LexThe PAYMENT OF WAGES ACT, 1936
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10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
INDEX
10 (1) THE PAYMENT OF WAGES ACT, 1936
Section Description Page
Introduction 365
1. Short title, extent, commencement and applicatio n 368
2. Definitions 369
3. Responsibility for payment of wages 372
4. Fixation of wage-periods 373
5. Time of payment of wages 373
6. Wages to be paid in current coin or currency not es 374
7. Deductions which may be made from wages 374
8. Fines 379
9. Deductions for absence from duty 380
10. Deductions for damage or loss 381
11. Deductions for services rendered 382
12. Deductions for recovery of advances 382
12A. Deductions for recovery of loans 382
13. Deductions for payments to co- operative societies and
insurance schemes
382
13A. Maintenance of registers and records 383
14. Inspectors 383
14A. Facilities to be afforded to Inspectors 384
15. Claims arising out of deductions from wages or dela y in
payment of wages and penalty for malicious or vexat ious
claims
384
16. Single application in respect of claims from un paid group. 389
17. Appeal 389
17A. Conditional attachment of property of employer or o ther
person responsible for payment of wages
391
18. Powers of authorities appointed under section 1 5 392
19. [Repealed] 392
20. Penalty for offences under the Act 392
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
Section Description Page
21. Procedure in trial of offences 394
22. Bar of suits 396
22A. Protection of action taken in good faith 396
23. Contracting out 396
24. Delegation of powers 396
25. Display by notice of abstracts of the Act 397
25A. Payment of un-disbursed wages in cases of death of
employed person
397
26. Rule-making power 397
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
THE PAYMENT OF WAGES ACT, 1936
INTRODUCTION
With the growth of industries in India, problems r elating to payment of wages
to persons employed in industry took an ugly turn. The industrial units were riot
making payment of wages to their workers at regular intervals and wages were
not uniform. The industrial workers were forced to raise their heads against their
exploitation.
In 1926, Government of India wrote to local govern ments to ascertain the
position with regard to the delays which occurred i n the payment of wages to the
persons employed in Industry. Material so collected was placed before the Royal
Commission on Labour which was appointed in 1929. O n the report of the
Commission, Government of India re-examined the sub ject and in February,
1933 the Payment of Wages Bill, 1933, was introduce d in the Legislative
Assembly and circulated for the purpose of-elicitin g opinions. A motion for the
reference of the Bill to a Select Committee was tab led but the motion could not
be passed and the Bill lapsed. In 1935 the Payment of Wages Bill, based upon
the same principles as the earlier Bill of 1933 but thoroughly revised was
introduced in the Legislative Assembly on 15th Febr uary, 1935. The Bill was
referred to the Select Committee. The Select Commit tee presented its report on
2nd September, 1935. Incorporating the recommendati ons of the Select
Committee, the Payment of Wages Bill, 1935 was agai n introduced in the
Legislative Assembly.
STATEMENT OF OBJECTS AND REASONS
In 1926 the Government of India addressed local go vernments with a view to
ascertain the position with regard to the delays wh ich occurred in the payment of
wages to persons employed in industry, and the prac tice of imposing fines on
them. The investigations revealed the existence of abuses in both directions and
the material collected was placed before the Royal Commission on Labour which
was appointed in 1929. The Commission collected fur ther evidence on the
subject and the results of their examination with t heir recommendations will be
found on pages 216-221 and 236-241 of their Report. The Government of India
re-examined the subject in the light of the Commiss ion’s Report and in February,
1933 a Bill embodying the conclusions then reached was introduced and
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
circulated for the purpose of eliciting opinion. A motion for the reference of the
Bill to a Select Committee was tabled during the De lhi session of 1933-34, but
was not reached, and the Bill lapsed. The present B ill is based upon the same
principles as the original but has been revised thr oughout in the light of the
criticisms received when die original Bill was circulated.
ACT 4 OF 1936
The Payment of Wages Bill, 1935 having been passed by the Legislative
Assembly received its assent on 23rd April, 1936. It came on the Statute Book as
THE PAYMENT OF WAGES ACT, 1936 (4 of 1936).
LIST OF AMENDING ACTS, ORDINANCE AND ADAPTATION OR DERS
1. The Government of India (Adaptation of Indian La ws) Order, 1937.
2. The Repealing and Amending Act, 1937 (20 of 1937 ).
3. The Payment of Wages (Amendment) Act, 1937 (22 o f 1937).
4. The Payment of Wages (Amendment) Ordinance, 1940 (3 of 1940).
5. The Indian Independence (Adaptation of Central A cts and Ordinances) Order,
1948.
6. The Adaptation of Laws Order, 1950.
7. The Part B States (Laws) Act, 1951 (3 of 1951).
8. The Payment of Wages (Amendment) Act, 1957 (68 o f 1957).
9. The Payment of Wages (Amendment) Act, 1964 (53 o f 1964).
10. The Central Labour Laws (Extension to Jammu and Kashmir) Act, 1970 (51
of 1970).
