when contracting out is void with act of 1936

 The Payment of Wages Act, 1936
3.8.1 Object
 – To regulate payment of wages, time and
mode of payment, imposition of fine and
deduction etc.
3.8.2 Application
 –all factories, shops, mines, establishments,
etc., irrespective of the number of
employees employed.
3.8.3 Coverage
 – Employees drawing wages up to Rs.
 Every employer/manager/occupier should
make timely payment without any
unauthorized deduction from wages.
 If number of employees is less than 1000,
then wages must be paid within 7 days of
the expiry of wage period and in other cases
within 10 days. ( Section 5 )
 The employer may fix the wage period
which may be per day, per week or per
Legal Aspects of Hospital Management – Dr. B.G. Maniar
month. But in no case it should exceed one
month. ( wage period means a time period,
expiry of which wages becomes payable )
 All wages shall be paid in current coins or
currency notes or in both.
After obtaining the authorization, may be paid
either by cheque or by crediting the wages in
employees‘ bank account.

 (Section 6)
 Contracting out is void. ( Section 23 )
3.8.4 Wages
It means all remunerations (expressed in terms of
money) payable if the terms of employment express
or implied were fulfilled in respect of the work
done, which includes –
- any sum payable according the terms of award,
settlement, order of the court, over-time work,
holidays, leave period, bonus (which form a part of
remuneration), compensation payable at the time of
termination ;
But does not include – 

- any bonus (under a scheme of profit sharing or
otherwise), the value of any house accommodation
or supply of light, water, medical attendance or
other amenities, any contribution paid by the
employer to any pension or P.F., or E.S.I.C., T.A.,
gratuity, etc. [Sec. 2(vi)]
Legal Aspects of Hospital Management – Dr. B.G. Maniar
3.8.5 Deduction from wages
 Authorized : PF - ESI contribution, LIC
premium, advances, over payment paid by
the employer, loan granted for housing or
for any other purposes, amenities, services
provided, income tax, fine, absence from
duty (unauthorized absence) , damages or
loss of goods, order of the court, etc.
 Imposition of fine on employees below 15
years is prohibited.
 The amount of fine should not exceed 3 %
of the wages payable in respect of that wage
 Limit – the total amount of permissible
deduction in any wage period should not
o in case where deductions are wholly
or partly made for payment to cooperative societies, 75 % of the
wages ; and
o in any other cases, 50 % of the

  Excess amount, however, can be deducted in
the manner prescribed in the Rules.
 Principles of Natural Justice are to be
observed where it is necessary
 In case 10 or more employees acting in
concert absent without reasonable cause,
deduction of wages up to 8 days, is
Legal Aspects of Hospital Management – Dr. B.G. Maniar
 Registers and Records are to be maintained
according to the provisions of the Act and
Rules under the Act.
3.8.6 Offences and penalties
 Delay in, or non-payment of wages within
the prescribed time, making any
unauthorized deduction or imposition of
fines in contravention of the Act ;

  Failure to maintain Registers and Records ;
or to furnish required information or sending
false information ; or obstructing the
inspector or refusal to produce before him
the Records/Documents for inspection
o Fine up to Rs. 7500/-. ( minimum
fine Rs. 1500 )
 On repetition of the same offence –
imprisonment up to 6 months and fine up to
Rs. 22500/-( minimum 1 month and fine Rs.
3750/- respectively )
 Any claim for un paid or delayed wages,
unauthorised deduction from wages should
be made within 12 months before the
appropriate authority.
 Appeal against the decision of appropriate
authority - before the District Court within
30 days.
 Bar of suits – no court other than the
authority prescribed under the Act shall
entertain the claim under this Act.
Legal Aspects of Hospital Management – Dr. B.G. Maniar
 No court shall take the cognizance of a
complaint against any person unless it is
presented before and permitted by the
authority under this Act.
 No court shall take the cognizance of any
offence punishable, except on a complaint
made by or sanctioned by the inspector
under this Act.

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