The Payment of Wages Act regulates the payment of wages to certain classes of persons employed in industry and its importance cannot be under-estimated. The Act guarantees payment of wages on time and without any deductions except those authorized under the Act. The Act provides for the responsibility for payment of wages, fixation of wage period, time and mode of payment of wages, permissible deduction as also casts upon the employer a duty to seek the approval of the Government for the acts and permission for which fines may be imposed by him and also sealing of the fines, and also for a machinery to hear and decide complaints regarding the deduction from wages or in delay in payment of wages, penalty for malicious and vexatious claims. The Act does not apply to persons whose wage is Rs. 10,000 or more per month. The Act also provides to the effect that a worker cannot contract out of any right conferred upon him under the Act.

“wages” 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 –

(a) Any remuneration payable under any award or settlement between the parties or order of a court.

(b) Any remuneration to which the person employed is entitled in respect of overtime work or holidays or any leave period.

(c) Any additional remuneration payable under the terms of employment (whether called a bonus or by any other name).

(d) 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.

The purpose of the Act :

The Payment of Wages Act, 1936 was enacted with a view “to regulate the payment of wages to certain classes of persons employed in industry”. The regulation contemperated by the Act is two-fold :

1. to ensure regular and prompt payment of wages
2. to prevent exploitation of wage-earners by prohibiting arbitrary fines and deduction from wages.