11. The Repealing and Amending Act, 1974 (56 of 1974).
12. The Payment of Wages (Amendment) Act, 1976 (29 of 1976).
13. The Payment of Wages (Amendment) Act, 1977 (19 of 1977).
14. The Payment of Wages (Amendment) Act, 1982 (38 of 1982).
15. The Payment of Wages (Amendment) Act, 2005 (41 of 2005).
STATEMENT OF OBJECTS AND REASONS
Relating to the Amendment of 2005
The Payment of Wages Act, 1936 was enacted with a view to ensuring that
wages payable to employed persons covered by the Ac t were disbursed by the
employers within the prescribed time limit and that no deductions other than
those authorised by law were made by them. The last amendment was made in
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
1982 and several provisions of the Act have become obsolete over the years.
Many proposals have been received by the Government for amending various
provisions which are creating practical difficultie s in enforcement of this Act. In
order to bring this law in uniformity with other la bour laws as also to make it more
effective and practicable, it is proposed to make, inter alia, the following
changes:—
(i) Enhancing the wage ceiling of Rs. 1600 per mont h to Rs. 6500 per
month: The then existing ceiling of Rs. 1000 per month was last revised to
Rs, 1600 per month in 1982. Since then a large numb er of employed persons
have gone out of the purview of the Act due to succ essive rise in wages
levels resulting from rise in the cost of living. T hus, with a view to covering
more employed persons, it is proposed to enhance th e wage ceiling from Rs.
1600 per month to Rs. 6500 per month.
(ii) To substitute the expressions “the Central Gov ernment” or “a State
Government” by the expression “appropriate Governme nt”: In
Parliamentary enactments relating to labour, other than the Payment of
Wages Act, 1936, the enforcing authorities are either the Central Government
or the State Governments depending upon the nature of industry. However,
for implementing the Payment of Wages Act, 1936, ma tters are referred to
the State Governments and quite often action requir ed to be taken by them is
delayed. In order that this law is in conformity wi th the other labour laws, it is
proposed to introduce the concept of “appropriate Government”.
(iii)Removing the ambiguities/weakness from the ext ant provisions of the
Act and prescribing more effective grievance redressal: Over the years, it
has been noticed that certain provisions of the Act have been differently
interpreted thus leading fo administrative difficul ties in implementing the
same. In order to remove ambiguities, appropriate c hanges are being
proposed in sections 3, 7, 8 and 15 of the Act whic h respectively deal with
responsibility for payment of wages, deductions fro m wages fines and claims
in certain cases.
(iv)Strengthening compensation and penal provisions of the Act: The penal
provisions of the Act have become almost insignific ant due to passage of
time as well as decrease in money value since these provisions were last
amended in 1982. It is, therefore, proposed to make the penal provisions
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
more stringent by enhancing the quantum of penaltie s by amending section
20 of the Act.
2. The Bill seeks to achieve the above objects.
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
THE PAYMENT OF WAGES ACT, 1936 1
(4 of 1936)
[23rd April, 1936]
An Act to regulate the payment of wages of certain classes of 2[employed
persons],
whereas it is expedient to regulate the payment of wages to certain classes of
2[employed persons].
It is hereby enacted as follows:—
1. Short title, extent, commencement and applicati on.—
(1) This Act may be called the Payment of Wages Act, 1936.
3[(2) It extends to the whole of India 4[***]].
(3) It shall come into force on such date 5 as the Central Government may, by
notification in the Official Gazette, appoint.
(4) It applies in the first instance to the payment of wages to persons
employed in any 6[factory, to persons] employed (otherwise than in a
factory) upon any railway by a railway administrati on or, either directly or
through a sub-contractor, by a person fulfilling a contract with a railway
administration 7 [and to persons employed in an industrial or other
establishment specified in sub-clauses (a) to (g) o f clause (ii) of section
2].
(5) 8[The Appropriate Government] may, after giving thre e months’ notice of
its intention of so doing, by notification in the O fficial Gazette, extend the
provisions of 9[this Act] or any of them to the payment of wages t o any
1 For Statement of Objects and Reasons see Gazette of In dia, 1935, Pt. V, p. 20; for Report of
Select Committee see Gazette of India, Pt. V, p. 77.
2 Subs. by Act 38 of 1982, sec. 2 for “persons employed in industry” (w.e.f. 15-10-1982).
3 Subs. by me Adaptation of Laws Order, 1950, for su b-section (2).
4 The words “except the State of Jammu and Kashmir” Sub s. by Act 3 of 1951, sec. 3 and Sch.
for the words “except Part B States” which were subseq uently omitted by Act 51 of 1970, sec.
2 and Sch. (w.e.f. 1-9-1971).
