Centre pushes employers to cashless payment of wage


In its attempt to move towards a cashless economy, the labour ministry Monday proposed to empower state governments to notify industries which can specify employers to pay wages through cheque or by directly crediting it to the worker’s bank account.

Demonetisation: At present, an employer is required to obtain a written authorisation from the employee to pay wages either through cheque or by crediting it into the employee’s bank account. The ministry has proposed to amend the Payment of Wage Act 1936 in order to make such payment legal. the Act covers all those employees in certain categories of establishments whose wage does not exceed Rs 18,000 per month.

The labour ministry has already sent an advisory to all state governments, labour department offices and concerned ministries asking them to ensure that payment of wages is done through banks only.

The labour ministry feels that payment in cash is the main reason why employees suffer from non-payment of wages. “With the passage of time, technology has gone a sea change. A large section of the employed persons have now bank accounts. So, 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 the objectives of digital and less cash economy,” the ministry said in the proposed amendments.

Sources in the ministry said the approval from cabinet will come by one week after which the act will be enforced.

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