(1) (i) The wages of a worker in any scheduled employment shall be paid on a working day,--
(a) in the case of establishments in which less than one thousand persons are employed, before the expiry of the seventh day, and
(b) in the case of other establishments before the expiry of the tenth day after the last day of the wage period in respect of which the wages are payable.
(ii) Where the employment of any person is terminated by or on behalf of the employer, the wages earned by him shall be paid before the expiry of the second working day after the day on which his employment is terminated.
(ii) The wages of an employed person shall be paid to him without deduction of any kind except those authorised by or under these rules.
Explanation.- Every payment made by the employed person to the employer or his agent shall, for the purposes of these rules, be deemed to be a deduction from wages.
(2) Deductions from the wages of a person employed in a scheduled employment shall be of one or more of the following kinds, namely:-
(i) fines in respect of such acts and omissions on the part of employed persons as may be specified by the Central Government by general or special order in this behalf;
(ii) deductions for absence from duty;
(iii) deductions for damage to or loss of goods expressly entrusted to the employed person for custody, or for loss of money for which he is required to account, where such damage or loss is directly attributable to his neglect or default;
(iv) deductions for house accommodation supplied by the employer;
(v) deductions for such amenities and services supplied by the employer as the Central Government may, by general or special order, authorise;
Explanation.- The words 'amenities and services' in this clause does not include the supply of tools and protectives required for the purposes of employment;
(vi) deductions for recovery of advances or for adjustment of over payments of wages:
Provided that such advances do not exceed an amount equal to wages for two calendar months of the employed person and, in no case, shall the monthly instalment of deduction exceed one-fourth of the wages earned in that month:
(vii) deductions of income-tax payable by the employed person;
(viii) deductions required to be made by order of a court or other competent authority;
(ix) deductions for subscriptions to, and for repayment of advances from any provident fund to which the Provident Fund Act, 1952 (19 of 1952), applies or any recognised provident fund as defined in section 58-A of the Indian Income-tax Act,(11 of 1922), or any provident fund approved in this behalf by the Central Government during the continuance of such approval;
(x) deductions for payment to cooperative societies or deductions for recovery of loans advanced by an employer from out of a fund maintained for the purpose by the employer and approved in this behalf by the Central Government or deductions made with the written authorization of the person employed ,for payment of any premium on his life insurance policy to the Life Insurance Corporation of India established under the Life Insurance Act,1956 (31 of 1956);
(xi) deductions for recovery or adjustment of amounts, other than wages paid to the employed person in error in excess of what is due to him;
(xii) deductions made with the written authorisation of the employed persons (which may be given once generally and not necessarily every time a deduction is made), for the purchase of securities of the government of India or of any State Government or for being deposited in any Post Office Savings Bank in furtherance of any savings scheme of any such Government;
(xiii) deductions made with the written authorisation of the employed person for contributions to the National Defence Fund or the Prime Minister's National Relief Fund or to any Defence Savings Scheme approved by the Central Government or to such other Fund as the Central Government may, by notification in the Official Gazette, specify in this behalf; and
(xiv) deductions for recovery of loans granted for house building or other purposes approved by the Central Government, and for the interest due in respect of such loans, subject to any rules made or approved by the Central Government regulating the extent to which such loans may be granted and the rate of interest payable thereon:
Provided that prior approval of the Inspector or any other officer authorised by the Central Government in this behalf is obtained in writing before making the deductions, unless the employee gives his consent in writing to such deductions.
(2-A) Notwithstanding anything contained in these rules, the total amount of deductions which may be made under sub-rule (2) in any wage period, from the wages of an employee shall not exceed-
(i) 75 per cent of such wages in cases where such deductions are wholly or partly made for payments to Consumer Cooperative Stores run by any Cooperative Society under clause (x) of sub-rule (2); and
(ii) 50 per cent of such wages in any other case:
Provided that where the total amount of deductions which have to be made under sub-rule (2) in any wage period from the wages of any employee exceeds the limit specified in clause (I), or, as the case may be, clause (ii) of this sub-rule, the excess shall be carried forward and recovered from the wages of succeeding wage period or wages periods as the case may be, in such number of instalments as may be necessary.
(3) Any person desiring to impose a fine on an employed person or to make a deduction for damage or loss caused by him shall explain to him personally and also in writing the act or omission or the damage or loss, in respect of which the fine or deduction is proposed to be imposed or made and give him an opportunity to offer any explanation in the presence of another person. The amount of the said fine or deduction shall also be intimated to him.
(4) The amount of fine or deduction for damage or loss mentioned in sub-rule (3) shall be subject to such limits as may be specified in this behalf by the Central Government. All such fines imposed and deductions made shall be recorded in the registers maintained in Forms I and II, respectively. These registers shall be kept at the workspot and maintained uptodate. Where no fine or deduction has been imposed or made on or from any employee in a wage period, a 'nil' entry shall be made across the body of the relevant register at the end of the wage period, indicating also in precise terms the wage period to which the 'nil' entry relates.
(4-A) Every employer shall send annually a return in Form III so as to reach the Inspector not later than the 1st February following the end of the year to which it relates.
(5) The amount of fine imposed under sub-rule (3) shall be utilised only for such purposes beneficial to the employees as are approved by the Central Government.
(6) Nothing in this rule shall be deemed to affect the provisions of the Payment of Wages Act, 1936 (4 of 1936).
Absence/Absenteeism
Advance Wages
Deduction/Fine From Wages
Employee Leaving The Company
Payment of Wages
Spread Over
Wage Periods
Form I - Rule 21(4) : Register of Fines
Form II - Rule 21(4): Register of deduction for damage or loss caused to the employer
Form III - Rule 21(4-A) : Annual Returrn of Deduction from Wages