5 Came into force on 28-3-1937, see Gazette of India, 1937, Pt. I, p. 626.
6 Subs. by Act 38 of 1982, sec. 3, for “factory and to persons” (w.e.f. 15-10-1982),
7 Ins. by Act 38 of 1982, sec. 3 (w.e.f. 15-10-1982).
8 Subs. by Act 41 of 2005, sec. 3 for “The State Govern ment” (w.e.f. 9-11-2005).
9 Subs. by Act 68 of 1957, sec. 2, for “the Act” (w.e.f . 1-4-1958).
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
class of persons employed in 1 [any establishment or class of
establishments specified by 2[the appropriate Government] under sub-
clause (h) of clause (ii) of section 2]:
3[Provided that in relation to any such establishmen t owned by the Central
Government, no such notification shall be issued except with the concurrence
of that Government.]
4[(6) This Act applies to wages payable to an employed person in respect of a
a wage period if such wages for that wage period do not exceed six
thousand five hundred rupees per month or such othe r higher sum which,
on the basis of figures of the Consumer Expenditure Survey published by
the National Sample Survey Organisation, the Centra l Government may,
after every five years, by notification in the Official Gazette, specify.]
The Central Government [vide S.O. 1380(E), dated 8 th August, 2007] specifies,
on the basis of figures of the C0nsumer Expenditure Survey published by the
National Sample Survey Organisation, the wages ref erred to in sub-section (6)
as ten thousand rupees per month.
2. Definitions. —In this Act, unless there is anything repugnant in the subject or
context.—
5[(i)“appropriate Government” means, in relation to railways, air transport
services, mines and oilfields, the Central Governme nt and, in relation to
all other cases, the State Government;]
1[2[(ia) “employed person” includes the legal represen tative of a deceased
employed person;
(ib) “employer” includes the legal representative of a deceased employer;
1 Subs. by Act 38 of 1982, sec. 3, for “any industrial establishment or in any class or group of
industrial establishments” (w.e.f. 15-10-1982).
2 Subs. by Act 41 of 2005, sec. 3, for “the Central Go vernment or a State Government” (w.e.f. 9-
11-2005).
3 Subs. by Act 38 of 1982, sec. 3, for proviso (w.e.f. 1 5-10-1982).
4 Subs. by Act 41 of 2005, sec. 2, for sub-section “(6) Nothing in this Act shall apply to wages
payable in respect of a wage-period which over such wag e-period, average one thousand sis
hundred rupees a month or more” (w.e.f. 9-11-2005).
5 Ins. by Act 41 of 2005, sec. 4(a) (w.e.f. 9-11-2005) .
Comments
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
(ic) “factory” means a factory as defined in claus e (m) of section 2 of the
Factories Act, 1948 (63 of 1948) and includes any p lace to which the
provisions of that Act have been applied under sub- section (1) of section
85 thereof;]
(ii) 3[“ Industrial or other establishment” means] any—
4[(a) tramway service, or motor transport service en gaged in carrying
passengers or goods or both by road for hire or reward;
(aa) air transport service other than such service belonging to, or
exclusively employed in the military, naval or air forces of the Union or
the Civil Aviation Department of the Government of India;]
(b) dock, wharf or jetty;
5[(c)inland vessel, mechanically propelled;]
(d)mine, quarry or oil-field;
(e)plantation;
(f) workshop or other establishment in which articl es are produced,
adapted or manufactured, with a view to their use, transport or sale;
6 (g) establishment in which any work relating to the construction,
development or maintenance of buildings, roads, bri dges or canals, or
relating to operations connected with navigation, i rrigation or the
supply of water or relating to the generation, tran smission and
distribution of electricity or any other form of po wer is being carried
on;]
7 [(h) any other establishment or class of establishm ents which 8 [the
appropriate Government] may, having regard to the n ature thereof,
the need for protection of persons employed therein and other
relevant circumstances, specify, by notification in the Official Gazette;]
1 Clauses (i), (ia| and (ib) Subs. by Act 53 of 1964, sec. 3 for clause (i) (w.e.f. 1-2-1965).
2 Clauses (i), (iii) and (ib) renumbered as clauses (ia ), (ib) and (ic) by Act 41 of 2005, sec. 4(a)
(w.e.f. 9-11-2005).
3 Subs. by Act 38 of 1982, sec. 3, for “industrial estab lishment” means’ (w.e.f. 15-10-1982).
4 Subs by Act 53 of 1964, sec. 3, for sub-clause (a) (w.e .f. 1-2-1965).
5 Subs. by Act 68 of 1957, sec. 3, for sub-clause (c) (w.e .f. 1-4-1958).
6 Ins. by Act 68 of 1957, sec. 3 (w.e.f. 1-4-1958).
7 Ins. by Act 38 of 1982, sec. 4 (w.e.f. 15-10-1982).
8 Subs. by Act 41 of 2005, sec. 3, for “the Central Go vernment or a State Government” (w.e.f. 9-
11-2005).
