Rules for Payment of Wages (Section 3-6)

The Payment of Wages Act, 1936, defines several rules to regulate the payment of wages to certain classes of employed persons in India. In this article, we will focus on the rules for payment of wages act which is specified under sections 3 to 6.

Rules for Payment of Wages

The four sections which detail the rules for payment of wages under the Payment of Wages Act, 1936 are:

1. Responsibility for payment of wages – Section 3
2. Fixation of wage periods – Section 4
3. Time of payment of wages – Section 5
4. Wages to be paid in currency notes or currency coins – Section 6

Let’s look at each of these sections in detail.

Section 3 – Responsibility for Payment of Wages

(1) Every employer is responsible for the payment of all wages to all the employees that he employs. In any other case, if the employer names a person, or if there is a person responsible to the employer or is nominated, then such a person is responsible for the payment of wages.

(2) Notwithstanding anything contained in sub-section (1), the employer is responsible to make the payment of all wages which the Act requires him to make. In fact, if the contractor or the person that the employer designates to make the payment fails to do so, then the responsibility lies with the employer.

Learn more about Payments of Wages Act – Section 8 (Fines) here in detail.

Section 4 – Fixation of Wage Periods

(1) The person responsible for the payment of wages under Section 3 must fix periods in respect of which he shall make the payment of wages. This period is called the wage period.

(2) A wage period will not exceed one month under any circumstance

Section 5 – Time of Payment of Wages

(1) Every person employed upon or in:

1. Any railway, factory or industrial or other establishments upon or in which the total number of employed persons is less than one thousand, must receive his wages before the expiry of the seventh day from the last day of the wage period for which the wages are payable.
2. Any other railway, factory or industrial or other establishments, must receive his wages before the expiry of the tenth day from the last day of the wage period for which the wages are payable.

(2) If the employer terminates the employment of a person, then he must ensure that the terminated employee receives his wages before the expiry of the second working day from the date of termination of employment.

(3) The Appropriate Government can exempt to such an extent and also subject to such conditions in the order the person responsible for the payment of wages to employed persons.

(4) The employer or the person responsible for paying wages must ensure that the wages are paid on a working day.

Section 6 – Payment of wages in currency notes or currency coins

The employer or the person responsible for making the payment of wages must pay in currency coins or currency notes or in both. Further, he cannot pay in kind.

Also, the employer can pay the wages via a cheque or a direct deposit to the bank account of the employee after taking a written authorization from him.

Solved Question on Rules for Payment of Wages

Q1. What are the four sections which define rules for payment of wages under the Payment of Wages Act, 1936?

Answer: The four sections which define the rules for payment of wages under the Payment of Wages Act, 1936 are:

• Responsibility for payment of wages – Section 3
• Fixation of wage periods – Section 4
• Time of payment of wages – Section 5
• Payment of wages in currency notes or currency coins – Section 6