Background:
The Payment of Wages Act, 1936 was enacted to regulate the timely payment of wages and prevent unauthorized deductions, ensuring fair treatment of workers. Prior to its enactment, workers often faced exploitation in the form of delayed wages and arbitrary deductions. To implement the provisions effectively at the state level, the Gujarat Payment of Wages Rules, 1963 were introduced. These rules provide detailed procedures for maintaining registers, submitting returns, regulating fines and deductions, granting advances or loans, and displaying statutory notices. Together, the Act and the Rules form a comprehensive framework for wage regulation in Gujarat.
Applicability:
The Rules apply to:
Compliance requirements under the Rules in accordance with the Act
Factories and industrial establishments making deductions for damage or loss must maintain the Register in Form II-A and preserve it for 3 years from the last entry. Registers under Rules 3, 4, 5, and 17 must always be available for inspection. These include: Form I (Fines), Form II-A (Deductions for damage/loss), Form II (Wages), and Form III (Advances).
Every factory or industrial establishment must maintain a Register of Wages in Form II. However, if authorities (Municipal Commissioner, Chief Inspector, etc.) find that existing wage sheets already cover necessary particulars, they may exempt the employer from maintaining Form II. They may also exempt furnishing superfluous information under Form II-A.
Every employer requiring the power to impose fines must send to the prescribed authority a list in English (in duplicate) clearly defining the acts and omissions. If not the sole person empowered, the employer must also send a list showing those appointments in the factory or establishment whose incumbents may impose fines and on which classes of workers.
The employer must display at or near the main entrance a copy of the approved list of acts and omissions, in English together with a literal translation in the language of the majority of workers.
No fine may be imposed by any person other than the paymaster or a person holding an appointment named in a list submitted under Rule 10.
A loan not exceeding 36 months’ wages or Rs. 10,000 (whichever is less) may be granted, with interest not exceeding 6% per annum. Details must be entered in Form III-A.
The paymaster must submit a return in Form IV to the appointed authority by 15th February of the following year. Every employer with 50+ employees under Factories Act, 1948 or Contract Labour (Regulation & Abolition) Act, 1970 must file a consolidated annual return.
Paymaster must display notices in each department specifying wage rates for all workers (except supervisory, managerial, or confidential positions).
Paymaster must display a notice specifying wage rates for all workers employed in the establishment (except supervisory or managerial staff).
The employer, manager, or other responsible person is accountable for payment of wages under this Act if a contractor or designated person fails.
Every person responsible for payment of wages shall fix wage periods, not exceeding one month.
Wages must be paid before expiry of: (a) 7th day if employees are fewer than 1,000, (b) 10th day if employees are 1,000 or more.
All wages must be paid in current coin or currency notes, or by cheque, or by crediting wages to the employee’s bank account.
No fine may be imposed unless specified in a notice approved by the prescribed authority. Opportunity to show cause must be given, fine must not exceed prescribed limits, cannot be imposed on workers below 15 years, must be recovered within 90 days, and details must be recorded in a register.
A notice specifying acts and omissions must be exhibited in the prescribed manner on premises or prescribed places.
No fine may be imposed until the worker has been given an opportunity to show cause, and procedure as prescribed has been followed.
The total amount of fine in any one wage period must not exceed 3% of wages payable in that period.
Deductions can be made only for absence from the place of work or refusal to work. Proportion of deduction cannot exceed proportion of absence. If 10 or more employees absent themselves without due notice, deduction may extend up to 8 days’ wages.
Penalty & Punishments
Section 20: Penalty for offences under the Act.—
Whoever being responsible for the payment of wages to an employed person contravenes any of the provisions of any of the following section, namely, section 5 except sub-section (4) thereof, section 7, section 8 except sub-section (8) thereof, section 9, section 10 except sub-section (2) thereof, and sections11 to 13, both inclusive, shall be punishable with fine which shall not be less than one thousand five hundred rupees but which may extend to seven thousand five hundred rupees.
Whoever contravenes the provisions of section 4, 8 [sub-section (4) of section 5, section 6, sub-section (8) of section 8, sub-section (2) of section 10 or section 25 shall be punishable with fine which may extend to three thousand seven hundred fifty rupees
If any person who has been convicted of any offence punishable under this Act is again guilty of an offence involving contravention of the same provision, he shall be punishable on a subsequent conviction with imprisonment for a term 6[with fine which shall not be less than three thousand seven hundred fifty rupees but which may extend to twenty-two thousand five hundred
Provided that for the purpose of sub-section, no cognizance shall be taken of any conviction made more than two years before the date on which the commission of the offence which is being punished came to the knowledge of the Inspector.
If any person fails or wilfully neglects to pay the wages of any employed person by the date fixed by the authority, in this behalf, he shall, without prejudice to any other action that may be taken against him, be punishable with an additional fine which may extend to 7[seven hundred fifty rupees for each day for which such failure or neglect continues.
Conclusion
The Act and Rules collectively safeguard employees’ rights by ensuring timely and transparent wage payments, restricting arbitrary deductions, and prescribing clear procedures for compliance. They also empower inspectors to oversee enforcement, thereby promoting accountability and fairness in the employer–employee relationship.
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