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
1[(iia) “mine” has the meaning assigned to it in cla use (j) of sub-section (1) of
section 2 of the Mines Act, 1952 (35 of 1952);]
2[(iii) “plantation” has the meaning assigned to it in clause (f) of section
2 of the Plantations Labour Act, 1951 (69 of 1951);]
(iv) “prescribed” means prescribed by rules made un der this Act;
3[(v) “railway administration” has the meaning assig ned to it in clause (32) of
section 2 of the Railways Act, 1989 (24 of 1989);]
4[(vi) “wages” means all remuneration (whether by wa y of salary, allowances,
or otherwise) expressed in terms of money or capabl e of being so
expressed which would, if the terms of employment, express or implied,
were fulfilled, be payable to a person employed in respect of his
employment or of work done in such employment, and includes—
(a) any remuneration payable under any award or set tlement between the
parties or order of a Court;
(b) any remuneration to which the person employed i s entitled in respect
of overtime work or holidays or any leave period;
(c) any additional remuneration payable under the t erms of employment
(whether called a bonus or by any other name);
(d) any sum which by reason of the termination of e mployment of the
person employed is payable under any law, contract or instrument
which provides for the payment of such sum, whether with or without
deductions, but does not provide for the time withi n which the
payment is to be made;
(e) any sum to which the person employed is entitle d under any scheme
framed under any law for the time being in force, b ut does not
include—
(1) any bonus (whether under a scheme of profit sha ring or otherwise)
which does not form part of the remuneration payabl e under the
terms of employment or which is not payable under a ny award or
settlement between the parties or order of a Court;
1 Ins. by Act 53 of 1964, sec. 3 (w.e.f. 1-2-1965).
2 Subs. by Act 53 of 1964, sec. 3, for clause (iii) (w.e .f. 1-2-1965).
3 Subs. by Act 41 of 2005, sec. 4(b), for clause “(v) “ra ilway administration” has the meaning
assigned to it in clause (6) of section 3 of the Indian R ailways Act, 1890 (9 of 1890), and”
(w.e.f. 9-11-2005).
4 Subs. by Act 68 of 1957, sec. 3, for clause (vi) (w.e.f . 1-4-1958).
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
(2) the value of any house-accommodation, or of the supply of light,
water, medical attendance or other amenity or of an y service
excluded from the computation of wages by a general or special
order of 1[the appropriate Government];
(3) any contribution paid by the employer to any pe nsion or provident
fund, and the interest which may have accrued thereon;
(4) any travelling allowance or the value of any travelling concession;
(5) any sum paid to the employed person to defray s pecial expenses
entailed on him by the nature of his employment; or
(6) any gratuity payable on the termination of empl oyment in cases
other than those specified in sub-clause (d).]
2[3. Responsibility for payment of wages.—
(1) Every employer shall be responsible for the payment of all wages required
to be paid under this Act to persons employed by hi m and in case of
persons employed,—
(a) in factories, if a person has been named as the manager of the factory
under clause (f) of sub-section (1) of section 7 of the Factories Act,
1948 (63 of 1948);
(b) in industrial or other establishments, if there is a person responsible to
the employer for the supervision and control of the industrial or other
establishment;
1 Subs. by Act 41 of 2005, sec- 3, for “the State Gover nment” (w.e.f. 9-11-2005).
2 Subs. by Act 41 of 2005, sec. 5, for section “3. Respon sibility for payment of wages.— Every
employer shall be responsible for the payment to pers ons employed by him of all wages
required to be paid under this Act:
Provided that, in the case of persons employed (otherwise than by a contractor)—
(a) in factories, if a person has been named as the man ager of the factory under clause (f) of sub-
section (1) of section 7 of the Factories Act, 1948 (63 of 1948);
(b) in industrial or other establishments, if there i s a person responsible to the employer for the
supervision and control of the industrial or other establishments;]
(c) upon railways (otherwise than in factories), if th e employer is the railway administration and the
railway administration has nominated a person in this behalf for the local area concerned, the
person so named, the person so responsible to me employer , or the person so nominated, as
the case may be shall also be responsible for such payment” (w.e.f. 9-11-2005).
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
(c) upon railways (other than in factories), if the employer is the railway
administration and the railway administration has n ominated a person
in this behalf for the local area concerned;
(d) in the case of contractor, a person designated by such contractor who
is directly under his charge; and
(e) in any other case, a person designated by the e mployer as a person
responsible for complying with the provisions of the Act; the person so
named, the person responsible to the employer, the person so
nominated or the person so designated, as the case may be, shall be
responsible for such payment.
(2) Notwithstanding anything contained in sub-secti on (1), it shall be the-
responsibility of the employer to, make payment of all wages required to
be made under this Act in case the contractor or th e person designated
by the employer fails to make such payment.]
4. Fixation of wage-periods. —
(1) Every person responsible for the payment of wag es under section 3 shall
fix periods (in this Act referred to as wage-period ) in respect of which
such wages shall be payable.
(2) No wage-period shall exceed one month.
