Is a Employer authorized to deduct Installment of loan from his Employee who taken Loan from a bank under payment of wages act.
From India, Bhopal
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From India, Bhopal
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Hello,
Let us get the fundamentals clear:
1) I assume that the Payment of Wages Act is applicable.
2) I assume that the loan is from a cooperative bank or a cooperative society.
The legal position if these assumptions are correct is:
1) Yes, the employer is authorized to deduct installments and send these to the coop bank/coop society.
2) Not only that, under the Cooperative Society Act, it is mandatory to deduct the said installments and remit.
3) If the employer fails or refuses to comply with this position, then the concerned coop institute is entitled to recover these from the said employers as "arrears of land revenue" by following due legal process.
However, other noteworthy points are:
1) There cannot be TWO or more loans outstanding against an individual. (Coop institutes often violate this)
2) While the total deduction from the earned wages of an employee cannot be more than 50% under normal circumstances, if there is a coop loan, the deduction can go up to 75% of earned wages.
3) The Payment of Wages Act stipulates under Sec 6 or 7 the various deductions that can be made by the employer and the conditions attached.
If any doubts are created by this response, you may revert!
Regards,
Samvedan
December 22, 2012
From India, Pune
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321Let us get the fundamentals clear:
1) I assume that the Payment of Wages Act is applicable.
2) I assume that the loan is from a cooperative bank or a cooperative society.
The legal position if these assumptions are correct is:
1) Yes, the employer is authorized to deduct installments and send these to the coop bank/coop society.
2) Not only that, under the Cooperative Society Act, it is mandatory to deduct the said installments and remit.
3) If the employer fails or refuses to comply with this position, then the concerned coop institute is entitled to recover these from the said employers as "arrears of land revenue" by following due legal process.
However, other noteworthy points are:
1) There cannot be TWO or more loans outstanding against an individual. (Coop institutes often violate this)
2) While the total deduction from the earned wages of an employee cannot be more than 50% under normal circumstances, if there is a coop loan, the deduction can go up to 75% of earned wages.
3) The Payment of Wages Act stipulates under Sec 6 or 7 the various deductions that can be made by the employer and the conditions attached.
If any doubts are created by this response, you may revert!
Regards,
Samvedan
December 22, 2012
From India, Pune
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PAYMENT OF WAGES ACT 2009.doc