The Lok Sabha has passed the Payment of Wages (Amendment) Bill, 2017 to enable employers to pay wages to workers through cheque or directly crediting to their accounts.
The bill will replace the Ordinance promulgated by the President in December 2016 to amend the Payment of Wages Act, 1936.
Key Provisions of the Bill
- Method of payment of wages: Earlier, under the parent Act employer can pay his employee’s wages either by cheque or by crediting it into his bank account after obtaining his written authorisation.
- Permit the employer to pay an employee’s wages: (i) by cheque; or (ii) by crediting them into his bank account or (iii) in coin or currency notes. It removes the requirement of obtaining prior written authorization for payment of wages by cheque or through a bank account.
- It empowers Union or state government to specify certain industrial or other establishments where the employer should pay his employees only by: (i) cheque; or (ii) crediting the wages in his bank account.
The Union Government had decided to take the ordinance route amend the Payment of Wages Act, 1936 because after demonetisation of the Rs. 500 and Rs. 1,000 banknotes in November 2016 had led to a cash crunch, and employers were finding it tough to pay workers in cash.