5. Time of payment of wages. —
(1) The wages of every person employed upon or in—
(a) any railway, factory or
1[industrial or other establishment] upon or in
which less than one thousand persons are employed, shall be paid
before the expiry of the seventh day,
(b) any other railway, factory or ‘[industrial or o ther establishment], shall
be paid before the expiry of the tenth day,
after the last day of the wage-period in respect of which the wages are
payable:
2[Provided that in the case of persons employed on a dock, wharf or jetty or in
a mine, the balance of wages found due on completio n of the final tonnage
account of the ship or wagons loaded or unloaded, a s the case may be, shall
1 Subs. by Act 38 of 1982, sec. 6, for “industrial estab lishment” (w.e.f. 15-10-1982).
2 Ins. by Act 68 of 1957, sec. 5 (w.e.f. 1-4-1958).
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
be paid before the expiry of the seventh day from t he day of such
completion.]
(2) Where the employment of any person is terminate d by or on behalf of the
employer, the wages, earned by him shall be paid be fore the expiry of the
second working day from the day on which his employment is terminated:
1[Provided that where the employment of any person i n an establishment is
terminated due to the closure of the establishment for any reason other than
a weekly or other recognised holiday, the wages ear ned by him shall be paid
before the expiry of the second day from the day on which his employment is
so terminated.]
(3) The
2 [ 3 [appropriate Government] may, by general or special order,
exempt, to such extent and subject to such conditio ns as may be
specified in the order, the person responsible for the payment of wages to
persons employed upon any railway (otherwise than i n a factory) 4[or to
persons employed as daily-rated workers in the Publ ic Works Department
of the Central Government or the State Government] from the operation
of this section in respect of the wages of any such persons or class of
such persons:
5[Provided that in the case of persons employed as d aily-rated workers as
aforesaid, no such order shall be made except in co nsultation with the
Central Government.]
(4)
6[Save as otherwise provided in sub-section (2), all payments] of wages
shall be made on a working day.
6. Wages to be paid in current coin or currency not es.— All wages shall be
paid in current coin or currency notes or in both:
7[Provided that the employer may, after obtaining th e written authorisation of
the employed person, pay him the wages either by ch eque or by crediting the
wages in his bank account.]
1 Added by Act 53 of 1964, sec. 5 (w.e.f. 1-2-1965).
2 Subs. by the A.O. 1937, for “Governor-General in C ouncil”.
3 Subs. by Act 41 of 2005, sec. 3, for “the State Gover nment” (w.e.f. 9-11-2005).
4 Subs. by Act 38 of 1982, sec. 6, for “industrial estab lishment” (w.e.f. 15-10-1982).
5 Ins. by Act 53 of 1964, sec. 5 (w.e.f. 1-2-1965).
6 Subs. by Act 53 of 1964, sec. 5, for “All payments” ( w.e.f. 1-2-1965).
7 Ins. by Act 29 of 1976, sec. 3 (w.r.e.f. 12-11-1975) .
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
7. Deductions which may be made from wages.—
(1) Notwithstanding the provisions of 1[the Railways Act, 1989 (24 of 1989)]
the wages of an employed person shall be paid to hi m without deductions
of any kind except those authorised by or under this Act.
2[Explanation I ].—Every payment made by the employed person to the
employer or his agent shall, for the purposes of th is Act, be deemed to be a
deduction from wages.
Explanation II.—Any loss of wages resulting from the imposition, for good and
sufficient cause, upon a person employed of any of the following penalties,
namely:—
(i) the withholding of increment or promotion (incl uding the stoppage of
increment at an efficiency bar);
(ii) the reduction to a lower post or time scale or to a lower stage in a time
scale; or
(iii) suspension; shall not be deemed to be a deduction from wages in any
case where the rules framed by the employer for the imposition of any
such penalty are in conformity with the requirements, if any, which
may be specified in this behalf by the State Government by
notification in the Official Gazette.]
(2) Deductions from the wages of an employed person shall be made only in
accordance with the provisions of this Act, and may be of the following
kinds only, namely:—
(a) fines;
(b) deductions for absence from duty;
(c) deductions for damage to or loss of goods expre ssly entrusted to the
employed person for custody, or for loss of money f or which he is
required to account, where such damage or loss is directly attributable
to his neglect or default;
3[(d) deductions for house-accommodation supplied by the employer or by
by Government or any housing board set up under any law for the
time being in force (whether the Government or the board is the
1 Subs. by Act 41 of 2005, sec. 6(a) for “sub-section (2 ) of section 47 of the Indian Railways Act,
1890 (9 of 1890)” (w.e.f. 9-11-2005).
