Payment of Wages Act 1936

Minimum Wages Act, 1948

Payment of Bonus Act 1965
Incriminate

To cause to appear guilty of a crime or wrong
act; to imply guilt

Police found incriminating evidence in the
Arushi murder case.
Unions gave a statement incriminating the
payroll officer.
Payment of Wages Act 1936
Objects:
Safeguard wages of workers
Ensure wages are paid at regular intervals in a
particular form, without unauthorised
deduction

State Govt has the power to extend the
coverage of the Act to establishments who are
not covered, by giving 3 months notice
All India
Definitions
Employer, Employee, Factory
Industrial or Other Establishment
Wages: All remuneration, incl salary,
allowances, expressed in terms of money,
express or implied
Person named as manager in a factory
Person responsible to the employer for the
supervision and control of the establishment

Sec 4: Fixation of wage period: should not exceed
one month
Sec 5: Time for wage payment: If <1000 people
employed, wages must be paid by the 7
th
day after
the last day of the wage period
In all other cases, by the 10
th
day
In the case of termination, wages earned
should be paid by the expiry of the second
working day from the day of termination
All payments must be made on a working day
As per Payment of Wages Act (Amended),
1976, wages may be paid by cheque or
credit into bank account
Authorised deductions:
A) withholding of increment or promotion ,
stoppage of increment at an efficiency bar
B) Demotion to a lower post
C) Suspension
Fines
For acts of commission or omission which are
specified in an approved list
List must be exhibited at work place
Opportunity must be given to show cause
No fine for person <15 years
Cannot be recovered in installments after 60
days from date of being imposed
Records in a register
Fine cannot exceed three paisa per rupee of
the payable wages
Absence from duty:
Includes refusal to carry out work

For damage or loss:
Loss of goods entrusted to the employee
where it is attributable to his neglect

Recovery of advances/over-payment of
wages/Loans

For payment of income tax


Orders of the court
Provident fund
Payments to Co-operative societies /
Insurance schemes
For housing supplied by employer
To make up loss for fake currency accepted
To make up losses for failure to invoice or
collect

Incorrect rebates or refunds given
Written permission of the employee for
contributions to National Defence fund etc.
Authorisations by the employee for his
contributions to insurance, pension, post
office schemes
For loss or damage to goods in the custody
of the employee, or refunds/rebates given
where the loss is not directly attributable to
his neglect
For tools or raw materials supplied for his
work
For premium etc. without authorisation
Deduction in excess of 50% of wages

Employer must maintain:
List of persons employed
Work performance by them
Wages paid to them
Deductions made from their wages
Receipts given by them

Sec 14: Authorities under the Act
Inspector of Factories appointed under Sec 8(1) of
the Factories Act, 1948 is an inspector , under this
Act, of all factories within the local limits assigned to
him
Examine and Enquire as he deems fit
Enter, inspect and search premises
Supervise payment of wages
Require production of registers and records
Take statements; seize records
Cannot compel anyone to make statements
which may incriminate himself
Appointed by the State Govt.
Presiding officer of any labour court or
industrial tribunal or corresponding law
Any commissioner of workmen's
compensation
Judge of a Civil court
To ensure wages are paid on time
Not to make unauthorised deductions
Maintain register with full details
Display an abstract of the Act and the Rules
made there from at a prominent location
Maintain registers for 3 years after last entry

Deduct wages of up to 8 days if a worker,
with 10 others, strikes or absents himself
Appeal against the direction made by a court
for payment of wages and compensation if
the amount exceeds Rs 300
Receive wages in the prescribed period in
cash
Refuse to agree to any deductions and fines
other than those under the Act
Approach authority under the Act regarding
unpaid/delayed wages, unauthorised
deductions, fines.
Sec 20: Penalties
Employer: Punishable with fine and imprisonment
up to 6 months

Some offences include:
Failing to maintain registers
Refusal to furnish records
Willfully obstructing an Inspector
Not paying wages as stipulated, on time



MINIMUM WAGES ACT,
1948
NOTE: MINIMUM WAGES ACT IS NOT
INCLUDED IN THE SYLLABUS FOR INDUSTRIAL
RELATIONS SL HR 605.
IT IS INCLUDED HERE FOR BETTER
AWARENESS.
Bare physical necessities

CONCEPT OF MINIMUM WAGE
Living Wage:
Appropriate for normal needs of average employee
regarded as human being living in a civilised
society.
Provides essentials of food, clothing, shelter and a
measure of comfort including education for children,
protection against ill health, essential social needs,
insurance against old age
Mean between living wage and minimum
wage
Related to workload and earning capacity
Step lower than living wage
Depends on productivity of labour, prevailing
rates of wages in similar occupations in the
neighbourhood, level of national income,
place of the industry in the economy

Bare physical necessities and a little comfort
Below this the workers efficiency would be
impaired
Capacity of employer to pay is irrelevant


All India
Central Govt is empowered to fix minimum
wages detailed in Schedule 1
Ref. Page 680, Mamoria for Schedule 1
State Govt to fix for other employments
Child, Adolescent, Adult
Appropriate Govt
Employer
Employee
Wages: all remuneration expressed in terms
of money , express or implied, but does not
include: money value of house supplied, light,
water, medical, contribution to PF and
Pension fund, travelling allowance, gratuity
etc.
Sec 3: Revision of Minimum
Wages
State Govt can fix, revise and review at
intervals not exceeding 5 years
Minimum wage may be fixed for :
Minimum time rate
Minimum wage rate
Guaranteed time rate

