Partner - Risk Management
Training Operations - Csr
Presently Working As Dy Manager Hr &
Taxation And Hr
24th May 2013 From India, Hyderabad
24th May 2013 From India, Thiruvananthapuram
I go though the clause 7 (3) of the payment of wages act, 1936.
I have found the same as you mentiong but now i have query that in 50% value, all statutoru deductions are included?? (like PF, ESI, PT, etc..)
Please clarigy urgently if possible.
25th May 2013 From India, Ahmadabad
(75% where it includes amount of contribution to coop society or repayment of loan to coop society). This includes all statutory dues (except perhaps income tax).
However, only items listed as deductible under sec 6 and 7 of the pay,net of wages act can be deducted from salary. Any other amount deducted, even if below 50% is illegal
As stated by others, payment of wages act applies only up to a salary of 18000 per month. However, it is good practice to follow similar rules for employees with salary beyond that also. It ensures the person has enough to sustain himself during the month.
26th May 2013 From India, Mumbai
If you are making salary by cheque or net payment, you make entire salary and take separate cheque from him towards repayment and give him separate receipt.
27th May 2013 From India, Pune
2. If the employee is covered under POWA, then there is no option but to keep his total deductions below 50% of gross wages (as someone said before, this includes PF, esic). Since POWA specifically provides that payment back to the company is deduction, such payment would amount to illegal deduction under the act.
So, my suggestion would be not to agree to the employee's suggestion of higher deduction. The practical solution is to violate the law. If that is an option the HR department is comfortable with, then it's a different matter.
27th May 2013 From India, Mumbai
I go through the section 7 under the payment of wages act, 1936 and found that there is no information that all statutory deductions are included. Also, i have wrote the section for your ready refernce. If there is any information, please highlight and inform me:
Deductions which may be made from wages.
7. (1) Notwithstanding the provisions of 28a[the Railways Act, 1989 (24 of 1989)], the wages of an employed person shall be paid to him without deductions of any kind except those authorized by or under this Act.
29[Explanation I] - Every payment made by the employed person to the employer or his agent shall, for the purposes of this Act, be deemed to be a deduction from wages.
30[Explanation II - Any loss of wages resulting from the imposi¬tion, for good and sufficient cause, upon a person employed of any of the following penalties, namely :—
(i) the withholding of increment or promotion (including the stoppage of increment at an efficiency bar);
(ii) the reduction to a lower post or time scale or to a lower stage in a time scale; or
shall not be deemed to be a deduction from wages in any case where the rules framed by the employer for the imposition of any such penalty are in conformity with the requirements, if any, which may be specified in this behalf by 30a[appropriate Government] by notification in the Official Gazette.]
(2) Deductions from the wages of an employed person shall be made only in accordance with the provisions of this Act, and may be of the following kinds only, namely :—
(b) deductions for absence from duty;
(c) deductions for damage to or loss of goods expressly entrusted to the employed person or custody; or for loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default;
31[(d) deductions for house accommodation supplied by the employ¬er or by Government or any housing board set up under any law for the time being in force (whether the Government or the board is the employer or not) or any other authority engaged in the busi¬ness of subsidising house accommodation which may be specified in this behalf by 31a[appropriate Government] by notification in the Official Gazette;]
(e) deductions for such amenities and services supplied by the employer as 32[***] 31a[appropriate Government] 33[or any officer specified by it in this behalf] may, by general or special order, authorize.
Explanation - The word “services” in 34[this clause] does not include the supply of tools and raw materials required for the purposes of employment;
35[(f) deductions for recovery of advances of whatever nature (including advances for travelling allowance or conveyance allow¬ance), and the interest due in respect thereof, or for adjustment of over-payments of wages;
(ff) deductions for recovery of loans made from any fund constituted for the welfare of labour in accordance with the rules approved by 31a[appropriate Government], and the interest due in respect thereof;
(fff) deductions for recovery of loans granted for house-building or other purposes approved by 31a[appropriate Government], and the interest due in respect thereof;]
(g) deductions of income-tax payable by the employed per¬son;
(h) deductions required to be made by order of a Court or other authority competent to make such order;
(i) deductions for subscriptions to, and for repayment of advances from any provident fund to which the Provident Funds Act, 1925 (19 of 1925) applies or any recognized provident fund as defined 35a[in clause (38) of section 2 of the Income-tax Act, 1961 (43 of 1961)], or any provident fund approved in this behalf by 31a[appropriate Government], during the continuance of such approval; 36[***]
(j) deductions for payments to co-operative societies approved by 31a[appropriate Government] 37-38[or any officer specified by it in this behalf] or to a scheme of insurance maintained by the Indian Post Office; 39[and]
40[(k) deductions, made with the written authorisation of the person employed for payment of any premium on his life insur¬ance policy to the Life Insurance Corporation of India estab¬lished under the Life Insurance Corporation Act, 1956 (31 of 1956), or for the purchase of securities of the Government of India or of any State Government or for being deposited in any Post Office Savings Bank in furtherance of any savings scheme of any such Government;]
41[(kk) deductions made with the written authorisation of the employed person, for the payment of his contribution to any fund constituted by the employer or a trade union registered under the Trade Unions Act, 1926 (16 of 1926) for the welfare of the employed persons or the members of their families, or both, and approved by 41a[appropriate Government] or any officer specified by it in this behalf, during the continuance of such approval;
(kkk) deductions made, with the written authorisation of the employed person, for payment of the fees payable by him for the membership of any trade union registered under the Trade Unions Act, 1926 (16 of 1926);]
42[(l) deductions for payment of insurance premia on Fidelity Guarantee Bonds;
(m) deductions for recovery of losses sustained by a rail¬way administration on account of acceptance by the employed person of counterfeit or base coins or mutilated or forged currency notes;
(n) deductions for recovery of losses sustained by a rail¬way administration on account of the failure of the employed person to invoice, to bill, to collect or to account for the appropriate charges due to that administration, whether in re¬spect of fares, freight, demurrage, wharfage and cranage or in respect of sale of food in catering establishments or in respect of sale of commodities in grain shops or otherwise;
(o) deductions for recovery of losses sustained by a rail¬way administration on account of any rebates or refunds incor¬rectly granted by the employed person where such loss is directly attributable to his neglect or default;]
43[(p) deductions, made with the written authorisation of the employed person, for contribution to the Prime Minister’s Nation¬al Relief Fund or to such other Fund as the Central Government may, by notification in the Official Gazette, specify; and]
44[(q) deductions for contributions to any insurance scheme framed by the Central Government for the benefit of its employees.]
45[(3) Notwithstanding anything contained in this Act, the total amount of deductions which may be made under sub-section (2) in any wage period from the wages of any employed person shall not exceed—
(i) in cases where such deductions are wholly or partly made for payments to co-operative societies under clause (j) of sub-section (2), seventy-five per cent of such wages, and
(ii) in any other case, fifty per cent of such wages:
Provided that where the total deductions authorised under sub-section (2) exceed seventy-five per cent or, as the case may be, fifty per cent of the wages, the excess may be recovered in such manner as may be prescribed.
(4) Nothing contained in this section shall be construed as precluding the employer from recovering from the wages of the employed person or otherwise any amount payable by such person under any law for the time being in force other than 45a[the Railways Act, 1989 (24 of 1989)].
31st May 2013 From India, Ahmadabad
I Agree with Mr Subba Rao's advise, the deduction need to be 1/3 of his salary (Net Salary), to enable him and his dependents to survive for the the month. Though he is giving in writing to deduct 80%, I am of the opinion that it is not appropriate.
Thanks & Regards
1st June 2013 From India, Hyderabad