It is seen from the media reports that
there is a general impression that is being created that the Government is
bringing an amendment to the Payment of Wages Act to make mandatory the payment
of wages to the workers only through cheque or accounts transfers. This is not
the correct position.
It is clarified that the government
proposes to bring an amendment to Section 6 of the Payment of Wages Act which
will further provide crediting the wages in the bank account of the employees
or payment through cheque along with the existing provisions of payment in
current coin or currency notes.
This is being done to facilitate the
employers from making payment of wages using the banking facilities also in
addition to the existing modes of payment of wages in current coin or currency
notes.
Also, the appropriate Government (Centre
or State) will have to come up with the notification to specify the industrial
or other establishments where the employer shall pay wages through cheque or by
crediting the wages in employees’ bank account. It is, therefore, clear that
the option of payment through cash is still available with the employers for
payment of wages.
It may be understood that the Payment of
Wages Act was passed in the year 1936 (eighty years ago) and the situation
prevailing at that point of time has completely undergone a technological
revolution. Most of the transactions now take place through the banking
channels. The proposal of Ministry of Labour and Employment to bring an
amendment to Section 6 of the Act is an additional facility of crediting the
wages in the bank account of the employees or payment through cheque along with
the existing provisions of payment in current coin or currency notes.
The above proposed amendment will also
ensure that minimum wages are paid to the employees and their social security
rights can be protected. Thus the employers can no longer under-quote the
number of employees employed by them in their establishments to avoid becoming
a subscriber to the EPFO or ESIC schemes.
It is also pointed out that the states
like Andhra Pradesh/Telangana, Kerala, Uttarakhand, Punjab and Haryana have
already come out with notifications to provide for payment through banking
channels.
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