Lok Sabha passes Payment of Wages (Amendment) Bill, 2017

The Lok Sabha on 7 February passed the Payment of Wages (Amendment) Bill, 2017 which seeks to enable employers to pay wages to workers through cheque or directly crediting to their accounts. The bill, moved by Labour and Employment Minister Bandaru Dattatreya in the House, will replace the Ordinance promulgated by the President on 28th December last year. The Payment of Wages (Amendment) Bill is part of the National Democratic Alliance (NDA) government’s ongoing drive to create a less-cash economy.Under the Payment of Wages Act 1936, employers can use cheque or bank transfers to pay wages only with written authorization from the employee. Tuesday’s amendment bill, once it becomes an Act, will replace the old legislation and allow employers to pay in cash, cheque or credit the amount directly to a bank account, even without a worker’s approval. Over 90% of India’s 472 million-plus labour market is informal, meaning, workers are deprived of the benefits of formal employment like provident fund and health insurance.Many workers complain that employers pay them less than the minimum wages mandated by states. Since cashless payments have a trail in the banking system, employers will not be able to shortchange workers.The Bharatiya Mazdoor Sangh (BMS), an affiliate of the ruling Bharatiya Janata Party (BJP), criticized the move. “Political parties can receive Rs2,000 cash donation but the poor worker cannot. Besides, for withdrawing money, workers will have to spend productive work hours or pay service charge to banks. The central government, though it is saying it is not 100% mandatory, it may do so (implement cashless payments) for central sector workers first and then for others,” said Pawan Kumar, north central zonal secretary of BMS. Once the bill becomes law, it shall also repeal the Payment of Wages (Amendment) Ordinance 2016, which was promulgated on 28 December to effect cashless transactions as several industries like textiles and apparel said their production had taken a hit due to cash crunch in the country. The ordinance, and now the bill, follow the demonetization of Rs500 and Rs1,000 banknotes on 8 November.The Lok Sabha also took up for discussion the Specified Bank Notes (Cessation of Liabilities) Bill, 2017 that looks to cease the liability of the Reserve Bank of India on old banknotes of Rs500 and Rs1,000 denominations and specifies punishment for holding such banknotes.

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