Payment of Wages
The remuneration given to workers for work performed
by them is known as wages. Wages are of two types.
1. Nominal wage: This is the remuneration paid
to the worker in the form of money, but it does not include the value of any
other benefit that may be provided.
2. Real Wage: Labour is often entitled to
different benefits, such as leave, medical care, house rent allowance, bonus
etc. If the value of such benefits is added to the nominal wage, it is known as
real wage. Wages are paid to the labour based on two methods:
[1] Depending upon time
devoted to the work. This method is known as time rate system.
Time Rate system
In Time rate system of payment of wages, a suitable
rate of payment is fixed per unit of time devoted to work by the labour. The
unit of time can be hours, days, weeks or months. The rate of payment for
casual labour is fixed per day and that of regular employees per month in the
construction industry. The advantages of this system are:
[1] It is
simple and easily understood by labour. [2] The quality of work will be good.
[3] The workers do not get overstrained.
There are, however, the following disadvantages in the
system
[1] Constant supervision is required. [2] Effective
cost control cannot be ensured.
[2] Depending upon the
quantity of work performed. This method is known as piece rate system.
Piece Rate System
In this system payment is made on the basis of the
output of the workers. The work done by each labour is measured and payment is
made at the agreed rate. Thus a worker can make more money by increasing his
output. The rate of each item of work is fixed on the basis of the past record
of output. The piece rate system has the following advantages.
[1] The overall productivity is increased. [2] The
need of supervision is reduced. [3] Effective cost control can be ensured. [4]
The system is fair to the workers and employers. [5] The better workers with
higher outputs get higher payment.
However, the system has following disadvantages
[1] The system is unsuitable for works which can not
be
measured. [2] The quality of work is lowered. [3]
There are no guaranteed wages for workers.
What ever the system may be, there must be an adequate
compensation for the labour put in and this is known as “fair wages”.
Minimum Wages Act, 1948
The Minimum wages Act of 1948 was passed for the
welfare of labour and provided for fixing the minimum rate of wages of labour.
The Act aims at making provisions for the statutory fixation for the minimum
rate of wages in number of industries where there are extensive chances for the
exploitation of labour.
The main provisions of Minimum wages Act are:
[1] The setting of advisory committees to collect
information on the minimum wages are based.
[2] The wages of a worker in any scheduled employment
shall be paid on a working day by: (i) The 7th day after the last day of the
wage period if the establishment has less than 1,000 employees. (ii) The 10th
day after the last day of the wage period if establishment has more than 1,000
employees.
3. The wages of an employee should be paid without any
deductions except those items given below. (i) Fines in respect of acts of
omission. (ii) Absence from duty. (iii) Loss of goods directly attributed to
the neglect of the employee. (iv) House accommodation provided by the employer.
(v) Amenities and services provided by the employer. (vi) Income tax (vii)
Subscription to the provident fund. (viii) Recovery of advances. (ix)
Deductions ordered by the court. (x) Payments to co-operative societies / Life
Insurance
Corporation.
Workmen Compensation Act, 1923
The Workmen Compensation Act passed to protect the
victims of accidents and their families from hardships out of and in the course
of employment. The Act covers workers employed in hazardous occupations as
specified in the schedule but excludes those employed in clerical or
administrative work. The Act provides for payment of compensation in case of
accidents on work sites. The compensation, however, is not payable for injuries
due to (i) Disobedience or negligence, (ii) Non observance of safety measures
(iii) consumption of liquor (iv) diseases which are not contracted as a result
of the occupation. In the case of the death of a worker, compensation is paid
under all circumstances. Accidents are due to (i) Human causes such as poor eye
sight, negligence, effect of intoxicants, (ii) Mechanical causes such as
inadequate safety devices, live electrical equipment, unreliable scaffolding
etc. and (iii) Environmental causes. Such as poor lighting, heat, noise etc.
The result of an accident may be:
[1] Temporary disablement, which may be total or
partial. [2] Permanent total disablement. [3] Permanent partial disablement.
[4] Death.
The Compensation to be paid is depends on the result
of the accident. The Act provides for the appointment of Commissioner for the
quick disposal of claims for compensation. The employers are required to notify
fatal or serious accidents to the commissioner within seven days. Civil courts
are debarred from considering cases rising out of the Act and these are under
the jurisdiction of the commissioner.
Contract labour act, 1970
The contract labour Act, 1970 was passed to regulate
the employment of contract labour in certain establishments. It also provides
for improving the service conditions of contract labour. The Act is of
importance to the construction industry where works are executed through
contractors or by contract labour. The Act applies to every establishment and
contractor employing twenty or more workmen. The Act does not apply to
establishments in which only work of an intermittent or casual nature is
performed. The Act provides for the constitution of a Central Advisory Contract
Labour Board under the Central Government
and of state Advisory contract labour Board under each
State Government to advise the Central and State Governments on matters arising
out of the administration of the Act and to carry out the functions assigned to
it under the Act.
The main provisions of the Act are:
1) Registration of Establishments: Every principal
employer of an establishment to which the Act applies is required to make an
application to the registering officer on the prescribed form for the registration
of the establishment.
2) Licensing of Contractors: Every
contractor executing any work through contract labour is required to obtain a
license.
3) Welfare and Health of Contract Labour: Under the Act,
the following facilities are required to be provided for the welfare and health
of the contract labour:
(i) For works likely to continue for more than three
months, where labour is required to halt at night in connection with the
working of the establishment, the contractor should provide rest rooms.
Separate rooms should be provided for women.
(ii) For works likely to continue for more than six
months and employing more than 100 or more labour, an adequate canteen should
be provided.
(iii)Latrines and urinals must be maintained in clean
and sanitary conditions.
4) Payment of wages: Responsibility for the
payment of wages rests upon the contractor.