Is It Legal to Pay Salaries Only Through Bank Transfers for All Employees?

Please advise whether there is a provision in labor laws regarding payment of wages/salaries through bank transfer only in all cases, i.e. contractors and own staff.

Dear,

According to Section 6 of the Payment of Wages Act, 1936, all wages shall be paid in current coin or currency notes or in both, provided that the employer may, after obtaining the written authorization of the employed person, pay him the wages either by cheque or by crediting the wages to his bank account. This clearly shows that none of the payments other than the wages of an employee, and that too with the written authorization of the employee, can be transferred to the bank account.

Regards,

R.N.Khola
(Labour Law & Legal Consultants)
09810405361

Section 6 of the Payment of Wages Act, 1936, deals with the mode of payment. It states that all wages shall be paid in current coin, currency notes, or both (provided that the employer may, after obtaining the written authorization of the employed person, pay wages either by cheque or by crediting the wages into the bank account). Therefore, the method of payment will depend on your company's policy.

For more HR-related information, visit: [White Eagle](http://kuldeeprathore.blogspot.com/)

Payment of salary is traditionally by cheque only. Nowadays, even payments as low as Rs. 5,000 or so are being made by cheque. There is a government circular stating that any payment beyond Rs. 20,000 has to be made by cheque. Additionally, making payments by cheque saves a lot of hassles. However, the company can also make payments less than Rs. 20,000 by cash based on the company's policy.

Hey Rguph, I guess our experts have already answered the query, but to respond directly and bluntly, "No such provision." You can either pay cash or by check as per your convenience.

Regards,
Ukmitra

Dear HR Folks,

We pay salaries in cash or through the bank. There is no issue, but we would like to ensure that payment is made prior to the 7th of every month.

Regards,
P. Praveen

Dear,

According to me, firstly, you have to check whether you are paying salaries to your employees or laborers. If you are paying your employees, it can be either in cash or by check, and if you were paying laborers, it should be in cash according to the Payment of Wages Act. There is a difference between laborers and employees, so please always keep this in mind when giving wages to them. Please note that wages should be paid to laborers on a weekly, fortnightly, or monthly basis. The date of payment of wages is the 7th if the number of employees is less than 1000 and the 10th if the number of employees exceeds 1000.

Regards,

Kapil Dev Singh
SIEMENS LIMITED
Legal Compliances
Plot No 6A, Sector-18, Maruti Industrial Area,
Gurgaon - 122015 (HRY)
Direct Line: +91 (124) 2846590

Sir,

We pay the employees by bank transfer to their bank account. In these cases, do we need to take their signature on the salary register with revenue stamp?

Regards

We have outsourced a few works through a labor contract which states that wages must be paid through bank transfer or by check. However, the contractor is paying in cash and provides stamped/signed wage slips of the workers for reimbursement. We strongly feel that the wages are not paid in full, but we have not received any registered complaints from the workers either.

Payment of Wages Act Amendment

The amendment to the Payment of Wages Act states, "All wages shall be paid in current coin or currency notes or by check or by crediting the wages in the bank account of the employee." Does this also mean that wages can be made in "current coin or currency notes"? Please clarify.

Clarification on Government Notification

Can somebody explain the second portion of the amendment: "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 check or by crediting the wages in his bank account."