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CS Professional · Labour Laws and Practice · Law of Wages

Ravi Textiles Pvt Ltd requires its machine operator, Meena, to pay Rs 500 in cash to the shift supervisor as a 'tea fund' contribution every month. Meena's wages are paid in full by bank transfer. Under the Code on Wages, 2019, how is this payment treated?

The payment is deemed a deduction from wages because an employee's payment to the employer or his agent counts as a deduction. Since a tea fund contribution is not among the purposes authorised in Section 18(2), it is not permitted, even though the bank transfer was for the full wages.

  1. AIt is deemed a deduction from her wages, and so is allowed only if it falls within the authorised purposes in Section 18(2)Correct
  2. BIt is not a deduction, because the wages were paid in full by bank transfer
  3. CIt is a permitted deduction because it is voluntary and small in amount
  4. DIt is a deduction that is lawful whenever the supervisor gives a receipt

Explanation

Under the Explanation to Section 18(1), any payment made by an employee to the employer or his agent is deemed to be a deduction from wages. The supervisor is the employer's agent. A tea fund contribution is not among the purposes listed in Section 18(2), so it is unauthorised. Full payment by bank transfer does not change this.

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