President Promulgates Payment Of Wages Act (Amendment) Ordinance, 2016 [Read Ordinance]

Further, the government can make it mandatory for employers to pay only in cheque or by crediting it into employee bank account.

The President has promulgated the Payment of Wages Act (Amendment) Ordinance, 2016, which enables an employer to pay wages by crediting it into the bank account of the employee.

The Ordinance was notified in the Official Gazette on Wednesday and it has already come into force. Through the ordinance, Section 6 of the Payment of Wages Act has been amended.

Earlier, wages were to be paid in current coin or currency notes or in both, and without obtaining a written authorisation of the employee, the employer could not have paid it by cheque or by crediting it in his bank account.

Now, the employer need not obtain any consent from the employee to pay the wages in cheque or by crediting in his bank account. Further the government can make it mandatory for the employer to pay it by the way of cheque or by crediting in employee’s bank account.

The said Section 6, before amendment, read as follows: 6. 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 authorisation of the employed person, pay him the wages either by cheque or by crediting the wages in his bank account.

Now, this Section would 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.

Read the Ordinance here.