President gives assent to Payment of Wages (Amendment) Ordinance, 2016

Posted on:30 Dec 2016 18:01:10

President gives assent to Payment of Wages (Amendment) Ordinance, 2016
30 December 2016 Current Affairs: President Pranab Mukherjee has given assent to Payment of Wages (Amendment) Ordinance, 2016, to enable industries to pay wages by cheque or credit into the bank accounts of workers. The ordinance amends the Payment of Wages Act, 1936 to encourage cashless transactions. With this assent the ordinance becomes law as per article 123 of the Constitution.

Allows industries to pay wages to workers earning up to Rs. 18,000 per month, without taking their explicit consent as required under present Act. Empowers the Union and State governments to specify industries or establishments where wage payments can be made mandatory through banks. However, it is not mandatory for employers to make wage payments through the banking system and they can still pay in cash.

The Union Government had decided to take the ordinance route because after demonetisation of the Rs. 500 and Rs. 1,000 banknotes in November 2016 had led to a cash crunch, and employers were finding it tough to pay workers in cash. The Payment of Wages (Amendment) Bill, 2016, introduced in Parliament was also not able get passed during winter session of the Parliament.


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