Laws Relating to Wages

8/6/2019 Laws Relating to Wages

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Presented by Nitin (PA 9035)Pradeep (PA 9041)



I t is a central legislation which has beenenacted to regulate the payment of wages to

workers employed in certain specifiedindustries.I t ensures a speedy and effective remedy

against illegal deductions and unjustifieddelays in paying wages to the workers.The act is applicable to employees drawingwages up to Rs 1600 per month.



The Central Government is responsible for enforcement of the act in railways, mines,

oilfields and air transport services.The State Governments are responsible for itin factories and other industrial

establishments.



The wages of an employed person shall be paid to him/ her without deduction of any

kind.The act allows deduction from wages of anemployee on the account of fines, absence

from duty, damage or loss of goods.



F ines shall be imposed for approved list of actsand omissions.

No fine shall be imposed on any employed person until he/she has been given an opportunityof showing cause against the fine.The total amount of fine which may be imposedin any one wage on any employed person shallnot exceed an amount equal to three percent of wages payable to him/her in respect of that wage

period.



No fine shall imposed on employed personshall be recovered from him/her by

installments or after the expiry of sixty daysfrom the day on which it was imposed.All fines and all realisation thereof shall be

recorded in a register to be kept by the personresponsible for the payment of wages.



I t was enacted to safeguard the interest of workers, mostly in the unorganised sector.I t binds the employers to pay their workers theminimum wages fixed under the act from time totime.Under the act, both the Central government andthe state governments are the appropriate

governments to fix, revise, review and enforcethe payment of minimum wages in respect of scheduled employments under their respective

jurisdictions.



There are 45 scheduled employment in theCentral and 1530 in the State sphere.I n the Central sphere, the act is enforcedthrough C I RM , while the State I ndustrialRelations Machinery ensures the enforcementof the act at the state level.Minimum wage and an allowance linked tothe cost of living index and is to be paid incash.



The minimum rate of wages consists of a basicwage and a special allowance known as

Variable Dearness Allowance(VDA) linked tothe Consumer Price I ndex.The allowance is revised twice a year, once inApril and then in October.



Committee method

Notification method



I t was enacted to provide for the payment bonus to persons in certain establishments on

the basis of profits or productivity.The act applies to every factory as definedunder the factories act,1948.I t also applies to every other establishment inwhich twenty or more persons are employedon any day during an accounting year.



The government may, after giving two monthsnotification in the Official Gazette, makes the

act applicable to any factory or establishmentemploying less than twenty but not less thanten persons.



According to the act , the term µemployee¶means ³any person employed on a salary or

wage not exceeding three thousand and fivehundred rupees per mensem in any industry todo any skilled or unskilled manual,supervisory, managerial, administrative,technical or clerical work for hire or reward,whether in terms of employment be express or implied´.



An employee is entitled to be paid by hisemployer a bonus in an accounting year

subjected to the condition that he/she hasworked for less than 30 working days of thatyear.An employer shall pay minimum bonus at therate of 8.33% of the salary or wages earned byan employee in an year.



I n any accounting year, if the allocable surplusexceeds the amount of bonus payable to the

employees, the employer shall in lieu of suchminimum bonus, be bound to pay bonusequivalent to the amount which shall notexceed 20% of the salary or wages earned by

the employees.An employee shall be disqualified fromreceiving bonus if he/she is dismissed fromservices

Laws Relating to Wages

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