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Promulgation of Payment of Wages Act (Amendment) Ordinance, 2016 by the President

  • The President has announced that the Payment of Wages Act (Amendment) Ordinance, 2016 shall enable an employer to pay wages by crediting it into the bank accounts of the employees.

    The ordinance was notified in the Official Gazette on Wednesday and has already been brought into force. Section 6 of the Payment of Wages Act has been amended through this ordinance.

    Earlier the wages were to be paid in current coin or currency notes or in both and in places where he wanted to pay the wages through cheque or by crediting it into the employees account, he could not do so without obtaining a written authorization from the employee. Now the employer does not need any written consent from the employee for paying wages through cheque or by crediting in his bank account. Further there are high chances that the government might make it mandatory for the employers to pay it by way of cheque or transferring in bank accounts.

    Before Amendent, the said Section 6, read as follows: Wages to be paid in current coin or currency notes- All wages shall be paid in current coin or currency notes or in both: Provided that the employer may, after obtaining the written authorization of the employed person, pay him the wages either by cheque or by crediting the wages in his bank account.

    Now the section shall read as follows: All wages shall be paid in current coin or currency notes or by cheque or by crediting the wages in the bank account of the employee. Provided that the 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.


    OUR TAKE

    Demonetization has made a progressive change amongst people in terms of bank account usages and cashless transactions and this actually eliminates high chances of corruption by way of unaccounted money.  Therefore we believe it’s a decision in the right direction and in a way for the benefit of the employees.


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