Maharashtra Payment of Wages Rules, 1963
What is “Wages”?
Wage is the monetary compensation or remuneration paid by an employer to employees in exchange for work done. Employers may calculate wage as a fixed amount for each task completed, or at an hourly/daily rate, based on easily measurable quantities of work performed.
Wages encompass all remunerations expressed in terms of money, encompassing the following:
- Amounts payable under the terms of employment,
- Payments under any award, settlement, or court order,
- Compensation for overtime work or for holidays/leave periods,
- Payments due on account of termination of employment
Wages does “not include” the following Payments:
- Bonus, which does not constitute part of the remuneration,
- Value of any house accommodation, provision of light, water, medical assistance, etc.,
- Any travel concession,
- Contributions payable by the employer to any pension or provident fund,
- Any sum paid to cover special expenses incurred as a requirement of employment,
- Gratuity payable upon termination of employment.
Objectives:
- Ensure the regulation of wage payments to a specific class of workers in the industry, preventing any wrongful deductions except those specified in the Act.
- Establish rules for determining the wage period, timing, and method of wage payment.
- Protect the rights of workers covered under this Act.
Applicability:
The Act applies to all individuals employed, whether directly or through contractors, in factories or specified industrial and other establishments.
The Central Government enforces the Act in Railways, Mines, Oilfields, and air transport services.
State Governments enforce the Act in all other establishments, including factories.
The Act does not apply to individuals earning Rs. 24,000/- or more per month.
Salient features of the Act
Obligations of Employers:
Every employer must pay wages to all the employees they employ. Additionally, any person designated, held responsible by the employer, or nominated by them must also ensure these payments
Wage Period:
The person responsible for wage payments must establish specific periods for which wages are payable, and no wage period should exceed one month.
Time and Mode of Payment of Wages:
Establishments with more than 1,000 employees must pay wages by the 10th day of the following month. All other employers must pay wages by the 7th day of the following month.
Employers must pay wages in current currency notes (cash) or through bank transfers.
Deductions from Wages:
Employers must ensure that wages are paid to all employees without any unauthorized deductions, except those permitted by this Act.
Deductions from wages may include:
- Fines
- Absence from duty
- Damage to or loss of goods, including loss of money, when such damage or loss is directly due to the employee’s neglect or default
- Recovery of advances or loans and the interest due on them
- Adjustment for over-payment of wages
- Payments made by the employee to the employer or their agent, which are also considered deductions from wages.
Deductions do not include the following penalties, provided the penalties conform to the requirements specified by the State Government:
- Withholding of increments or promotions
- Demotion to a lower post
- Suspension
Compliance Requirements:
A. Maintenance of Registers:
Employers are required to maintain registers and records that include the following details:
Information about the persons employed
Work performed by the employees
Wages paid to employees and deductions made from their wages
All these registers must be preserved for a period of three years.
B. Display of Notice of Abstracts:
All employers must display a notice containing summaries of this Act and its rules in both English and the language spoken by the majority of the factory employees. This notice should include:
A list of acts and omissions approved under Rule 12
Rates of wages payable to employees (excluding those in supervisory or managerial positions)
Penalties for Offences under the Act:
If an employer fails to maintain the required registers, willfully refuses to provide information or returns, or willfully provides false information, authorities may impose fines up to Rs. 1,500, extending to Rs. 7,500.
Additionally, failure to pay wages by the specified date may result in an additional fine of up to Rs. 750 per day.
Undisbursed Wages in the Event of an Employee’s Death:
If wages cannot be paid due to the death of an employee or lack of information about their whereabouts, employers must pay the amount to the person nominated by the employee. If no nomination exists, the amount must be deposited with the prescribed authority.
Conclusion
The act has established a range of rules and regulations to enhance and ensure efficient functioning within the industry. It empowers workers to perform their duties without worries about delayed payments or salary issues. The legislation sets the foundation for employees to work with dignity, bolstered by established mechanisms. Its provisions build trust between employers and employees, encouraging optimal productivity through motivation. The concepts of wage payment and deductions under the code are vital for industry operations, ensuring desired outcomes and providing benefits to employees.