Labour Law & Hr Consultant

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Dear Sirs, We had a discussion with Auditors about Wage Period - According to Payment of Wages Act 1936 as follows:
Section -
Responsibility for payment of wages.—
(1) Every employer shall be responsible for the pay ment of all wages required
to be paid under this Act to persons employed by him and in case of persons employed,—
(a) in factories, if a person has been named as the manager of the factory under clause (f) of sub-section (1) of section 7 of the Factories Act, 1948 (63 of 1948);
(b) in industrial or other establishments, if there is a person responsible to the employer for the supervision and control of the industrial or other establishment;
(c) upon railways (other than in factories), if the employer is the railway administration and the railway administration has nominated a person in this behalf for the local area concerned;
(d) in the case of contractor, a person designated by such contractor who is directly under his charge; and
(e) in any other case, a person designated by the employer as a person responsible for complying with the provisions of the Act; the person so named, the person responsible to the employer, the person so
nominated or the person so designated, as the case may be, shall be responsible for such payment.
(2) Notwithstanding anything contained in sub-section (1), it shall be the-responsibility of the employer to, make payment of all wages required to be made under this Act in case the contractor or the person designated by the employer fails to make such payment.]
4. Fixation of wage-periods. —
(1) Every person responsible for the payment of wages under section 3 shall
fix periods (in this Act referred to as wage-period) in respect of which such wages shall be payable.
(2) No wage-period shall exceed one month.
5. Time of payment of wages.—
(1) The wages of every person employed upon or in —
(a) any railway, factory or 1[industrial or other establishment] upon or in which less than one thousand persons are employed, shall be paid before the expiry of the seventh day,
(b) any other railway, factory or ‘[industrial or other establishment], shall be paid before the expiry of the tenth day, after the last day of the wage-period in respect of which the wages are payable:
[Provided that in the case of persons employed on a dock, wharf or jetty or in a mine, the balance of wages found due on completion of the final tonnage account of the ship or wagons loaded or unloaded, as the case may be, shall 1be paid before the expiry of the seventh day from the day of such completion.]
Practices in concern of Contract Labour to meet Statutory:
The contractors are closing the attendance of their labour from 21st of every month
The contractor has to submit their bills on 23rd of every month to Principle employer
Upon verification of bills, the payment will make 1st of every month to Contractor
The contractor will make payment to labour on or before 5th of every month.
Comments of Auditor is that contractor has to pay before 28th of the month, because 21st to 20th bill period is treated as Wage Period by them.
My argument is that for administrative and statutory concern we have fixed the attendance period or bill period as 21st to 20th of every month.
Officially or As per payment of wages act our wage period / payment will be on or before 7th of every month.
Dear Uma Sir and other eminent are requested to guide me, how to reply for him in statutory manner.
If it is violation, kindly guide to update it.

Dear Venkat,
The contention of your auditor is correct beyond any doubt.
As per the contract of employment, wages normally becomes payable by the employer only after the services are rendered by the employee.
The term "wage period" refers actually to the periodicity in which wages are normally paid as agreed in the contract of employment.
According to the PW Act,1936, no wage period shall exceed one month.
A month is considered to comprise of 30 days on average because of the differences in the no of days of the months in every calendar.
The ultimate "day" mentioned for payment u/s 5 of the Act should, therefore, be reckoned from the last day of the wage period i.e from the consecutive 30th day of the month whether "the month" is in sync with the calendar month or just a block of 30 consecutive days the employee is actually at the disposal of the employer. The days in between the 30th day and the actual day of the payment automatically constitutes "the grace period" facilitating the preparation of wage bills. Therefore, whatever time taken for administrative purpose both by the contractor and the Principal Employer should not exceed the grace period by presuming the 7th or 10th day of the succeeding month as the ultimate date of disbursement of wages under the PW Act,1936.

From India, Salem
Dear Sir,
Thanking you for your valuable advise. Well said sir and clearly understood.
As i have gone through section (4) of PoW, According to section (4) Fixation of Wage Period - is responsibility of PE by following of the clause 4(2) which shall not exceed 30 days.
Kindly sir What is the interpretation of this section.

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