Payment of Wages Act Overview
The Payment of Wages Act prescribes that wages (salary) shall be disbursed not more than once a month, with the dates generally not later than the 10th. However, some establishments have practices to disburse on various other dates as may be published in their Standing Orders. This is mainly due to the closing of their attendance in the middle of the month. Practically, some establishments with various branches located in far-flung areas face challenges in sharing attendance particulars on time. Consequently, the month's attendance may commence around the 20th and end on the 19th of the following month, resulting in salary payment for one full month not aligning with the calendar month but following this schedule. Thus, cut-off dates can vary, with some establishments paying on the 30th or 31st of the same month or the 1st of every month.
Typical Payment Dates as per the Payment of Wages Act
- Less than 1000 Employees: Every month by the 7th.
- More than 1000 Employees: Every month by the 10th.
For establishments to which the Shops & Commercial Establishments Act and other applicable acts pertain, similar guidelines apply, but the specific dates should be notified on the Notice Board and adhered to.
The essence of the issue is that wages should be paid at least once a month. Failure to comply results in default.