Proposal to amend law for cashless wage payments
- Centre has proposed amending a law to empower States and allow industries to pay wages by cheque or by direct credit into bank accounts.
- Union Labour ministry has proposed changes to Section 6 of the Payment of Wages Act of 1936. The present law states that all payment of wages should be made in cash, with a provision enabling employers to obtain written permission of the worker to pay either by cheque, or by crediting the wages to his or her bank account.
- Proposal states that State governments may specify the industry through official notifications where the payment of wages shall be made through cheques or direct credit in bank accounts.
- One of the reasons for the ineffective enforcement of payments of wages to workers is the payment of wages in cash. So, the payment of wages only through cheque or through bank transfer in the bank account of employed persons will reduce the complaints regarding non-payment or less payment of minimum wages, besides serving objectives of digital and less cash economy.
- The move comes in the wake of the government’s efforts to promote cashless transactions after its currency recall move that led to the cash crunch.