President Pranab Mukherjee gives nod to wage payment via cheques or e-mode

The central and state governments can now specify industrial units and other establishments which will have to pay wages either through cheques or by electronically transferring into the workers’ bank accounts, as per a new law. President Pranab Mukherjee has recently given assent to the Payment of Wages (Amendment) Act, 2017, an official order said.

A Bill in this regard was passed by Parliament in the just-concluded first-half of the Budget Session. The Act enables employers to pay wages to workers through cheque or by transferring into their bank account without their written authorisation.

The new law has amended the Payment of Wages Act, 1936, which mandated payment of all wages either in coin or currency notes, or both.

Before introduction of a bill to amend the 1936 Act on February 3, an Ordinance was promulgated by the President on December 28, 2016. The Bill was passed in Lok Sabha on February 7 and in Rajya Sabha, the next day.
With the President’s approval to the Act, “the Payment of Wages (Amendment) Ordinance, 2016 is hereby repealed”, the order said.

As both the Houses of Parliament were not in session and immediate action was required to be taken to ensure that the benefits of the proposed legislation reach the employed persons at the earliest, the President promulgated the Payment of Wages (Amendment) Ordinance 2016, the bill had stated.

The new Act allows the governments to specify the industrial or other establishment, the employer of which shall pay to every person employed there, the wages only by cheque or by crediting it in his bank account.