Now, pay cheques for labourers
Maharashtra First To Make Cheque Payment Mandatory; Move To Benefit 2 Crore Workers
M Padmakshan & Abhiram Ghadyalpatil, MUMBAI
All workers in Maharashtra—who come under the Minimum Wages Act and Payment of Wages Act—will now receive their wages only through cheques. In a move intended to stop the exploitation of the labor class by middlemen, the Maharashtra Assembly last week passed a bill mandating payment of wages only through cheques to all organized and unorganized workers. Both Houses of the state legislature passed an amendment to the Minimum Wages Act, 1948, and the Payment of Wages Act, 1936, to facilitate this change.
Maharashtra is the first state to make cheque payment mandatory. The move is estimated to benefit about two crore workers in the state. For now, the Act will be applicable to all those workers who are in continuous employment earning more than Rs 3,000 per month.
Workers are expected to gain from this move. Foremost among the gains is that they will be ensured continuity in employment provident fund (EPF) benefits, even after the laborer shifts from one job to another or one location to another. In many cases, mostly in the unorganized sectors, employers do not pay EPF at all, or it gets discontinued during the shifting of jobs.
Besides, it intends to put an end to the exploitation of workers by middlemen. Part of the wages of casual/contract workers are usually siphoned off by middlemen, though these workers have to sign records showing full receipt of wages. Making cheque payment mandatory is expected to lend transparency to the labor market in the state.
It is easy to make inflated labor bills if wages are paid in cash. The existing system helps generate black money. At the same time, paying wages in cash is also viewed as an easy route to fuse black money into the mainstream system.
“This is an all-out effort of the government to ensure fair wages, decent work, and financial inclusion for all laborers in the state. It's a landmark move for the labor force,” said Kavita Gupta, secretary, labor, government of Maharashtra. The state also plans to implement the provision by putting in place a labor management system in which bank accounts of all the laborers will be opened. The government has called for a tender for a total service provider who would be tying up with banks to facilitate opening “zero balance no frills” accounts. The laborers will be able to operate the account after biometric authentication.
The state in the assembly also said that after the successful implementation of this Act, those who have not been covered so far by the amendment, such as agricultural workers, sugar cane workers, and domestic workers, will also be brought under the purview of the Act. The state is planning to extend the benefit to workers not under continuous employment as well.
CUTTING THE MIDDLEMAN
In a move intended to stop the exploitation of the labor class by middlemen, the state assembly last week passed a bill mandating payment of wages only via cheques to all organized & unorganized workers.
For now, the Act will be applicable to all those workers who are in continuous employment, earning over Rs 3,000 per month.
The Act will ensure continuity in EPF benefits, even after the laborer shifts job or location.
Maharashtra First To Make Cheque Payment Mandatory; Move To Benefit 2 Crore Workers
M Padmakshan & Abhiram Ghadyalpatil, MUMBAI
All workers in Maharashtra—who come under the Minimum Wages Act and Payment of Wages Act—will now receive their wages only through cheques. In a move intended to stop the exploitation of the labor class by middlemen, the Maharashtra Assembly last week passed a bill mandating payment of wages only through cheques to all organized and unorganized workers. Both Houses of the state legislature passed an amendment to the Minimum Wages Act, 1948, and the Payment of Wages Act, 1936, to facilitate this change.
Maharashtra is the first state to make cheque payment mandatory. The move is estimated to benefit about two crore workers in the state. For now, the Act will be applicable to all those workers who are in continuous employment earning more than Rs 3,000 per month.
Workers are expected to gain from this move. Foremost among the gains is that they will be ensured continuity in employment provident fund (EPF) benefits, even after the laborer shifts from one job to another or one location to another. In many cases, mostly in the unorganized sectors, employers do not pay EPF at all, or it gets discontinued during the shifting of jobs.
Besides, it intends to put an end to the exploitation of workers by middlemen. Part of the wages of casual/contract workers are usually siphoned off by middlemen, though these workers have to sign records showing full receipt of wages. Making cheque payment mandatory is expected to lend transparency to the labor market in the state.
It is easy to make inflated labor bills if wages are paid in cash. The existing system helps generate black money. At the same time, paying wages in cash is also viewed as an easy route to fuse black money into the mainstream system.
“This is an all-out effort of the government to ensure fair wages, decent work, and financial inclusion for all laborers in the state. It's a landmark move for the labor force,” said Kavita Gupta, secretary, labor, government of Maharashtra. The state also plans to implement the provision by putting in place a labor management system in which bank accounts of all the laborers will be opened. The government has called for a tender for a total service provider who would be tying up with banks to facilitate opening “zero balance no frills” accounts. The laborers will be able to operate the account after biometric authentication.
The state in the assembly also said that after the successful implementation of this Act, those who have not been covered so far by the amendment, such as agricultural workers, sugar cane workers, and domestic workers, will also be brought under the purview of the Act. The state is planning to extend the benefit to workers not under continuous employment as well.
CUTTING THE MIDDLEMAN
In a move intended to stop the exploitation of the labor class by middlemen, the state assembly last week passed a bill mandating payment of wages only via cheques to all organized & unorganized workers.
For now, the Act will be applicable to all those workers who are in continuous employment, earning over Rs 3,000 per month.
The Act will ensure continuity in EPF benefits, even after the laborer shifts job or location.