If a dispute is pending before an industrial or
national tribunal under the ID Act
Where an award by such authority is in
operation
Notification is issued during the pendency of
the award

SEC4:STATUTORY MINIMUM WAGE
Basic rate of wages
and
Special allowance adjusted at intervals based on
variation in cost of living index number applicable to
workers
Or cash value of allowance in respect of essential
commodities at concessional rate
Or All Inclusive rate
Committees and sub committees to be
appointed
Proposal to be published by notification in
the official gazette to assess reaction from
people likely to be affected
Hear representations within two months
Take decision, publish revised wages in
official gazette
Revised wages come into effect within three
months of notification


Sec 7: Advisory Board
Sec 8: Central Advisory Board to advise State
Govt
Sec 9: Composition of Committees: no specific
directives about method to be followed
Sec 12: Payment of minimum rate of wages
Sec 13: Fixing hours of work: 9 hours for adults
Sec 14: Entitlement to overtime for extra hours
Sec 15: Full pay for day less hours of work in a
day unless due to unwillingness to work or
inadequate work given by employer


Sec 18: Maintenance of registers and records:
payments, overtime paid, deductions, rate of
wages, receipts
Sec 19: Authorities under the Act: Inspector
appointed by the state govt.
Powers of Inspector: Enter all premises, examine
records, examine any person on premises, require
information to be given, seize documents

Sec 20: Claims
Authorities to look into claims appointed by State
Govt
Who can claim:
Employee
Legal practitioner on his behalf
Inspector
Any person action with permission of the authority
On receipt of application, parties are heard, enquiry
is held, decision is given
Sec 22: Penalties: Employer can be punished with
imprisonment up to 6 months and fined
Sec 22B: Cognizance of Offences : No court can take
cognizance of an offence unless an application has been
made and the authority has sanctioned the making of the
complaint.


PAYMENT OF BONUS ACT 1965
http://hrylabour.gov.in/docs/labourActpdfdo
cs/Payment_of_Bonus_Act.pdf
All India
All establishments employing > 20 persons on
any day during the accounting year
Not applicable to public enterprises except
those operating in competition with pvt
undertakings
Applicable to banks
List of undertakings to certain classes of
employees to which the Act does not apply:
Ref. Page 689, Mamoria
State Govt may exempt for a specific period
by notification in the official gazette

Accounting year: the year ending on the day
on which accounts books of the corporation
are closed and balanced
Available Surplus: Gross profits as per Sec 4,
less sums deducted as per Sec 6
Allocable surplus: As per Sec 2(4) , a part of
available surplus

Computation of available surplus.
The available surplus in respect of any
accounting year shall be the gross profits for
that
year after deducting there from the sums
referred to in section 6
[Provided that the available surplus in respect
of the accounting year commencing on any
day in the year 1968 and in respect of every
subsequent accounting year shall be the
aggregate of

(a) the gross profits for that accounting year
after deducting there from the sums referred to
in section 6; and
(b) an amount equal to the difference between
(i) the direct tax, calculated in accordance with
the provisions of section 7, in respect of an
amount equal to the gross profits of the
employer for the immediately preceding
accounting year; and
(ii) the direct tax, calculated in accordance with

the provisions of section 7, in respect of an
amount equal to the gross profits of the
employer for such preceding accounting year
after deducting there from the amount of
bonus which the employer has paid or is
liable to pay to his employees in accordance
with the provisions of the Act for that year.]
Certain sums deductible from gross profits
Payment needs to be 67% of the allocable
surplus based on agreement in accordance
with Sec 194 of IT Act for companies other
than banking companies
For others, it is 60% of allocable surplus
All remuneration excluding overtime,
capable of being expressed in monetary
terms, including DA but does not include:
Allowances
Commission/Travelling commission
Value of house accommodation, HRA
Other bonus e.g. production, attendance
Contribution to pension
Gratuity, retirement benefit etc.
Computation of gross profits and allocable
profits: As specified in the schedule


Every employee who has worked for at least
30 days in the year
No entitlement if employee has committed
fraud, indulged in violence, theft,
misappropriation or sabotage in the
establishment
Employees can claim bonus under the Act
only from the sixth accounting year following
the year in which the employer sells goods
or profit is derived, whichever is earlier
Minimum bonus: 8.33% of wages and salary

Maximum bonus: If allocable surplus exceeds
the minimum bonus payable, the employer
has to pay maximum bonus of 20%
Set on and set off of allocable surplus
Where for any accounting year, the allocable surplus
exceeds the amount of maximum bonus payable to
the employees in the establishment under section 11:
the excess shall be carried forward for being set on
in the succeeding accounting year and so on up to
and inclusive of the fourth accounting year to be
utilised for the purpose of payment of bonus in the
manner illustrated in the Fourth Schedule.

To be paid within 8 months from the close of
the accounting year
DEDUCTIONS FROM BONUS
Amount of loss can be deducted if employee has
caused financial loss to employer or has been
found guilty of misconduct
Penalty for offences: Person who
contravenes the provisions of this act is
punishable with imprisonment for 6 months
and a fine

Maintenance of Records: Registers in the
prescribed form are to be maintained
showing computation of allocable surplus,
disbursement details.
Read Chapter 25, Mamoria