Daily Wage Dilemma in Food Manufacturing: Is It Legal to Pay Employees Per Day?

Daily Wage Payment Inquiry in the Food Manufacturing Industry

Our company is in the food manufacturing industry. Can I pay salaries to my employees on a daily wage basis? We have a leave benefit, but employees are taking leave without intimation. Therefore, we plan to compensate regularly absent employees on a daily wage basis. This way, we can pay the amount when they are present. I am inquiring whether, under the Factories Act, there would be any problem with paying on a daily wage basis.

Regards,
Thejas Prasad
HR-Executive

Section 59/3 in The Factories Act, 1948

Where any workers in a factory are paid on a piece-rate basis, the time rate shall be deemed equivalent to the daily average of their full-time earnings for the days on which they actually worked on the same or identical job during the month immediately preceding the calendar month during which the overtime work was done. Such time rates shall be deemed the ordinary rates of wages of those workers.

Provided that in the case of a worker who has not worked in the immediately preceding calendar month on the same or identical job, the time rate shall be deemed equivalent to the daily average of the earnings of the worker for the days on which he actually worked in the week in which the overtime work was done.

Explanation: For the purposes of this subsection, in computing the earnings for the days on which the worker actually worked, such allowances, including the cash equivalent of the advantage accruing through the concessional sale to workers of food grains and other articles, as the worker is for the time being entitled to, shall be included. However, any bonus or wages for overtime work payable in relation to the period with reference to which the earnings are being computed shall be excluded.

Regards,

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