Imposing Of Fines To Employees

Our management decides to impose fines on employees for not following procedures, safety rules, not wearing helmets, not following 5S, etc. Is it applicable as per the act?

Why do traffic police impose penalties for not wearing helmets? Is it against the rules? The same applies if there is a violation, the penalty system is there. The amount of the fine has to be seen in the relevant Acts.

Pon

Any fine imposed needs to be in line with the requirements of the Payment of Wages Act. The act states that fines cannot exceed 3% of gross wages. The fines must be on the list of fines approved by the appropriate authority and must be listed or prominently displayed.

So, first, the list of fines must be approved by the labor officer. Then, they must be displayed. I don't think you will get approval from the labor officer for 5S. For safety violations, he will likely approve. I am not sure about procedures.

The company management can impose a fine on employees if they are not following the rules on the company premises. This ensures the safety of their employees. However, why would they impose a fine if they find you at a traffic signal without a helmet during office hours?

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Please read sections 5, 6, and 7 of the Payment of Wages Act. The company management does not have the right to impose a fine at its will. The list of fines needs to be approved by the authority under the act. Any fine not approved is an illegal deduction under the Payment of Wages Act. This rule applies irrespective of whether the deduction is from salary or whether it has been paid separately.