2 Explanation re-numbered as Explanation I by Act 68 of 1957, sec. 5 (w.e.f. 1-4-1958).
3 Subs. by Act 68 of 1957, sec. 5, for clause (d) (w.e.f . 1.4.1958).
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
employer or not) or any other authority engaged in the business of
subsidising house-accommodation which may be specif ied in this
behalf by the State Government by notification in the Official Gazette;]
(e) deductions for such amenities and services supp lied by the employer
as the 1[***] State Government 2[or any officer specified by it in this
behalf] may, by general or special order, authorise;
Explanation.—The word “services” in 3 [this clause] does not include the
supply of tools and raw materials required for the purposes of employment;
4 [(f)deductions for recovery of advances of whatever nature (including
advances for travelling allowance or conveyance all owance), and the
interest due in respect thereof, or for adjustment of over-payments of
wages;
(ff) deductions for recovery of loans made from any fund constituted for the
welfare of labour in accordance with the rules appr oved by the Stale
Government, and the interest due in respect thereof;
(fff)deductions for recovery of loans granted for h ouse-building or other
purposes approved by the State Government, and the interest due in
respect thereof;]
(g) deductions of income-tax payable by the employed person;
(h) deductions required to be made by order of a Co urt or other authority
competent to make such order;
(i) deductions for subscriptions to, and for repaym ent of advances from any
provident fund to which the Provident Funds Act, 19 25 (19 of 1925),
applies or any recognized provident fund as defined 5[in clause (38) of
section 2 of the Income-tax Act, 1961 (43 of 1961)] or any provident fund
approved in this behalf by 6[the appropriate Government], during the
continuance of such approval; 7[***]
1 The words “Governor-General in Council or” omitted by the A.O. 1937.
2 Ins. by Act 53 of 1964, sec. 6 (w.e.f. 1-2-1965).
3 Subs. by Act 56 of 1974, sec. 3 and Sch. II, for “thi s sub-clause”.
4 Subs. by Act 53 of 1964, sec. 6, for clause (f) (w.e.f . 1-2-1965).
5 Subs. by Act 41 of 2005, sec. 6(b), for “in section 58 A of the Indian Income-tax Act,
1922 (11 of 1922)” (w.e.f. 9-11-2005).
6 Subs. by Act 41 of 2005, sec. 3, for “the State Gover nment” (w.e.f. 9-11-2005).
7 The word “and” omitted by Ordinance 3 of 1940, sec. 2.
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
(j) deductions for payments to co-operative societi es as approved by 6[the
appropriate Government] 1[or any officer specified by it in this behalf] or to
a scheme of insurance maintained by the Indian Post Office; 2[and]
3[4[(k) deductions, made with the written authorisation of the person employed
employed for payment of any premium on his life ins urance policy to the
Life Insurance Corporation of India established und er the Life Insurance
Corporation Act, 1956 (31 of 1956), or for the purc hase of securities of
the Government of India or of any State Government or for being
deposited in any Post Office Savings Bank in furthe rance of any savings
scheme of any such Government;]]
5 [(kk) deductions made, with the written authorisati on of the employed
person, for the payment of his contribution to any fund constituted by the
employer or a trade union registered under the Trad e Unions Act, 1926
(16 of 1926), for the welfare of the employed perso ns or the members of
their families, or both, and approved by 6[the appropriate Government] or
any officer specified by it in this behalf, during the continuance of such
approval.
(kkk) deductions made, with the written authorisation of the employed person,
for payment of the fees payable by him for the memb ership of any trade
union registered under the Trade Unions Act, 1926 (16 of 1926);]
7 [(l) deductions, for payment of insurance premia on Fidelity Guarantee
Bonds;
(m) deductions for recovery of losses sustained by a railway administration
on account of acceptance by the employed person of counterfeit or base
coins or mutilated or forged currency notes;
(n) deductions for recovery of losses sustained by a railway administration on
account of the failure of the employed person to in voice, to bill, to collect
or to account for the appropriate charges due to th at administration,
whether in respect of fares, freight, demurrage, wh arfage and carnage or
1 Ins. by Act 53 of 1964, sec. 6 (w.e.f. 1-2-1965).
2 Added by Ordinance 3 of 1940, sec. 2.
3 Added by Ordinance 3 of 1940, sec. 2.
4 Subs. by Act 68 of 1957, sec. 5, for clause (k) (w.e.f. 1-4-1958).
5 Ins. by Act 38 of 1982, sec. 7 (w.e.f. 15-10-1982).
6 Subs. by Act 41 of 2005, sec. 3, for “the State Gover nment” (w.e.f. 9-11-2005).
7 Ins. by Act 53 of 1964, sec. 6 (w.e.f. 1-2-1965).
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
in respect of sale of food in catering establishmen ts or in respect of sale
of commodities ingrain shops or otherwise;
(o) deductions for recovery of losses sustained by a railway administration on
account of any rebates or refunds incorrectly grant ed by the employed
person where such loss is directly attributable to his neglect or default;]
1[(p) deductions, made with the written authorisatio n of the employed person,
for contribution to the Prime Minister’s National R elief Fund or to such
other Fund as the Central Government may, by notifi cation in the Official
Gazette, specify;]
2[(q) deductions for contributions to any insurance scheme framed by the
Central Government for the benefit of its employees.]
3 [(3)Notwithstanding anything contained in this Act, the total amount of
deductions which may be made under sub-section (2) in any wage-period
from the wages of any employed person shall not exceed—
(i) in cases where such deductions are wholly or pa rtly made for
payments to co-operative societies under clause (j) of sub-section (2),
seventy- five per cent, of such wages, and
(ii) in any other case, fifty per cent, of such wag es; Provided that where
the total deductions authorised under sub-section ( 2) exceed seventy-
five per cent, or, as the case may be, fifty per ce nt, of the wages, the
excess may be recovered in such manner as may be prescribed.
