Wage Payments Goes Cashless

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The Union Cabinet gave its nod for taking the ordinance route to amend the Payment of Wages Act, 1936, allowing business/industrial establishments to pay salaries of those earning less than Rs. 18,000/month through cheques or electronic transfers.

As per the amendments, an employer would no longer require written authorisation from an employee for wage payment through cheque or electronic transfer.

The day the notification is issued, this will be applicable to all firms, even in the private sector.

The Cabinet has approved the proposed amendments to the Act, mainly Section 6, which will further provide crediting wages in the bank account of employees or payment through cheque.

Pending notifications by the Centre or States the option of payment through cash is still available with the employers.

Andhra Pradesh/Telangana, Kerala, Uttarakhand, Punjab and Haryana have already come out with notifications to provide for payment through banking channels.

As labour is in the concurrent list, the decision was taken to “stop exploitation of unorganised sector workers and also take care of the long-pending demand of trade unions.

Trade unions, meanwhile, slammed the decision at a time when banking services are already “messed up” following demonetisation of Rs. 500/1,000 notes, saying this would add to the woes of lakhs of the already cash-hit unorganised sector workers.

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