Payment of Wages Act, 1936
The Payment of Wages Act, 1936 regulates payment of wages to employees (direct and indirect). The act is intended to be a remedy against unauthorized deductions made by employer and/or unjustified delay in payment of wages.
Payment should be made before the 7th day of a month where the number of workers is less than 1000 and 10th day otherwise. The wage-period shall not exceed 1 month. The Act is applicable only to employees drawing wages not exceeding Rs. 6500 a month. 
Mode of Payment
Under the act, payment has to be made in currency notes or coins. Cheque payment or crediting to bank account is allowed with consent in writing by the employee. (Section 6)
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Deduction from Wages
Employer is allowed to effect only authorized deductions, as specified in the Act. This include:
- Deductions for absence from duty,
- Deductions for damage to or loss of goods made by the employee due to his negligence,
- Deductions for house-accommodation supplied by the employer or by government or any housing board,
- Deductions for such amenities and services supplied by the employer as the State Government or any officer,
- Deductions for recovery of advances connected with the excess payments or advance payments of wages,
- Deductions for recovery of loans made from welfare labour fund,
- Deductions for recovery of loans granted for house-building or other purposes,
- Deductions of income-tax payable by the employed person,
- Deductions by order of a court,
- Deduction for payment of provident fund,
- Deductions for payments to co-operative societies approved by the State Government.
Deductions for payments to a scheme of insurance maintained by the Indian Post Office
- Deductions made if any payment of any premium on his life insurance policy to the Life Insurance Corporation with the acceptance of employee,
- Deduction made if any contribution made as fund to trade union with the acceptance of employee,
- Deductions, for payment of insurance premia on Fidelity Guarantee Bonds with the acceptance of employee,
- Deductions for recovery of losses sustained by a railway administration on account of acceptance by the employee of fake currency,
- Deductions for recovery of losses sustained by a railway administration on account of failure by the employee in collections of fares and charges,
- Deduction made if any contribution to the Prime Minister’s National Relief Fund with the acceptance of employee,
- Deductions for contributions to any insurance scheme framed by the Central Government for the benefit of its employees with the acceptance of employee.
Limit for deductions [Sec 7 (3)]
The total amount of deductions from wages of employees should not exceed 50%, but only in case of payments to co-operative societies, deduction from wages of employee can be made up to 75%.
Claims for excessive deduction and Non Payment
Employers individually or through trade union can approach the authority (Labour Office) for relief. (Section 15, 16, 17)
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