Section 54: Penalties for offences

Overview

Section 54 of the Code on Wages, 2019 deals with the punishments (penalties) employers face when they break the rules related to paying wages, bonuses, and other benefits to employees. It ensures employers are held accountable for violating workers’ rights regarding their earnings.

Scope and Coverage

• This section applies to all employees covered under the Code on Wages, 2019, regardless of their wage level. This includes workers employed in any factory, mine, workshop, or establishment.
• There are generally no thresholds or exclusions regarding the size of the establishment or the number of employees. The penalties apply to all covered employers.

Key Obligations and Rights

• Main duties of employers: Employers must comply with all provisions of the Code on Wages, including timely payment of wages, correct calculation of bonuses, and lawful deductions. They must maintain accurate records.
• Important rights or protections for employees: Employees have the right to receive wages and bonuses as per the Code, without unlawful deductions. They are protected from exploitation and have recourse to legal action if their rights are violated.

Compliance and Penalties

If an employer violates the Code on Wages, they can face penalties. This usually starts with an inspection by a Labour Inspector. If a violation is found, the employer may be required to pay a fine. More serious violations, like repeated offenses or intentional wrongdoing, can lead to imprisonment for the employer or responsible manager. The exact penalty (fine amount and imprisonment term) depends on the specific violation.

Practical Examples

• Example 1: A factory owner consistently delays paying monthly wages to their workers by more than 15 days. This is a violation, and the owner could be fined and, in repeated cases, face imprisonment.
• Example 2: An employer makes unauthorized deductions from an employee’s wages for damages to company property without following the legal procedure outlined in the Code. This is a violation, and the employer will be required to repay the deducted amount along with a penalty.