Govt introduces bill for wage payment via e-mode, cheques

Government today introduced a bill in Lok Sabha to enable Centre and states to specify the industries which will have to pay wages to workers only through cheques or crediting it to their bank accounts.
Labour Minister Bandaru Dattatreya introduced the Payment of Wages (Amendment) Bill 2017 today, which seeks to enable employers to pay wages to workers through cheque or crediting to their bank accounts without obtaining written authorisation of the employees.
The bill will replace the Payment of Wages (Amendment) Bill 2016, which was introduced in Lok Sabha on December 15, 2016 and also seeks to repeal the Payment of Wages (Amendment) Ordinance 2016 promulgated on December 28, 2016.

According to the bill, the ordinance was promulgated because the bill introduced on December 15, 2016 could not be taken up for consideration and passage in Lok Sabha.
"As both the Houses of Parliament were not in session and immediate action was required to be taken to ensure that the benefits of the proposed legislation reach the employed person a the earliest, President promulgated the Payment of Wages (Amendment) Ordinance 2016," the bill stated.
The decision to adopt ordinance route to amend the Act was taken by the Union Cabinet on December 21, 2016.

The bill provides 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 accounts.
The bill also enables employers to pay through cheque or e-mode without the written authorisation of the worker. It provides that non-notified industries will have the option to pay "in current coin or currency notes or by cheque or by crediting wages in the bank account of the employee".
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.