Payment of Wages Act, 1936

Objective and Applicability of the Payment of Wages Act, 1936 – The main purpose of the Payment of Wages Act, 1936 is to regulate the payment of wages. It is applicable to mainly factory, industrial establishment, tramways, dock, jetty, air transport, mine, oil field, inland vessels, plantations, workshop, establishment etc.

Maximum Wages Limit – Employees drawing salary of more than Rs.18,000/- per month is excluded from this Act.

When Wages Should be Paid – Wages should be paid within 7th of the following month when the total number of employees is less than 1000. When the total number of employees is more than 1000, then wages should be paid within 10th of the following month. Wages can be paid in cash, cheque or direct bank transfer.

Deduction of Wages by the Employer – An employer can deduct ESI contribution, PF contribution, income tax, LIC premium, advance payment etc. from the wages of the employee. The employer can also deduct for any damages caused by the wilful negligence of the employee provided a show cause notice is served to the employee. An employer can also deduct for unauthorised absenteeism.

In order to understand the complexity of the Payment of Wages Act, 1936, please contact a Labour Law Advocate nearby at the earliest.

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