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Route all wages via bank accounts: Govt. -Vikas Dhoot
-The Hindu

Industry has expressed concern over the directive

New Delhi: The Centre has asked all employers and contractors to ensure that wages are paid to all employees, including casual and contract workers, through cheques or electronic transfers into a bank account.

The Chief Labour Commissioner, under the Ministry of Labour and Employment, has also asked firms to get bank accounts opened for all those workers who do not have one already, and report on the compliance status with the details of the new bank accounts opened by December 2, 2016.

Stressing that it is not against the law to pay wages in cash, industry representatives expressed concern over the directive, which is to be implemented even for November salaries, and said this could lead to possible harassment of businesses by labour inspectors.

“For financial inclusion of workers, it has become necessary to ensure payment of wages to workers through a bank account. Accordingly, you are advised to take up with all major employers to get bank accounts opened in respect of each worker, if not already opened, especially in respect of contract and casual workers,” the Chief Labour Commissioner A.K. Nayak said in a missive to all field staff last Friday.

‘Top priority’

The Commissioner also urged officers to advise all principal employers and contractors to ensure payment of wages to all employees, including contract workers, only through bank account.

“This may be accorded top priority as payment has to be made for current month by end of this month or by first week of following month,” he stressed, calling for a report by December 2 on the number of bank accounts opened following this missive.

“This is a right step and it is more pertinent to accelerate this now, but large corporates already have such a system in place to credit monthly salaries electronically into bank accounts,” said Pradeep Bhargava, chairman of the National Committee on Industrial Relations in the Confederation of Indian Industry told The Hindu.

Mid-size and smaller firms, however, will face an issue, particularly with regard to contract and casual workers, whose dues are linked to the frequency of their employment during a month.

“If a beneficiary says he doesn’t have a bank account, we still have to pay wages due to them for their work in November. The government must recognise that it is not against the law to pay in cash and migrant workers who move from one project site to another, for instance, are not keen to open an account in one specific bank branch,” Mr. Bhargava said.

Not practical

Instead, the government could have allowed firms to execute this plan till the end of December, as it is not practical to expeditiously open bank accounts for casual and migrant workers, he said. Separately, industry has concerns about paying all wages by cheque, since they don’t usually pay any social security benefits like provident fund and gratuity to such casual workers.