(4) Nothing contained in this section shall be cons trued as precluding the
employer from recovering from the wages of the empl oyed person or
otherwise any amount payable by such person under a ny law for the time
being in force other than 4[the Railways Act, 1989 (24 of 1989)].
(i) The requirement of making deposit at the time of filing of appeal does not
destroy the remedy of the appeal; Nagar Palika v. P rescribed Authority,
(1992) 64 FLR 1005 (All).
1 Ins. by Act 29 of 1976, sec. 4 (w.e.f. 12-11-1976).
2 Ins. by Act 19 of 1977, sec. 2 (w.e.f. 30-6-1977).
3 Ins. by Act 53 of 1964, sec. 7 (w.e.f. 1-2-1965).
4 Subs. by Act 41 of 2005, sec. 6(c), for “the Indian R ailways Act, 1890 (9 of 1890)”
(w.e.f. 9-11-2005).
Case Law
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
(ii) If the workman did not work, although the work was offered to him, he is not
entitled to wages; Modi Industries v. State of Utta r Pradesh, (1992) 64 FLR
471 (All).
(iii) The prescribed Authority has been conferred p ower to entertain the
application even beyond the period of 12 months; Ra hat Hussain Khan v.
Third Addl. District Judge, (1992) 64 FLR 302 (All).
(iv) Compensation up to 10 times cannot be granted in case of back wages
awarded by the Industrial Tribunal; Municipal Counc il v. Khubilal, (1992) 64
FLR 752 (Raj).
(v) An employer can deduct the wages under section 7(2)(b) of the Act for
absence from duty. Absence from duty by an employee must be on his own
volition and it cannot cover his absence when he is forced by circumstances
created by the employer from carrying out his duty- In the case in hand as the
absence of the employees was not voluntary in as mu ch as they were not
allowed to resume their work without signing the gu arantee bond no
deduction can be made under the Act; French Motor C ar Co. Ltd. Workers
Union v. French Motor Car Co. Ltd; (1990) LLR 366;
(vi) It is well-settled that “go-slow” is a serious misconduct being a covert and a
more damaging breach of the contract of employment; Bank of India v. T.S.
Kelawala, (1990) LLR 313 (SC).
(vii) If the absence from duty is due to coercion a nd the workman is not a
consenting party, then the management has no power to deduct wages;
Kothari (Madras) Ltd. v. Second Addl. District judg e-cum-Appellate Authority;
(1990) 76 FJR 209 (AP).
(viii)The workman cannot be denied the wages when h e reports himself on duty
but the work is not taken from him by the employer; J.D.A. v. Labour Centre,
(1990) 60 FLR 81 (Raj).
(ix) Appeal is not made to a personal designation b ut to a court. Revision lies
against the appellate order to the High Court; Bhar atpur Central Co-op. Bank
Ltd. v. Rattan Singh, (1990) II CLR 516 (Raj).
8. Fines.—
(1) No fine shall be imposed on any employed person save in respect of such
acts and omissions on his part as the employer, wit h the previous
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
approval of 1[the appropriate Government] or of the prescribed a uthority,
may have specified by notice under sub-section (2).
(2) A notice specifying such acts and omissions sha ll be exhibited in the
prescribed manner on the premises in which the empl oyment is carried
on or in the case of persons employed upon a railway (otherwise than in a
factory), at the prescribed place or places.
(3) No fine shall be imposed on any employed person until he has been given
an opportunity of showing cause against the fine, o r otherwise, than in
accordance with such procedure as may be prescribed for the imposition
of fines.
(4) The total amount of fine which may be imposed i n any one wage-period
on any employed person shall not exceed an amount e qual to 2[three per
cent, of the wages] payable to him in respect of that wage-period.
(5) No fine shall be imposed on any employed person who is under the age of
fifteen years.
(6) No fine imposed on any employed person shall be recovered from him by
instilments or after the expiry of ninety days) fro m the day on which it was
imposed.
(7) Every fine shall be deemed to have been imposed on the day of the act or
omission in respect of which it was imposed.
(8) All fines and all realisations thereof shall be recorded in a register to be
kept by the person responsible for tine payment of wages under section 3
in such form as may be prescribed; and all such rea lisations shall be
applied only to such purposes beneficial to the per sons employed in the
factory or establishment as are approved by the prescribed authority.
Explanation.— When the persons employed upon or in any railway, factory or
3[industrial or other establishment] are part only o f a staff employed under the
same management, all such realisations may be credi ted to a common fund
maintained for the staff as a whole, provided that the fund shall be applied only to
such purposes as are approved by the prescribed authority.
STATE AMENDMENT
1 Subs. by Act 41 of 2005, sec. 3, for “the State Gover nment” (w.e.f. 9-11-2005).
2 Subs. by Act 33 of 1982, sec.8, for “half-an-anna in the rupee” (w.e.f. 15-10-1982).
3 Subs. by Act 38 of 1982, sec.8, for “industrial establ ishment” (w.e.f. 15-10-1982).
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
Punjab, Haryana. —See Proviso II lo section 10(2) of the Punjab Labo ur Welfare
Fund Act, 1965 (Punjab Act 17 of 1965) and Act 31 of 1966, sec. 88.
