Define the term 'wages' under the Payment of Wages Act, 1936. Also explain the responsibility of employer in respect of payment of wages.

CS Professional · Labour Laws & Practice · PYQS · December 2024
Define the term 'wages' under the Payment of Wages Act, 1936. Also explain the responsibility of employer in respect of payment of wages.

Answer & Explanation:

Section 2(vi) of the Payment of Wages Act, 1936 defines the term wages which means all remuneration (whether by way of salary allowances or otherwise) expressed in terms of money or capable of being so expressed which would if the terms of employment express or implied were fulfilled by payable to a person employed in respect of his employment or of work done in such employment and includes - any remuneration payable under any award or settlement between the parties or order of a court; any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period; any additional remuneration payable under the terms of employment (whether called a bonus or by any other name); any sum which by reason of the termination of employment of the person employed is payable under any law, contract or instrument which provides for the payment of such sum whether with or without deductions but does not provide for the time within which the payment is to be made; any sum to which the person employed is entitled under any scheme framed under any law for the time being in force, but does not include - any bonus (whether under a scheme of profit sharing or otherwise) which does not form part of the remuneration payable under the terms of employment or which is not payable under any award or settlement between the parties or order of a court; the value of any house-accommodation or of the supply of light water medical attendance or other amenity or of any service excluded from the computation of wages by a general or special order of Appropriate Government; any contribution paid by the employer to any pension or provident fund and the interest which may have accrued thereon; any travelling allowance or the value of any travelling concession; any sum paid to the employed person to defray special expenses entailed on him by the nature of his employment; or any gratuity payable on the termination of employment in cases other than those specified in sub-clause (d). Responsibility for Payment of Wages Section 3(1) of the Payment of Wages Act, 1936 provides that every employer shall be responsible for the payment to persons employed by him of all wages required to be paid under the Act. However, in the case of persons employed in factories if a person has been named as the manager of the factory; in the case of persons employed in industrial or other establishments if there is a person responsible to the employer for the supervision and control of the industrial or other establishments; in the case of persons employed upon railways if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned; in the case of persons employed in the work of contractor, a person designated by such contractor who is directly under his charge; and in any other case, a person designated by the employer as a person responsible for complying with the provisions of the Act, the person so named, the person responsible to the employer, the person so nominated or the person so designated, as the case may be, shall be responsible for such payment. Notwithstanding anything contained in sub-section (1), it shall be the responsibility of the employer to make payment of all wages required to be made under this Act in case the contractor or the person designated by the employer fails to make such payment. It may be noted that as per section 2(ib) of the Payment of Wages Act, 1936 "employer" includes the legal representative of a deceased employer.

Topics: Labour Laws & Practice

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