New Delhi: The Cabinet on Wednesday approved promulgation of an Ordinance to amend the Wages Act, empowering workers to claim salary in cashless form via transfer of funds to bank accounts or payment through cheques along with cash payments.
The move will be beneficial to a large section of workers in small factories, MSMEs, tea estates, and collieries under the government sector undertakings.
A top government functionary told BTVi that the Cabinet has approved two Ordinances today. “The first is to amend the Payment of Wages Act and the second one is to amend the Enemy Property Act. The first one will facilitate cashless credit of salary to workers. The Ordinance will empower the workers to opt for electronic transfer of salary.”
The official clarified that the Ordinance does not in any way make it mandatory for the employers to credit the salary in a cashless format. “The main object is to protect the rights of the workers as practices such as under billing of salaries is prevalent in the segment,” said the official.
The government proposes to bring an amendment to Section 6 of the Payment of Wages Act which will further provide crediting the wages in the bank account of the employees or payment through cheque along with the existing provisions of payment in current coin or currency notes.
Also, the appropriate Government (Centre or State) will have to come up with the notification to specify the industrial or other establishments where the employer shall pay wages through cheque or by crediting the wages in employees’ bank account.
“It is, therefore, clear that the option of payment through cash is still available with the employers for payment of wages,” an official release said.
The Payment of Wages Act was passed in the year 1936 and the situation prevailing at that point of time has completely undergone a technological revolution. Most of the transactions now take place through the banking channels. The proposal of Ministry of Labour and Employment to bring an amendment to Section 6 of the Act is an additional facility of crediting the wages in the bank account of the employees or payment through cheque along with the existing provisions of payment in current coin or currency notes.
The above proposed amendment will also ensure that minimum wages are paid to the employees and their social security rights can be protected. Thus the employers can no longer under-quote the number of employees employed by them in their establishments to avoid becoming a subscriber to the EPFO or ESIC schemes.
It is also pointed out that the states like Andhra Pradesh, Telangana, Kerala, Uttarakhand, Punjab and Haryana have already come out with notifications to provide for payment through banking channels.
The promulgation of Ordinances for Wages and Enemy Properties Act was necessary as the government failed to pass the two Bills in the winter session of Parliament due to Opposition disruptions.