Employers can now pay wages using banking facilities as well effective 28.12.2016| Payment of Wages (Amendment) Act, 2017

Employers can now pay wages using banking facilities as well effective 28.12.2016| Payment of Wages (Amendment) Act, 2017

February 20, 2017 Labour 0

The Payment of Wages (Amendment) Act, 2017 (“Amendment”) has received presidential assent on 16th February, 2017 and is effective as on 28th December, 2016.

Now, employers can pay wages by crediting it in the bank account of the employees or by making payment through cheque in addition to the existing provisions of making payments in current coins or currency notes.

This initiative is being undertaken to facilitate the employers to pay wages using the banking facilities in addition to the existing modes of payment of wages in current coin or currency notes.

This Amendment further clarifies that payment of wages through cheque or by crediting wages in employees’ bank account will be mandatory for employers of the industrial or other establishment as will be notified by the appropriate Government in the Official Gazette.

Prior to this, facilitating payment through cheque or by crediting the wages in the employees’ bank account was not mandatory. The employer could make payment of wages through bank account or cheque after obtaining the written authorization of the employed person.

Background:

The Government considered it necessary to amend the Principal Act in order to provide the employer with an option to pay wages to the employees by cheque or by crediting it to their bank account; and in this regard, to enable the appropriate Government to specify the industrial or other establishments, by notification in the Official Gazette, the employer of which will have to compulsorily pay wages only by cheque or by crediting in the bank account of employees.

With this objective in mind, the Payment of Wages (Amendment) Bill, 2016 (“Amendment Bill”) was introduced in the Lok Sabha on 15th December, 2016. However, it could not be taken up for consideration and passing in the Lok Sabha. Since both the Houses of Parliament were not in session and immediate action was required, the President had promulgated the Payment of Wages (Amendment) Ordinance, 2016 on 28th December, 2016 to facilitate the employers to pay wages using the banking facilities in addition to the existing modes of payment of wages in current coin or currency notes. It further clarified that payment of wages through cheque or by crediting wages in employees’ bank account will be mandatory for employers of the industrial or other establishment as will be notified by the appropriate Government in the Official Gazette.

Please note that the Payment of Wages (Amendment) Ordinance, 2016 has now been repealed by the Amendment Act.

Source: E-Gazette

About the author

Lexplosion:

0 Comments

Would you like to share your thoughts?

Your email address will not be published. Required fields are marked *

Leave a Reply