9. Deductions for absence from duty.—
(1) Deductions may be made under clause (b) of sub- section (2) of section 7
only on account of the absence of an employed perso n from the place or
places where, by the terms of his employment, he is required to work,
such absence being for the whole or any part of the period during which
he is so required to work.
(2) The amount of such deduction shall in no case b ear to the wages payable
to the employed person in respect of the wage-perio d for which the
deduction is made a large proportion than the perio d for which he was
absent bears to the total period, within such wage- period, during which by
the terms of his employment, he was required to work:
Provided that, subject to any rules made in this behalf by
1[the appropriate
Government], if ten or more employed persons acting in concert absent
themselves without due notice (that is to say witho ut giving the notice
which is required under the terms of their contract s of employment) and
without reasonable cause, such deduction from any s uch person may
include such amount not exceeding his wages for eig ht days as may by
any such terms be due to the employer in lieu of due notice.
2[Explanation.—For the purposes of this section, an e mployed person shall
be deemed to be absent from the place where he is r equired to work if,
although present in such place, he refuses, in purs uance of a stay-in strike or
for any other cause which is not reasonable in the circumstances, to carry out
his work.]
10. Deductions for damage or loss.—
3[(1) A deduction under clause (c) or clause (o) of sub-section (2) of section 7
shall not exceed the amount of the damage or loss c aused to the
employer by the neglect or default of the employed person.
(1A)A deduction shall not be made under clause (c) or clause (m) or clause
(n) or clause (o) of sub-section (2) of section 7 u ntil the employed person
1 Subs. by Act 41 of 2005, sec. 3, for “the State Gover nment” (w.e.f. 9-11-2005).
2 Added by Act 22 of 1937, sec. 2.
3 Subs. by Act 53 of 1964, sec. 7, for sub-section (1) (w .e.f. 1-2-1965).
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
has been given an opportunity of showing cause against the deduction, or
otherwise than in accordance with such procedure as may be prescribed
for the making of such deductions.]
(2) All such deductions and all realisations thereo f shall be recorded in a
register to be kept by the person responsible for t he payment of wages
under section 3 in such form as may be prescribed.
11. Deductions for services rendered.— A deduction under clause (d) or clause
(e) of sub-section (2) of section 7 shall not be ma de from the wages of an
employed person, unless the house-accommodation ame nity or service has
been accepted by him, as a term of employment or ot herwise, and such
deduction shall not exceed an amount equivalent to the value of the house-
accommodation amenity or service supplied and, in t he case of a deduction
under the said clause (e), shall be subject to such conditions as 1[***] 2[the
appropriate Government] may impose.
12. Deductions for recovery of advances. —Deductions under clause (f) of
sub-section (2) of section 7 shall be subject to th e following conditions,
namely:—
(a) recovery of an advance of money given before e mployment began shall
be made from the first payment of wages in respect of a complete wage-
period, but no recovery shall be made of such advan ces given for
travelling expenses;
3[(aa)recovery of an advance of money given after em ployment began shall
be subject to such conditions as 4[the appropriate Government] may
impose;]
(b) recovery of advances of wages not already earne d shall be subject to any
rules made by 5[the appropriate Government] regulating the extent to
which such advances may be given and the installmen ts by which they
may be recovered.
1 The words “the Governor-General in Council or” omit ted by the A.O. 1937.
2 Subs. by Act 41 of 2005, sec. 3, for “the State Gover nment” (w.e.f. 9-11-2005).
3 Ins. by Act 53 of 1964, sec. 8 (w.e.f. 1-2-1965).
4 Subs. by Act 41 of 2005, sec. 3, for “the State Gover nment” (w.e.f. 9-11-2005).
5 Subs. by Act 41 of 2005, sec. 3, for “the State Gover nment” (w.e.f. 9-11-2005).
10 (4) The Punjab Payment of Wages (Procedure) Rules, 1965
1[12A. Deductions for recovery of loans.— Deductions for recovery of loans
granted under clause (fff) of sub-section (2) of se ction 7 shall be subject to
any rules made by 2[the appropriate Government] regulating the extent to
which such loans may be granted and the rate of interest payable thereon.]
13. Deductions for payments to co-operative societi es and insurance
schemes.— Deductions under clause (j)
3[and clause (k)] of sub-section (2) of
section 7 shall be subject to such conditions as 2[ the appropriate
Government] may impose.
4[13A. Maintenance of registers and records.—
(1) Every employer shall maintain such registers an d records giving such
particulars of persons employed by him, the work pe rformed by them, the
wages paid to them, the deductions made from their wages, the receipts
given by them and such other particulars and in suc h form as may be
prescribed.
(2) Every register and record required to be mainta ined under this section
shall, for the purposes of this Act, be preserved for a period of three years
after the date of the last entry made therein.] Excerpt shown. Open the full act in Lexace.