Bill for cashless payment to workers

TT, New Delhi, Dec. 15: The government today introduced a bill to amend an 80-year-old law to enable employers to pay workers in certain sectors through bank accounts even without their authorisation for such cash-less payment.

The Payment of Wages Act, 1936, which regulates payment of salaries in factories, industrial units, railways and a host of other sectors, now says workers shall be paid in current coin or currency notes, or in both. Employers can pay by cheque or by crediting the salary to bank accounts after obtaining a worker's authorisation.

Labour minister Bandaru Dattatreya, who introduced the bill in the Lok Sabha, said technology has changed and a large section of employees had bank accounts.

Several sectors, including shoe factories, construction and textiles, have seen a significant reduction in activities since the demonetisation move left labour contractors short of cash. If the bill is passed, employers cannot deny workers their salaries, a ministry official said. The ministry has written to all state governments asking them to organise camps at work sites to facilitate opening of bank accounts.

Citu vice-president A.K. Padmanabhan said labour unions have been demanding such an amendment for several years. "The government is now doing this only to cover up its wrong decision of demonetisation."