What Penalties Can Employers Face for Delayed Payments and Unauthorized Deductions?

Penalty Under the Payment of Wages Act

What penalty can the labor authority impose under the Payment of Wages Act if an employer delays payment and makes unauthorized deductions?

Regards,
Paramjeet Singh

Payment of wages authorities can impose a penalty, which may be a maximum of 10 times the delayed wages or unauthorized deductions. Please refer to Section 15 of the Payment of Wages Act, 1936.

Regards,
Paramjeet

True, the Payment of Wages Act prescribes a penalty of 10 times. However, I have observed that in most cases, the respective High Courts have deemed the 10 times penalty as unjustified. Generally, the courts have justified a penalty of 3 or 5 times, depending on the circumstances.

Regards,
Kamal

How many days can we delay the wages of workers as well as the salary of the staff if some problems arise in the company?

Regards,
Ajay Sharma

Dear Malik ji, how are you? I hope you are keeping well. Just wanted to know whether a person who is in a senior post (D.G.M.) and whose company has not paid his full and final dues can file a case against the company under the Payment of Wages Act. Does he come under that? Kindly reply.

Regards,
Raj