Section 15: Mode of payment of wages

Overview

This section of the Code on Wages, 2019, deals with how employers must pay wages to their employees. It outlines the acceptable methods of payment, ensuring employees receive their earnings in a secure and transparent manner. It’s about the mode of payment, not the amount of wage itself.

Scope and Coverage

• This section applies to all employees covered under the Code on Wages, 2019, regardless of their wage level or type of work. This includes workers in all establishments.
• There are no specific thresholds or exclusions regarding which employees this section applies to. It’s a universal requirement for all employers covered by the Code.

Key Obligations and Rights

• Employer’s Duty: Employers must pay wages using one of the following methods: coins, currency notes, cheque, direct credit to the employee’s bank account, or through electronic payment methods (like NEFT, RTGS, UPI, or similar).
• Employer’s Duty: Employers must provide a wage slip to every employee, detailing the components of their wages (basic pay, allowances, deductions, etc.). This ensures transparency.
• Employee’s Right: Employees have the right to receive their wages in one of the legally permitted modes.
• Employee’s Right: Employees have the right to a clear and detailed wage slip with every payment.

Compliance and Penalties

If an employer violates Section 15 (e.g., paying wages only in cash when other options are available, or failing to provide a wage slip), they can face penalties. These penalties may include fines and, in some cases, imprisonment. Government inspectors can conduct inspections to ensure compliance with this section. Repeated violations can lead to more severe consequences.

Practical Examples

• Example 1: A factory worker receives their monthly salary directly into their bank account via NEFT, and also receives a wage slip detailing their earnings and deductions. This is fully compliant with Section 15.
• Example 2: A domestic worker is paid entirely in cash without a wage slip. While cash payment is permitted, the lack of a wage slip is a violation of Section 15. The employer should provide a written record of the payment details.