Payment of wages and maintenance of records and returns

  • Act/Rule/Legislation

  • Online Link to Act/Rule/Legislation

  • Initial Setup or Ongoing Maintenance

    Ongoing compliance requirement

  • Filing and Maintenance Requirements

    The Payment of Wages Act casts an obligation upon an employer for the payment of wages before the due date, fixation of wage period, mode of payment, payment of wages in case of termination of employment or death of employee or closure of business. It defines permissible deductions that an employer can make from the wages payable to its employees. It also lays down the provisions relating to imposition of fines by the employer.

    An employer is required to maintain registers and records and file certain returns in the prescribed format.

    The format for maintaining registers and records and filing of returns varies from State to State in India for which separate rules and regulations have been enacted.

  • Penalty

    Any person who contravenes the provisions of the Payment of Wages Act with respect to (i) payment of wages in case of termination of employment or death of employee or closure of business or (ii) non-payment of wages by the due date (being a working day), is punishable with a minimum fine of Rs. 1,500 (Rupees One Thousand Five Hundred only) extending up to Rs.7,500 (Rupees Seven Thousand Five Hundred only). Any person who contravenes the provisions of the Payment of Wages Act with respect to fixation of wage period, mode of payment of wages or payment of wages on a day other than a working day, is punishable with a fine extending up to Rs. 3,750 (Rupees Three Thousand Seven Hundred and Fifty only).

  • Application Guidelines / Responsible Persons / Comments

    The Payment of Wages Act applies, amongst other places, to industrial or other establishments (including workshops or other establishments in which articles are produced, adapted or manufactured, with a view to their use, transport or sale). Some State Governments have extended the provisions of the Payment of Wages Act to commercial establishments covered under the corresponding S&E Acts, as well.

    The Payment of Wages Act seeks to regulate payment of wages to certain classes of employed persons. However, in the event the wages exceed Rs. 18,000 (Rupees Eighteen Thousand only) per month, then the enactment does not apply.