirement of 2700 calories
• cloth requirement of 72 yards per annum per family
• rent according to minimum area provided by the government
• fuel, lighting - 20% of total minimum wage
• children education, medical requirement, recreation, marriage, festivals, old
age- 25% of total minimum wage
• indexation for inflation- minimum basic wage linked to CPI. CPI for half year
ending December and June is considered.
Revision of minimum wages-

• the government must review minimum wages within 5 years.
Procedure for fixing and revising minimum wages-

• committee method
• notification method
• committee method- an advisory committee can be created by the government

to recommend revision in minimum wages. the committee may consist of
employers and employees in scheduled employment, and independent
persons not exceeding 1/3 of total number of members.
• Notification method- the government, by a notification, can publish its

proposals in the official Gazette. affected persons can reply to the proposals
within 2 months. minimum wage rates can be revised with retrospective effect.
Employer’s checklist for minimum wages-

• Wages must be paid in cash
• when wages are to be paid in kind, the appropriate government has to
approve and authorise the same.
• Government can also authorise for supply of essential commodities at
concessional rates
• The employer can take actual work up to 9 hours in a 12 hour shift. an
overtime of double the rate is to be paid for any work in excess of 48 hours in
a week.
• Wage period cannot exceed one month.
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• the employer has to pay wages within 7 days from the end of wage period, Or
within 10 days if 1000 or more persons are employed
• If a person is discharged- outstanding wages must be paid within 2 days after
his discharge
• The employer must provide one day of rest in a period of 7 days and
remuneration in respect of such day of rest is to be paid
• If the employee works on a day of rest, remuneration equal to overtime rate is
to be paid
• Overtime wages can be claimed only by employees working at minimum
wage and not by those getting better wages.
Wages of a worker working less than normal working hours-

• if the failure to work is caused by unwillingness to work, the worker shall not
receive wages for full normal working day.
offences and penalties-

• For paying less than minimum rate of wages, For Violating any provisions -
imprisonment up to 6 months or fine up to ₹1000
pg. 5
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pg. 6
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pg. 7
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pg. 8
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Laws of Wages Lyst7869

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Laws of Wages

Acts under Code on Wages 2019

payment of wages act 1936

the act extends to the whole of India.

Wages include the following-

Fixation of wage period-

Time of payment of wages-

• Wages of every person employed in an establishment with less than 1000

Deductions that can be made from wages of an employee-

Fines that can be imposed on an employee-

Minimum wages act 1948

Minimum rate of wages-

Fixing of minimum rate of wages-

Norms for fixing minimum wage-

Revision of minimum wages-

Procedure for fixing and revising minimum wages-

• committee method- an advisory committee can be created by the government

• Notification method- the government, by a notification, can publish its

Employer’s checklist for minimum wages-

Wages of a worker working less than normal working hours-

offences and penalties-

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