The Payment of Wages Act, 1936

The Payment of Wages Act, 1936 is extended to PAN India to ensure the proper payment of wages to the employees without any kind of delay or unauthorized deduction in the payment.

Method of Payment as per Payment of Wages Act

  • The wages can't be paid in kind; it needs to be paid in cash, i.e. the country's current currency, note or coin.
  • The amount can also be paid by cheque or by direct crediting to the bank account of the employee after getting the authorization in writing.

Authorized Deduction of Wages as per Payment of Wages Act, 1936

The employer needs to pay the wags to the employee without any kind of deduction other than the authorized reason as per the Payment of Wages Act. The list of authorized deduction from wages includes: -

  • Deduction of wages due to absent on duty/ Leave without pay.
  • Deduction of wages for house accommodations provided by the employer.
  • The wages can be adjusted towards proven damage or loss of goods by the Employee.
  • Deduction of wages as recovery of advance payments.

However, there are specific rules for the wages deduction in each condition too like:-

  • Deduction for absent on duty as per Sec. 9 of the Act: -
    • The absence being during the period of time when the staff was required to work.
    • If over 10 employees remain absent, then the deduction of wages can exceed the wages of 8 days.
  • Deduction for damage or loss as per Sec. 10 of the Act: -
    • The amount of deduction cannot exceed the amount of damage or loss caused. If it is an asset, the depreciation also needs to be calculated.
    • The employee will be given a chance to show cause.
    • A complete record of these kinds of deductions needs to be maintained in a register.

However, as per the Sec. 15 of the Act, an employee has the right to appeal against the deduction as per the Payment of Wages Act, 1936. An application can be made to the concerned authority by: -

  • The Employee himself,
  • His/her Legal practitioner,
  • Official of registered trade union,
  • Any person acting with the permission of the authorized personnel or,
  • Any inspector under this act.

Being the pre-eminent company in providing the best HR and Payroll services, SGC provides the complete assistance to the employer in accordance with the provisions of the Payment of Wages Act, 1936.
We also maintain the following records according to the Payment of Wages Act, 1936: -

  • Register to maintain fines.
  • Register of advance amount paid.
  • Register containing complete details of deduction.
  • Register of wages.
  • Annual return form IV
  • Payment of wages abstract Form V
  • Notices of rates of wages Form VI
  • Notice of date of payment.

Maintenance of following records under the Payment of Wages Act, 1936

  • Register of Fines
  • Register of Advance
  • Register of Deductions
  • Register of Wages
  • Annual Return - Form - IV
  • Payment of Wages Abstract - Form - V
  • Notice of rates of wages - Form - VI
  • Notice of Date of Payment