Government Clarifies on Amendment to Payment of Wages Act

The government on Wednesday issued a clarification after reports appeared in the media that it was amending the Payment of Wages Act to make it mandatory to pay wages to workers through cheque or account transfers.

This is not the correct position, said the government statement and clarified that amendment to Section 6 of the Payment of Wages Act will provide an additional facility of payment of wages through cheques along with the existing provisions of payment in current coin or currency notes.

Huge technological advancements since the Payment of Wages Act was first promulgated in 1936, was stated to be the reason for the present amendment. Most of the transactions now take place through the banking channels, the statement said.

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, the statement said.

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.