LAWS RELATING TO WAGES & BENEFITS
Minimum Wages Act 1948
The Act contains list of all employments for which minimum wages are to be fixed by the appropriate Governments. It includes non-agricultural employments and employment in agriculture. It empowers appropriate Government to fix the minimum rates of wages for specified employments. Recently with effect from April 1, 2011 the National Floor Level of Minimum Wage has been raised to Rs. 115 per day.
Payment of Bonus Act 1965
The payment of Bonus Act is applicable to every factory and every other establishment in which 20 or more persons are employed on any day during an accounting year excluding some categories of employees as contained in the Act. PBA mandates payment of bonus to every employee in an accounting year, in accordance with the provisions of this legislation, provided that he or she has worked in the establishment for not less than 30 days and draws a salary or wage not exceeding Rs.10, 000 per month.
Minimum bonus shall be 8.33% of salary/wages earned or Rs. 100 whichever is higher, it is payable on completion of 5 years after 1st Accounting year even if there is no profit. If the allocable surplus exceeds the amount of minimum bonus, then bonus shall be payable at higher rate subject to a maximum 20% of salary/wages. Computation of bonus is to be worked out as prescribed in the Act. Bonus shall be paid within 8 months from the close of accounting year. A register showing the computation of the allocable surplus, another register showing the set-on and set-off of the allocable surplus, and register showing the details of the amount of bonus due to each of the employees, the deductions and the amount actually disbursed must be maintained.
Payment of Wages Act, 1936
Enacted during the British Rule in 1936 on the recommendations of the Royal Commission on Labour, the Act regulates the payment of wages to workers and ensures that they are disbursed by the employers within the stipulated time frame and without any unauthorized deductions. Enforcement of the Payment of Wages Act is primarily the responsibility of the State Governments. The Central Government is responsible to enforce the Act only in mines, railways, oilfields and air transport service by virtue of Section 24 of the Act.
Inspectors are appointed under the provisions of the Act who conduct regular inspections to ensure that the employers pay the wages timely and correctly. Defaulting employers are advised to pay full wages in time. In case of non-adherence to the advice, there are provisions to prosecute.
The Act lays down that the wage period exceeding one month should not be fixed and payment of wages must be made before the entry of specific day after the last day of the wage period. The specific day is the seventh day of a month where the number of workers is less than 1000 and tenth day in case the number of workers is 1000 or more. All wages must be paid in current legal tender. The wages can also be paid by cheque or credited to the bank account of the employed persons with the written authorization of the letter. The beneficiary under the Act are, however those who are in receipt of wages below the Rs. 10,000/- per month.
The Act provides that the wages of an employed person shall be paid to him without any deductions except those authorized under the Act. Deductions permissible from wages inter-alia relates to unauthorized absence from duty, deductions for house accommodations, recovery of advances and statutory dues etc.
