Amendments to Section 6 of the Payment of Wage Act, 1936

To encourage cashless and electronic transactions of wages, the Government of India intends to make amendments to Section 6 of the Payment of Wage Act, 1936. As large number of employees have a bank account now, small denomination transactions can be handled smoothly. The details of existing and proposed provision are as follows:

Section 6

Existing Provision “Wages to be paid in currency coin or currency notes-

All wages shall be paid in currency coins or currency notes or in both:

Provided that the employer may, after obtaining the written authorization of the employed person, pay him the wages either by cheque or by crediting the wages in his bank account.”

Proposed Provision “Wages to be paid in currency coin or currency notes-

All wages shall be paid in currency coins or currency notes or in both:

Provided that the appropriate Government may, by notification the Official Gazette, specify the industrial or other establishment, the employer of which shall pay to every person employed in such industrial or other establishment, the wages either by cheque or by crediting the wages in his bank account.”

The amendments are proposed to reduce the complaints concerning non-payment or less payment of minimum wages due to the current situation. However, the said proposal would be taken into consideration only after 16-12-2016.

Any objections or suggestions with respect to the proposal within the given time frame to be addressed to “The Secretary”, Ministry of Labour and Employment, Shram Shakti Bhawan, Rafi Marg, New Delhi-110001.

To view and download the gazette notification, click here.