The Centre has decided to bring in an ordinance to amend the Payment of Wages Act to allow business and industrial establishments to pay salaries through the cheques or electronically. The source said, “the Union Cabinet today has approved the ordinance route to amend the Payment of Wages Act, 1936, to allow employers of certain industries to make payment through the electronic mode and cheques”.

Employers have also been given the option to pay wages in cash, according to the source.

As per practice, the government has introduced ordinance to amend laws for the immediate implementation of new rules. The validity of an ordinance is only six months. The government is required to get it passed in Parliament within that period.

The Payment of Wages (Amendment) Bill, 2016, has sought to amend Section 6 of the principal Act to enable employers to pay wages to the employees through cheques or by crediting it electronically to their bank accounts.

The Bill had been introduced by Labour Minister Bandaru Dattatreya amid din over the demonetisation issue.

It allows the state governments to specify industrial or other establishments that has adopted cashless way for salary payments.

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The new procedure serves the objective of “digital and less-cash economy”, according to the the Bill.

The Act covers all the employees in certain categories of establishments whose wage did not exceed Rs 18,000 per month.

By making state-level amendments to the Act, Andhra Pradesh, Uttarakhand, Punjab, Kerala and Haryana have already made provisions for payment of wages through cheque and electronic transfer.

At present, with the written authorisation of an employee, wages can be given through cheque or transferred to his or her bank account.

By Prakriti Neogi