Workmen Payment of wages in bank account is mandatory in CLA or BOCW Act

Hello Friends,

Can anyone clarify the doubts regarding monthly wages payment to workmen? Is it mandatory to pay through a bank account only under any Act of Labour Law? Is it applicable in the Central Sphere at present or under any state government act? If yes, please provide supporting documents to show where it has been specified.

Also, can you clarify if under the Central Sphere, there is any specific provision for a height allowance, i.e., 20% extra pay for workers working at a height greater than 30 feet?

Your valuable advice and support are appreciated.

Regards,
Mahesh Gupta

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Dear Manish,

Sec 6 of the Payment of Wages Act has been amended by the central government during the Demonetisation period to make it mandatory for the salary to be paid only by bank transfers or crossed cheques where the same is notified by the relevant state government.

The Maharashtra government had already amended Sec 6 in 2013 to make it compulsory to pay wages only by bank transfer or crossed cheques. For other states, you need to find the relevant notification. I think most states have issued the notifications. In any case, for better control and safety, paying by bank transfer is better so no one can accuse you of short payment or non-payment or fraudulent records.

Monthly wages payment to workmen is not mandatory to pay through a bank account. The Payment of Wages Act directs to pay in cash or through the bank according to the choice of workmen. However, to pay by bank is easy but not possible for all, especially in areas where banks are located far away, such as project areas under B&OCW in remote regions.

Prabhat-ji

Sec 6 was amended in 2017 as below:

"6. All wages shall be paid in current coin or currency notes or by cheque or by crediting the wages in the bank account of the employee: Provided that the appropriate Government may, by notification in the Official Gazette, specify the industrial or other establishment, the employer of which shall pay to every person employed in such industrial or other establishment, the wages only by cheque or by crediting the wages in his bank account.".

Details of the amendment are at https://labour.gov.in/sites/default/...WAct2017_0.pdf

After the amendment, where notified (and most states notified it), payment through a bank account is mandatory.

The amendment of 2017 only removes the requirement of obtaining written authorization for payment of wages by cheque or through a bank account but does not make it mandatory to pay in the bank.

Thank you.