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Centre okays ordinance for wage payment via e-mode, cheques

New Delhi: Promoting less-cash economy, the government today brought in an ordinance to enable industries covered under the Payment of Wages Act to pay workers through cheques or crediting money into their bank accounts, although employers will have the option to pay in cash.

Labour Minister Bandaru Dattatreya,
Labour Minister Bandaru Dattatreya,

Labour Minister Bandaru Dattatreya had introduced The Payment of Wages (Amendment) Bill, 2016 in Lok Sabha on December 15 but it could not be passed because of continued disruption of the Winter Session of Parliament due to ruckus over demonetisation.

The decision to adopt ordinance route to amend the Act was taken by the Union Cabinet.

Trying to clear the air, Dattatreya told reporters at a press conference after the Cabinet meeting that employers will have the option of paying wages in cash after notification of industries by Centre and states.

Confusion prevailed earlier in the day whether it would be mandatory for employers of the industries notified by the Centre and states, to pay wages through cheques or by crediting the same into employees bank account.

The bill however clearly states that “appropriate Government may, by notification in 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 only by cheque or by crediting the wages in his bank account”.

The amendment enables the Centre as well as state governments to notify industries where employers shall have pay wages either through cheque or crediting that into workers’ bank account.

Despite repeated queries the minister maintained that employers will have the option to pay wages in cash after the amendment in the Act through ordinance as well as the bill.

Dattatreya said however that the government has adopted the ordinance route because it was long pending demand of the trade unions.

Centre of Indian Trade Unions (CITU) General Secretary Tapen Kumar Sen said: “They are lying. The bill introduced in the Parliament clearly bars payment of wages in cash by industries notified by Centre and States. They just want to please Prime Minister Narendra Modi.”

He also said, “It is not correct to take away workers’ right to demand wages in cash amid currency crunch when the entire banking service in the country is in disorder facing an abnormal situation.

“This is not the right time for bringing this ordinance as workers are already going through tough times due to currency crunch following demonetisation.
In a statement, CITU said: “This right to consent is

important for workers since at least 35 per cent of the habitations in the country are still out of the coverage of bank branches in the vicinity and also a big majority of workers including those in urban areas, particularly those in low-paid unorganised sector, do not have bank accounts. And in case of compulsory bank payment of wages, the migrant workers will be put in serious difficulty.”

As per the Bill, the new procedure will serve the objective of “digital and less-cash economy”.

The Act had come into force on April 23, 1936, providing for payment of wages in coin or currency notes, or in both. The provision for payment of wages by cheque or crediting it into bank account after obtaining the requisite authorisation of employee was inserted in 1975.

At present, the Act covers all those employees in certain categories of establishments whose wage does not exceed Rs 18,000 per month.

The Centre can make rules regarding payment of wages in relation to railways, air transport services, mines, oil fields and its establishments while states take a call on all other cases.

By making state-level amendments to the Act, Andhra Pradesh, Uttarakhand, Punjab, Kerala and Haryana have already made provisions for payment of wages through cheque and electronic transfer.

At present, with the written authorisation of an employee, wages can be given through cheque or transferred to his or her bank account.



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